Below is an image of an ad that was run in the Business Review of Charleston’s Post & Courier.  The links to SC Federal’s blog, Twitter and Facebook pages are listed at the bottom.  You’ll notice that they also us QR codes (which didn’t work for me).

Incidentally, other companies listed QR codes in their ads but no one else listed their social media sites.

Here are some statistics from comScore’s quarterly report:

• 97.9 million people in the U.S. owned a smartphone (40% of all mobile subscribers)
• 74.3% used text messaging
• 47.6% downloaded apps
• 47.5% used the mobile browser

So how does this help you with picking your mobile strategy? This should give you a starting point. Instead of having heated arguments about whether you should have an iPhone app, Android app, or use HTML 5, find out how YOUR customers use their mobile phones.

Years ago when I led a mobile banking project, the first thing I did was create and send a survey to our customers. Once I had the results, I then formed a list of vendors that lined up well with how our customers were using their phones.

How do you know which mobile banking strategy to pick if you don’t even know anything about your customers’ mobile usage? It’s pretty pointless to develop an iPhone app with RDC capabilities when the majority of your customers only use text messaging and don’t have smart phones.

So to help you get started, here is a list of some questions you should ask:

Do you own a smart phone?

If so, which kind operating system does it use?
a. iOS (iPhone)
b. Android (Google)
c. BlackBerry
d. Windows Mobile
e. Other

How often do you use text messaging?
a. Never
b. 1-5 times a month
c. 1-5 times a week
d. every day

Do you browse the internet on your phone?

Do you listen to music on your phone?

Have you downloaded an app for your phone?

Do you play games on your phone?

Do you use social networking on your phone? (Twitter, Facebook, Google+, Pinterest, Foursquare, Gowalla)

Have you ever used your phone to find directions?

Have you ever purchased an item through your phone? (movie ticket, book, music, etc.)

Have you accessed our website on your phone?

Have you accessed online banking on your phone?

If we offered mobile banking, which features would you be interested in?
a. SMS/text alerts (daily balance, deposits, withdrawals)
b. Web mobile banking
c. Mobile banking app
d. Remote Deposit Capture
e. ATM locations
f. mobile payments
g. Person-to-person transfers

Once you’ve compiled the responses from this survey, you’ll be well on your way to setting a successful mobile strategy. So go on and get started.

Looking for a mobile banking vendor? Well check out FS Vendors to start your search.

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One thing that I took away from the article was free checking isn’t really free. It’s only free if you follow certain conditions. Now in my mind, I picture free as something similar to those free samples at Sam’s Club. With no purchase necessary, I can get a free sample of what ever was prepared that day. If I work it right, I could basically end up with a free lunch.

Free at a bank or credit union usually means:

• The account must be opened with a minimum amount (this minimum amount does not have to be maintained)
• You may have to sign up for certain services such as direct deposit and/or e-statements
• You can only use certain ATMs without being charged
• You have to pay a fee for an overdraft, even if they pull the money from a linked savings account
• You have to pay for new orders of checks, after your free first box
• You have to pay a stop check fee, even if you submit the request online
• You may have to make a certain number of online bill payments
• You may have to use your debit card a certain number of times

Basically, it’s free as long as you do the things they tell you to do.

The flip side of this is all the pay-day lenders and check cashing services that charge an assortment of fees. Their 3 R’s keep holding steady or going up (ROI, ROE, ROA). On the other hand, some banks and credit unions feel like poppin’ champagne when they have a profitable quarter.

For the life of me, I can’t figure out why so many people are so against banks and credit unions charging for their services. You’ll notice I said charge for services, not charge fees. FIs are in the business of making money and regardless of how you feel, checking accounts are not razors with the other services being the razor blades.

I can’t use a razor without a razor blade, but I can have a checking account and no other service at a FI. Ron Shevlin’s report on the Debanked should be a fine example of people choosing to live on what is essentially a checking service. If FIs bothered to do some serious data-mining, they may be shocked at just how many customers have only a single checking account.

In some cases, the customers may have two checking accounts, with one being obtained only because of a promotion or the sales tactics of the frontline. I’m willing to bet that the second account has less than the minimum opening amount.

It’s time that banks and credit unions sit down and do some serious account analysis. They need to dig into their customer data and figure out just what are their ideal, profitable customers. The days of only looking at generated fee income as a profitable customer are over. You can’t wait for Bank of America to save you with their new fee implementations. In fact, it was probably following BofA that played a part of getting the industry into this mess to begin with.

Don’t think so? How much do you charge for online banking, mobile banking, bill pay or e-statements? If you don’t charge anything, it’s probably because BofA set the precedent of giving these services away for free. Interested in following their lead of branch closings and layoffs?

You’re right, most of you do use all of these tools. But how many technology companies are your customers?

Hmmm, was that a scratching record and crickets that I heard in the background?

I was reading a post on OnStartups the other day and saw an interesting statement:

Best Bank for Working with Startups:

Silicon Valley Bank

In case you haven’t heard of them, Silicon Valley Bank has more than $19 billion in assets and pretty much caters to the startup community. Here are some interesting stats:

• 50% of all VC-backed companies in the US bank with Silicon Valley Bank
• 2/3 of all VC firms bank with Silicon Valley Bank
• 70% of Businessweek’s Top Entrepreneurs are Silicon Valley Bank clients (May 2011)
• 68% of WSJ Top VC-Backed companies are Silicon Valley Bank clients (March 2011)
• Only global bank dedicated to the innovation sector

Silicon Valley Bank has branches in the startup hotbeds of the US and globally. The way that Charleston, SC is growing, I wouldn’t be surprised to see a branch here soon.

