The Banktastic All-Star Feed

This is why we can't have nice things. [Open Source CU - Home]

hi@itsjustbrent.com — Fri Sep 12 18:18:00 UTC 2008

First, a disclaimer: The folks at Currency Marketing are my friends, and so is Trey from TDECU, so my opinion is not objective. But still…this is just ridiculous.

For those who haven’t heard, a month ago Resource One Credit Union, located in my town of Dallas, TX, launched a cartoonishly blatant ripoff of Currency’s Young & Free Program , called MyLifeMyMoney. Pilcher covered it well at The Financial Brand.

I’ve been quietly rolling my eyes, but yesterday represented the last straw when they posted their call-to-action video, “K.I.S.S.“

As Pilcher pointed out last month:

MyLifeMyMoney copies essentially every component of Young & Free, including the overall strategy, the spokester�€™s responsibilities, the media used, and the incentives offered to the spokester.

Even the title “Spokester” is a word made up by Y&F Alberta’s Larissa.

So when I watched the latest video, and saw that R1 had even tried to (poorly) hijack the style of Larissa’s “The Difference Between Credit Unions and Banks” series, I was so bewildered all I could do was shake my head and cuss a little.

Let’s be clear: The hands-on-paper styling of the “Difference” videos were not original to Larissa, who borrowed it from Common Craft. However, she owned it, used it to deliver a message in a unique way to a new audience and used that style to create something original within the same style. She also gives credit to Common Craft as her muse.

A friend compared this to the film Multiplicity, where Michael Keaton copies himself and each copy is a little closer to eating glue.

There’s a difference between influence, homage, and a slipshod ripoff.

And again: It’s not like Currency invented calling for corporate auditions, Donald Trump and his pet hairpiece had been doing it for seasons. But they took a good idea and created something new.

I’ve created a slightly modified edit of R1’s K.I.S.S. video:

Collaboration is great. Influence is fantastic. Be inspired by great work. Borrow away. We can pull a lot of morals from this story, I’ll go with the least common denominator:

“If you’re going to steal, try not to do a pisspoor job of it.”

GonzoBaker of the Month: Frank Trotter, EverBank Direct [Gonzobanker]

Fri Sep 12 04:00:00 -0400 2008

For September, we laud Frank Trotter, President of EverBank Direct, for a devotion to sensible banking practices that has helped EverBank slide unscathed and with growth to boot past the credit crisis.

Expensify Launches Decoupled Credit/Debit Card Using Prepaid Model [NetBanker]

Jim Bruene http://www.netbanker.com — Fri Sep 12 01:59:32 UTC 2008

Like Rate Surfer, which we wrote about yesterday, Expensify launched its new employee-expense management system from the TechCrunch50 DemoPit this week.

The San Francisco-based startup (note 1) combines a payment card with a web-based expense manager and uses cellphone cameras to upload pictures of receipts to match against purchases. It's a banking triple play: card, online, and mobile.

The target market is smaller businesses that want to automate expense report preparation, approval, and reimbursement to their employees.

How it works
The heart of Expensify is a prepaid decoupled credit card. I know that doesn't makes sense, here's how it works:

Sign up for an Expensify MasterCard prepaid debit card.
Load it with value from any credit or debit card, Visa, MasterCard, or American Express.
Make purchases with the Expensify MasterCard.
As each purchase clears, it lowers the prepaid balance, triggering an automatic "top off" charge of an equal amount to the consumer's credit card thereby returning the prepaid balance back to the original level.

Metabank is the issuer, here's the terms and conditions.

Analysis
At first blush Expensify sounds pretty amazing. An expense management card that rides on top of your regular card, with mobile and web-based integration. Brilliant, until you start thinking about costs. There's that pesky thing called interchange. What Expensify has done is create two card transactions instead of one, doubling the amount of interchange paid.

To cover the extra interchange and create some revenue for itself, Expensify levees a 3% transaction fee on the cardholder. Although, the card is otherwise relatively fee-free, that's a significant surcharge.

