Courtesy of Improving new account opening, this demo of ATM functionality. Now this is a good use of flash, and the way the demo is done where you actually click the buttons as if you were at the ATM is brilliant. Link to NatWest – Mobile Phone Top-up Demonstration tags: flash+demo Continue reading NatWest – Mobile Phone Top-up Demonstration at the ATM
Dave summarises well the latest thinking on identity and disclosure issues that Internet has made imperative. This opening paragraph summarises the problem. Your kids want to go in a chatroom and you will only let them go into the chatroom if you know (in principle) who everyone else in the chatroom is, but you won’t let them go into the chatroom if they have to disclose who they are. So in an “open space”, you want to everyone else to disclose their identity but keep yours secret, just in case of one the other people who has disclosed their identity … Continue reading Digital Identity: The chat room paradox
This is a great high level summary of why banks make money. The metaphor of a moat is used to describe how Banks can control their marketspace, and exclude interlopers. The question becomes, whether the moat can be crossed, or avoided. … nearly all banks have a sustainable competitive advantage–an economic moat. Warren Buffet and Charlie Munger were surprised, too. Buffett once remarked, “Charlie and I have been surprised at how much profitability banks have, given that it seems like a commodity business. To review some fundamentals, an economic moat represents a company’s ability to earn returns above its cost … Continue reading Do Banks have a sustainable business model?
Forrester continue to ask the obvious yet absolutely right questions, yet the answer here is confusing. Although the branch was once thought to be dead in favor of alternative channels, the majority of consumers still prefer the branch for doing most of their banking business. A Forrester survey shows that these consumers are generally older, less wealthy, and don’t trust online banking. Source: Forrester Research: Who Are The Bank Branch Loyalists? This survey took a look at what turns out to be a significant consumer group. … took a closer look at the 58% of consumers who say they prefer … Continue reading Forrester Research: Who Are The Bank Branch Loyalists?
Rubel picks up on the social network moves from Banks, and adds one I didn’t have in my list. I suspect once we dig into it, there will be more Banks is MySpace, Facebook, and the likes. Those are of moderate interest for me, and really an extension of banner ad marketing. It remains to be seen whether that’s the model vs build your own social network, a combination of both, or more likely something we haven’t seen yet. Chase Credit Cards has a promotion running with Facebook (login required) Source: Micro Persuasion: Banks Jump to Social Nets to Reach … Continue reading Micro Persuasion: Banks Jump to Social Nets to Reach Gen Y
The Canadian online brokerage industry lives under the shadow of the Globe and Mail rankings, to a far greater extent than the Banks worried about the old Gomez online banking surveys. I believe those surveys, while useful indicators, can result in dysfunctional investment, and all the while the customer is lost. Consider the facts: Globe & Mail Market Share Qtrade TD ETrade RBC Credential BMO InvestorLine The surveys are useful indicators, but they drive Banks and Brokers into a functionality race, so customer and community engagement is lost. ” No. 1 / Qtrade Investor / … Continue reading Canadian Banks & Insurance: Canadian online brokers ranking belies their success
First time I have heard of a Bank deploying wireless for core transactional stuff, but its admirable, and smart. More flexibility in the future branch deployments will be one result. Mumbai, India-based Yes Bank Ltd. has deployed a secure wireless network at its retail branches for customers and employees. Branch employees will be able to conduct wireless transactions via the Intel-backed network. The network boasts a three-tiered data security shell that includes authentication, encryption, and data integrity checks. Source: BankNet 360 – Yes Bank Goes Wireless tags: wireless Continue reading BankNet 360 – Yes Bank Goes Wireless
BofS has always been a leader in IT. This was the case when I began my career there. The London-based bank is increasingly relying on data marts — smaller data warehouses that focus on a particular department — to enable its divisions to run reports against specified datasets on a self-service basis, rather than relying on technical staff. In most cases, reporting is carried out automatically using business intelligence software. Source: BankNet 360 – Bank of Scotland Overhauls IT Database experts are always talking about the importance of datamarts, and I expect this is an important strategy for BofS that we … Continue reading BankNet 360 – Bank of Scotland Overhauls IT
Tara continues to explore new marketing, and the principles that underpin it. Stop all outgoing messages. Concentrate on ways to listen better. Open up the channels to incoming. You can’t listen if you are yelling. Be a community evangelist. It’s not about ‘creating customer evangelists’, it’s about advocating for your community. This is why it is important to have at least one person in-house that is focused on listening to the community. Even better is if everyone in-house is doing this. When developers and CEO’s get busy, it is increasingly more important to listen to the community advocate. Drop the … Continue reading ::HorsePigCow:: marketing uncommon: BayCHI Presentation – Notes
Internet only banks are making a comeback, for the first time since the late 90’s.