Now correct me if I wrong, but right now technology is considered a growth industry. In fact, over the last couple of years, you hear a lot more about startups in general. Is your community bank or credit union pursuing these new prospects? I promise you that your big competitors, such as Bank of America, Wells Fargo, TD Bank, Citi and JP Morgan, are.

One thing I’ve heard over and over from entrepreneurs is they try going to a community bank or credit union first, but are turned down. The larger bank however, accepts their business and works with them. Because that larger bank helped them get started, entrepreneurs feel a fierce loyalty to them.

This is an instance where “all our decisions are made locally” comes back to kick you in the proverbial tail. Your chance of getting any future business with this company, when they are successful later, is pretty low. Your only hope is that the big bank will do something, such as lower a credit limit when they need it, that will cause extreme dissatisfaction.

The sad part is I see this happen so many times here in Charleston. The Charleston area has been in the news lately for being entrepreneur friendly. Here are a few awards the area has received recently:

• #11 Milken Institute’s “Best-Performing Cities 2011”
• #1 nationally as the top tourist destination in America, Conde Nast 2011
• #1 2011 Metro Areas with the Largest Percentage Growth in College Degrees over 10 Years, Brookings Institute Study, Wall Street Journal
• #8 2011 Best Cities for Job Growth – Mid-Sized Cities, New Geography
• #3 2011 Small Business Vitality Scores, The Business Journals
• #4 2010 Small Business Vitality Scores, Portfolio
• #7 2009 Best Cities for Technology Jobs, Forbes
• 2009 Best Place for Start-Ups, Mount Pleasant cited as best city in South Carolina, Business Week

Even with all of that, I don’t know of a single community bank or credit union in the area that actively pursues the startup community. In the past I’ve worked with BarCamp Charleston and contacted local FI’s about sponsoring the event. In the three years of BarCamp Charleston being held, no bank or credit union has ever been a sponsor.

This is a huge opportunity that is being missed. It’s sad to say, but it almost seems that because BarCamp is organized by a bunch of enthusiasts, it’s not deemed a “worthy event”. I noticed that plenty of FI’s send representatives to local chamber events. If they only knew how many successful business owners attended BarCamp.

Now, in your community I’m sure there are plenty of businesses that would love to bank with someone local. My advice is to get them while they’re still in a growth stage and can really use your financial expertise. Take the time to meet with them and learn their business. Because when they become that million dollar company and big bank comes-a-calling for their business, they’ll remember you took a chance on them when they needed it. Besides, Silicon Valley Bank will be more than happy to take them off your hands.

Over the past couple of years I’ve heard more and more about bank and credit union customers wanting their FI to provide more financial advice. A recent post by Jeff Marsico brought this issue up again. In his post, Jeff described his latest insurance shopping experience. In the end, he ended up dropping his agent because he was able to find a 20% cheaper rate on his own. Rightfully so, he felt his agent should have been a bit more proactive and had his best interest in mind.

This prompted him to wonder about customer service levels at financial institutions. He also mentioned that a competitor did a survey of FI customers and concluded that “both businesses and individuals wanted advice from their FI.” My question is, “exactly what advice do customers want?”

Let’s be honest, most people really aren’t overly concerned about their finances. What I mean is, they aren’t actively making and following budgets, tracking their expenses and updating their asset allocations. I’m sure quite a few resolutions were made this year about getting finances in order. But I don’t think FIs are asking the right questions.

For all those polls that say customers want financial advice, I don’t see any that mention what type of advice customers actually want. From what I can gather through online searching, banking advice seems to consist of:

1. How to save money, in general
2. How to save money for specific goals (house, car, education, vacations)
3. Using direct deposit
4. Using budgeting tools
5. Avoiding fees
6. Finding the right checking or savings account
7. Finding a good loan/credit card rate

Now I know that most bankers and credit union employees will happily discuss any of those topics with their customers. But are customers meeting with their bank or credit union to go over these topics? Given the low branch traffic, I’m confident in saying “no”.

However, this brings up another question. How do said customers want to receive this financial advice? Generally, most people tend to meet face-to-face with the person they want advice from. I know PFM can be used to offer goal management, products and services that customers may be interested in, but that’s not really “advice”. Is online a better channel? What about workshops or lunch-n-learns?

If financial institutions really want to go down the road of proactively offering advice, they first need to find out what their customers want. Instead of tweeting generic advice, send out some direct mail and surveys to get their opinion. In this environment, getting to know your customer better can only be a good thing.

Photo by Oberazzi

Interested in PFM? Check out these companies and products:

PFM on Kwikstarter

I know I don’t miss the endless email replies with co-workers. Using enterprise social networks such as Yammer, Socialcast, or Sharepoint can have a very positive effect on internal collaboration. Using a “Facebook” or “Twitter” style of communication can allow you to get answers faster by being shared across the organization.

Company executives have been looking for ways to increase communication in their organization. I believe these tools will fill that need nicely.

Socialcast Kwikstarter Profile
Yammer Kwikstarter Profile