Why would anyone pay 3% extra in order to use the Expensify card when they already have a credit card? The company believes that small businesses will pay the fee in order to get the expense manger features and to help employees separate business expenses from personal ones. Businesses could have multiple Expensify cards tied to different category of expenses (see screenshot below).

A business with just $1000/mo in expenditures would pay $360 per year. In addition, the business would tie up several hundred dollars in a prepaid account because cardholders can only make charges that do not exceed the prepaid balance held in the Expensify account.

I think the expense management concept is good, especially with the mobile receipt integration. But it's just too expensive in its current format. The founders should try to move to an ACH-based "topping off" process and remove the transaction fees.

But regardless of how this specific product performs, the integration of payments, online and mobile is a huge trend. If Expensify is nimble enough, they may be able to ride the wave.

Expensify homepage (10 Sep 2008)

Note:
1. Since I didn't see contact info on their website, here's what the founders provided at TechCrunch50: Expensify, 548 Market St. #61434, San Francisco, CA 94104, Phone: 801.745.9064

The Burst - What do you think? (Ep. 33) [The Banktastics � BanktasticTV - The Burst]

Thu Sep 11 09:53:29 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

What do you want out of The Burst?
We’ve gone back and forth on a few ideas on what to feature on The Burst - now we’re really asking for your feedback! Do you want The Burst to:

-keep discussing content from Banktastic
-discuss up-and-coming companies
-take you behind the scenes to show how we’re growing
-take a completely different turn - share your ideas!

We’re very interested in knowing what you like about our show and what direction you’d like us to take The Burst in the future. So please comment on the blog, send us emails, shoot paper airplane messages - whatever you have to do to let us know what you think!

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-The Banktastics

Retailers have improved the online shopping experience as far as they can [The Bankwatch]

Thu Sep 11 01:02:03 -0400 2008

Once in a while Doc Searls comes up with a classic statement, and this is one of those [emphasis mine].

The buyer’s envelope, please

In the meantime, consider this thesis: Amazon and other excellent online retailers have improved the online shopping experience as far as a retailer can. Yes, there is always room for improvement, but there is only so much improvement you can carry out only on the sell side, even if you’re equipping buyers to do a better and better job. At a certain point the improvements need to happen on the buy side. You need better buyers, not just better sellers. You need to improve the tools available to buyers — tools that help buyers with all sellers, and not just within each seller’s walled garden or silo.

Therefore… At a certain point the problem is no longer scale but scope.

This is the argument for Vendor Relationship Management.

Blogging Ike [Open Source CU - Home]

hi@itsjustbrent.com — Wed Sep 10 16:22:00 UTC 2008

Trey�€™s posting regular updates on Hurricane Ike as it sets its swirling sights on his credit union. Check the TDECU blog .

Not the first time a CU has used social media to keep members in the loop during disaster. See http://blog.veritycu.com/search?q=power+outage&x=0&y=0 .

Good call.

My Best Interest Announces Rate Surfer from TechCrunch50 DemoPit [NetBanker]

Jim Bruene http://www.netbanker.com — Wed Sep 10 07:53:30 UTC 2008

In addition to the 51 companies chosen in advance to demo at TechCrunch's annual conference, there are 120 more companies (note 1) in the DemoPit. The DemoPit is an area outside the main hall where the companies that didn't make the final cut to be on stage have a table where they can showcase their companies to attendees. And one lucky company, the one that collects the most tokens from attendees, will appear as company number 52 on stage in the last session tomorrow.

There were several financial services companies in the DemoPit Monday including Billeo, Expensify, and LoanKrunch. Today, there was just one, Rate Surfer from My Best Interest. Although, the service will not go live until its debut at Finovate next month, the company showed it to the public today for the first time. It also added a downloadable demo program to its website if you want a sneak peek (note 2).

What's it does
Rate Surfer is a credit card manager. It uses account aggregation technology to import balance and rate data from all your credit cards. It then uses that data to help users initiate and track credit card balance transfers across their credit cards. Although, there are still some rough edges to work out, it could potentially save users hundreds of dollars in interest every year by helping them take advantage of transfer opportunities.