BY SUSAN HARRIGAN Newsday Staff Writer Just as new bank branches seem to be popping up on every street corner in metropolitan New York, a countertrend is gathering strength. Internet-only banks, which first made their debut in the 1990s but fizzled for lack of consumer interest, are making a comeback.
The number of U.S. households with an account at a Web-only bank — defined as one that primarily delivers its products online — has grown more than tenfold during the past six years, from 350,000 to about 4 million, according to Jim Bruene, publisher of the newsletter Online Banking Report. Such “virtual” banks, which don’t rely on physical offices, now are operated by about 40 financial services companies and hold about $80 billion in deposits, or 1.3 percent of total U.S. deposits, he says.
Source: A worldwide web of online banks – Newsday.com
First key and obvious point is the lower cost base of Internet banks.
Because they cost less to operate, online banks can offer higher interest rates than their brick-and-mortar counterparts, making them an ideal tool to gather deposits through savings and money market accounts. “Really, the success [of the Web-only banks] is in attracting people who have high balances in savings or checking accounts, and want to move them for higher rates,” Bruene said.
The other distinctive aspect of the new breed, is niche focus, both on customers, and with specific products.
Flushing Financial will use its Web operation to gather deposits at first, but in the future it plans to offer other types of online-only products, such as checking accounts and home-equity loans.
…
Westbury-based New York Community Bancorp, which has 166 branches, including 69 on Long Island, opened a Web-only operation early last year under the name MyBanking Direct.com. The unit offers a certificate of deposit and a money market account.
These moves are alerting experts to predict a significant reduction in reliance on branches is coming.
Although online-banks’ share of the U.S. deposit-taking business still is tiny, their growing popularity is causing some experts to predict that the craze for building bank branches is about to end. Over the past 20 years, consolidation has cut the number of banks in the United States from about 18,000 to 9,000, but branches have doubled from 35,000 to about 70,000, according to Mark Fitzgibbon, a banking analyst for Sandler O’Neill & Partners.
The debate about branches or internet, has been binary. The real story, is more of an evolution, that was well captured in a recent paper from onlinebankingreport.com authored by Bruene.
Bruene, who recently authored a report titled “The Demise of the Branch,” said he expects to see the number of bank branches in the United States decline by 20 to 30 percent over the next two decades. In contrast to the late ’90s, when fewer consumers were comfortable using the Web, “everybody’s online” now, he said. “It opens up a new way to reach people cost-effectively that you couldn’t have five or 10 years ago.”
Bankers have long memories, and at the first mention of internet banking, still too easily recall the demise of the early movers, mbanx, Wingspan, and Citi.
During the Internet bubble of the 1990s, banks including Citibank and Chicago-based Bank One, now a part of JPMorgan Chase, introduced Web-only units but ended up folding them when they didn’t attract enough customers. George Tubin, a senior analyst at TowerGroup Inc., a Needham, Mass.-based consulting firm, said the effort was, simply, too early.
The catalyst that actually began in the 90’s but survived, is ING. Their model was classic by todays standards. Focus on the online only, and only deliver those products that can be effectively delivered that way. They were also innovative enough (in Candia) to work on the fringes of the then current regulations, and by accepting the signature on the account funding cheque from the competition, successfully outflanked the regulations that the old banks diligently adhered to.
ING Direct, a unit of Netherlands-based ING Groep that began operating in the United States in 2000, was the catalyst for a revival of stand-alone Internet banking in this country. Operating only four retail locations that it calls “cafés” and uses solely for marketing purposes, ING offers savings accounts and mortgages, and also plans to offer a checking account later this year. At year-end 2005, it had $40 billion in U.S. deposits, according to the Online Banking Report, making it the nation’s largest stand-alone Web bank.
Relevance to Bankwatch:
The opportunity for traditional banks is hindered by concerns about cannibalism of balances. However better to cannibalize yourself than have the competition do it.
tags: internet+banks, ING
Continue reading “A worldwide web of online banks – Newsday.com”