Main Rate Surfer page from its demo software (9 Sep 2008)

Notes:
1. There are 120 total companies, but each gets just 12-hour day in the DemoPit, so there are 40 companies each day. Although, the Monday companies were given an extra day due to a wifi outage that plagued the hall much of Monday. In addition, to these companies, there were 33 exhibitor tables and 22 TechCrunch alumni with tables, including Cake Financial and last year's winner Mint.

2. It's a 67MB download.

Shryk Launches iThryv, Online Banking for Youth, at TechCrunch50 [NetBanker]

Jim Bruene http://www.netbanker.com — Tue Sep 09 08:36:20 UTC 2008

Two huge tech conferences opened today in California with 124 companies launching new products this week in front of a combined audience of more than 2,500 (see note 1). At DEMOfall in San Diego, 72 companies are launching new products today and tomorrow. In San Francisco, 52 companies launch at TechCrunch50 today through Wednesday.

Eight of the 124 companies are related to financial services:

DEMOfall: Rudder, GreenSherpa, BizEquity (Advanta)
Techcrunch50: iThryv (below), StockMood, PersonalRIA, exchangeP, and Emerginvest

We'll cover several of these companies, plus several in the TechCrunch50 demo pit, starting with iThryv.

iThryv kicks of TechCrunch50
I made it down from Seattle this morning just in time to catch the first demo. And I'm glad I got up so early because it just so happened to be the only personal finance/banking-related finalist. Oklahoma City-based Shryk, kicked off TechCrunch50 (note 2) by unveiling its online banking platform aimed at the 12-to-20 year-old crowd. The new service is called iThryv and it will be marketed directly to banks and credit unions who will customize and brand it for their own customer base.

iThryv will be integrated directly to the bank, or its core processor, so that real-time banking data can be displayed in various widgets. In to account info, iThryv also includes the following modules and features:

Goal-oriented savings, including rewards for reaching milestones
A spending & savings score that does for savings what a credit score does for loans
Make $ area where budding entrepreneurs can learn more about starting a business
Learn area for financial education

The company has a two-fold approach to getting iThryv into the market:

Licensing the platform to banks for a fixed fee plus per-user fees
Giving the platform to schools to incorporate into their curriculum

According to the founders, the service is currently being considered by several financial institutions, but it is not yet available online.

iThryv homepage (8 Sep 2008)

iThryv savings score graphed (8 Sep 2008)

iThryv "Make $" tab (8 Sep 2008)

Notes:
1. TechCrunch reported approximately 1,700 attendees, while DEMOfall had 800.

2. iThryv was originally scheduled to present third, but were moved up to first when Ashton Kutcher was late for his scheduled demo of his startup Blah Girls.

Payments, interchange, competition and … … Credit Unions? [The Bankwatch]

Tue Sep 09 00:40:09 -0400 2008

I sense there are big changes afoot in the payments industry in Canada. Translated that could mean changes in pricing, which in turn would mean changes for consumers. Those changes might be positive or negative, but either way are enormously significant for Banks.

Interac seeks shift to for-profit status

Mr. O’Connell fears Interac risks falling behind as the industry rapidly innovates. There are already products, such as MasterCard’s “tap & go” PayPass, that he would like Interac to be keeping up with. “The payments market is evolving every day,” he said. “It’s not just the U.S.-based credit card companies. You have PayPal, you have a number of unique payment companies in the marketplace, a number of new technologies. Look at mobile payments and its evolution in other countries around the world.

“Canada needs to ensure we can keep up and innovate in those areas,” he added

Payments revenues account for 30% +/- of payment related revenue. While interest on cards is a big revenue source, interchange is the hidden secret of revenue, and the one component that is at risk.

This presentation is just terrific. Deloitte are on fire these days, and this deck is no exception. The data and breadth of the study is enormous, and anyone in Canadian payments needs to read this. Statistics include how Banks make money from payments, and there is data on new competitors.

However what strikes me the most is the source; why am I learning about payments from the Credit Unions? This is symptomatic of the problem that Banks in Canada have. The whole “if we don’t talk about it, no-one will challenge us’ mindset is ridiculous. Go Credit Unions, and thank you for making this kind of information available.

Credit Union Central - Payments

This site is about our member services, education and training, government relations services. It explains our collective value to everyday Canadians who believe in a better way to achieve financial well-being. A warm welcome to all who visit…

deck

Mitsubishi UFJ Financial Group is expanding its involvement in the consumer finance business [The Bankwatch]

Mon Sep 08 20:28:39 -0400 2008

Tokyo Mitsubishi UFJ from Japan, and one of the worlds largest Banks follows on the recent purchase of Union Bank of California, with an increased stake in the Acom group, who have US $18 billions in personal loans.

In this volatile market banks with strength and capacity are taking advantage of the times.

MUFG raises stake in Japanese moneylender
Mitsubishi UFJ Financial Group is expanding its involvement in the consumer finance business by paying Y152.6bn ($1.4bn) to raise its stake in Acom, Japan’s biggest moneylender.

Japan’s largest banking group said Monday it would launch a tender offer for shares in Acom at Y4,000 a share, a 30 per cent premium to the average closing price in the past month, to raise its share from 15.77 to 40.4 per cent.

Credit crunch fallout will cast a long shadow | RBC [The Bankwatch]

Mon Sep 08 00:04:14 -0400 2008

IN the clearest indication yet of the depth of the credit crunch and how it will impact Canadians, Nixon of RBC speaks about the impacts on consumers.

Credit crunch fallout will cast a long shadow

The consensus of the big brains? The credit market is stabilizing, finally. But the after-effects of the Great Debt Squeeze will linger. (And by the way, they’ll probably hit your wallet, if they haven’t already.) No one was more pointed about this than Mr. Nixon, who called it the most severe financial crisis since the Great Depression and used the word “bubble” to describe the period of shrinking credit spreads and risk-taking that peaked in the first half of 2007. Here’s the thing about bubbles: Excessive enthusiasm is almost always followed by excessive pessimism when it finally bursts. Recovery to “normal” always takes longer than you think. Ask anyone who bought into the Nasdaq in 1999

… …

That means the banks’ own cost of money is likely to stay high. The credit crunch was a useful reminder to bankers of the value of a large, stable base of retail deposits. The institutions that failed - Northern Rock and Bear Stearns - didn’t have it. Everyone else wants it and they’re going to have to pay for it. That could work to savers’ advantage, but for borrowers, it’s nothing but grim news. The banks will pass on their elevated funding costs to the customers.

“I do think it’s a long-term phenomenon … perhaps until the next bubble occurs,” Mr. Nixon said.

Faith-based finance; intro to Islamic Sharia Finance | The Economist [The Bankwatch]

Fri Sep 05 10:16:51 -0400 2008

The Economist has a few articles including this one that is an excellent primer on Islamic finance.

The whys and wherefores of Islamic finance

THE modern history of Islamic finance is often dated to the 1970s, with the launch of Islamic banks in Saudi Arabia and the United Arab Emirates. But its roots stretch back 14 centuries. Islamic finance rests on the application of Islamic law, or sharia, whose primary sources are the Koran and the sayings of the Prophet Muhammad. Sharia emphasises justice and partnership. In the world of finance that translates into a ban on speculation (or gharar) and on the charging of interest (riba). The idea of a lender levying a straight interest charge, regardless of how the underlying assets fare in an uncertain world, offends against these principles—though some Muslims dispute this, arguing that the literature in sharia covering business practices is small and that terms such as “usury” and “speculation” are open to interpretation.

Wave That Flag – But You Best Hurry [Gonzobanker]

Fri Sep 05 04:00:00 -0400 2008

Hoist up your red flags and wave them with pride because if you don’t, you may find your institution reluctantly waving a white one.

KDDI Announces Launch of Jibun Bank [The Bankwatch]

Thu Sep 04 21:58:09 -0400 2008

Bank of Tokyo Mitsubishi UFJ and KDDI (5th largest bank in the world, and a telephone company) announce a new bank focussed on telephone and internet access only. Both from Japan, this is an interesting model, that levers the strength of world class companies in their respective fields.

KDDI Announces Launch of Jibun Bank Customer Services

Jibun Bank Corporation is pleased to announce that it has today started accepting applications from customers for new accounts and has launched full customer services via mobile phones (au, NTT DoCoMo, and Softbank Mobile), the Internet (PCs), and the telephone (IVR/operator).

At the same time, KDDI Corporation and the Bank of Tokyo-Mitsubishi UFJ have started marketing and opening accounts for Jibun Bank as bank agents.

Making the most of mobile phones, Jibun Bank is striving to become a financial institution with top customer satisfaction - a “personal bank for each individual customer” - providing high-quality financial services that are both convenient and secure.

Mr Banker - Where is the Chrome in your strategy? [The Bankwatch]

Thu Sep 04 21:42:36 -0400 2008

Umair always asks the big questions, and this is no exception. What struck me about Chrome is how it disrupts Microsoft’s entire business model by promoting a browser designed for the application web - MS weak point. But that’s not half the story.

How to Chrome Your Industry

Imagine what would happen if GM and Ford collaborated to invest in the components and architecture of a better public transport network — and then licensed it for free to cities, states, and countries.

Imagine what would happen if pharma players directly invested in better hospitals and clinics — instead of in trying to own the relationship with doctors, and furiously outspending one another when marketing blockbusters.

Imagine what would happen if Wal-Mart invested in town squares and parks — instead of just in featureless warehouses draining what little vitality remains in already bleak exurbs.

Imagine what would happen if P&G and Unilever invested in people’s opportunities for education, global mobility, and meaningful, authentic relationships with others — instead of just trying to control distribution channels, and then push-market more stuff to you.

Where is the Chrome in your strategy? What shared resource have you invested in - or should you invest in - to expand the pie sustainably for everyone over the long-run?

Umair goes light years further than my initial thought.

Chrome takes Google from core to edge. Chrome isn’t about building and strengthening core competencies, but edge competencies: competencies shared with others. The more Chrome - remember, it’s open source - is hacked, remixed, and tweaked, into still better browsers, engines, and plug-ins, the less Google itself has to invest to explode the utility of the entire www itself for everyone.

Chrome is not Google’s browser; it is open source, which means it is shared with anyone who wishes to make changes, provided those changes are available to all, to further improve and enhance. In other words the internet can only get better and better for all, which ironically helps everyone including Google’s competitors, which dramatically enhancing Google’s ad revenue model.

Hence the examples that Umair draws out above. His point is to seek analogies in other industries that share the attributes that Chrome offers Google.

Relevance to Bankwatch:

What is the Chrome for Banks? What are the things Bank(s) could develop and promote to open source, that would benefit them, their customers, and other Banks, and the benefit could snowball to be orders of magnitude greater than any simple new product enhancement, and in fact alter the basis of competition?

Some thoughts to get us going; feel free to note others in the comments. Umair is on to something here, that is truly innovative.

eliminate phishing: a secure standalone secure browser only for online banking, and nothing else. Any bank could use and develop provided all enhancements are freely shared with the community, ie everyone.
eliminate (ok reduce) credit problems: several banks collaborate on local financial advice centres in every city
eliminate identity theft: banks collaborate and develop IDtheftfree Inc - a system to disallow provision of credit bureau information to company or Bank unless it comes through IDtheftfree Inc. The new system has rights and authorities that are controlled only by each consumer. Credit bureau information becomes controlled by the consumer instead of the credit bureaus. By power of union, force the Equifax, TransUnion, and Experian to co-operate. Build a secure version of the thing they can’t (won’t) effectively build.

Where is the Chrome for your Bank?

Google’s legal counsel exhibit good internet practice and responsiveness [The Bankwatch]

Thu Sep 04 21:05:39 -0400 2008

What an good example of responsiveness and openness from Google’s legal counsel. Chrome is their new browser that was released 2nd Sept, and here on 4th Sept they are updating the terms of service in response to users.

The Official Google Blog

Whenever we release a product in beta as we just did with Google Chrome, we can always count on our users to come up with ways to improve it. This week’s example: several eagle-eyed users and bloggers have expressed concern that Section 11 of Google Chrome’s terms of service attempts to give us rights to any user-generated content “submitted, posted or displayed on or through” the browser.

Relevance to Bankwatch

Part of being effective as an internet company relates to this type of responsiveness. A typical Bank approach would be to review this for weeks, and make the changes quietly.

Note the blog post is issued by Mike Yang, Senior Product Counsel - a lawyer no less!

Person-to-Person (P2P) Lending Update [NetBanker]

Jim Bruene http://www.netbanker.com — Thu Sep 04 22:38:00 UTC 2008

Now that we are well past the mid-point of 2008, it's a good time to look at where we are with one of the most talked about online financial subjects of the decade: person-to-person or social lending.

Currently, there are two U.S. companies actively originating unsecured, multi-purpose P2P loans (note 1):

Prosper: Through July, the leader in the market is running 10% ahead of its 2007 loan-origination pace. The company has funded $55 million and is on pace to do just under $100 million for the year. Website traffic is up 15% compared to a year ago (see graph below) and through July there have been 13% more loan listings (see previous coverage here, Finovate 2007 Best of Show video here; monthly volume reports here).
Zopa: The company, which isn't technically person-to-person (the loans are originated by six credit union partners), but definitely has a social aspect to its loan program, has not revealed any numbers, but they have 475 loans listed on its "browse all borrowers page." Assuming, average loan size of $8000 to $9000, they are doing less than $1 million per month. Zopa is using Google AdWords to pitch "instant approval" with a credit score of 640+ (see screenshot below), an aggressive marketing move, especially combined with the 8.49% APR touted on the landing page (see screenshot below; previous coverage here, FinovateStartup 2008 Best of Show video here).

In addition, there are three more P2P lenders that appear very close to launching or relaunching:

Lending Club: The company, launched in May 2007, has been essentially closed to new business since March as they retooled its loans into securities for regulatory reasons. However, the company is scheduled to present at our Oct. 14 Finovate conference, implying that they will be out of their quiet period by then (previous coverage here, Finovate 2007 video here).
Loanio: The startup appears to finally be very close to launching based on an a Sep. 3rd email sent to its house list announcing the launch "in just a few weeks" adding in parenthesis (yes, we mean it this time!). The company will likely be the first to offer a co-borrower loan application (previous coverage here; Finovate Startup video here).
Pertuity Direct: The newest competitor in the space is Pertuity Direct which we wrote about last week. Its website claims a Sep. 15 launch and we look forward to seeing their first public demo at Finovate on Oct. 14.

Finally, there are also several companies looking to launch P2P services in 2008 or 2009, including Globefunder, Community Lend (Canada) and one we just heard about today Swap-A-Debt.

Forecast revision
Last December we published our second detailed Online Banking Report on Person-to-Person Lending. In that report, we predicted just under $200 million in originations this year. However, due to the inactive period at Lending Club, the delay in Loanio's launch, and the more conservative approach by Prosper lenders, we are lowering the 2008 forecast by 25%, with an expected total of $135 to $150 million for the year as follows:

Prosper ($95 to $105 million)
Lending Club ($25 to $30 million)
Zopa ($5 to $10 million)
Loanio ($1 to $5 million)
Pertuity Direct ($1 to $5 million)

P2P lending traffic from Compete (July 2007 through July 2008)

Zopa AdWords ad on "loanio" search
(4 Sep 2008, 1 PM PDT from Seattle IP address)

Landing page (4 Sep 2008, link here)

Notes:
1. There are also specialists involved in the student loan piece (GreenNote and Fynanz) along with Virgin Money and Loanback which help with person-to-person loan documentation and servicing.

2. Top-right graphic from April 2008 ABC News segment on Lending Club and person-to-person lending.

The power of internet, and drivers of change [The Bankwatch]

Thu Sep 04 16:03:08 -0400 2008

Internet has flattened old hierarchies, made information freely available, and eliminated distance. This is a revolutionary driver of customer expectations, and customer buying methods. It has also had the impact of opening previously closed kimono’s and exposed old style advertising for what it is … management of peoples opinions. Internet has allowed people to form their own opinions, and act on them. That empowerment is fundamental to many changes we see now.

One market driver is therefore ‘customer empowerment’.

Another driver, comes from the way customers are continually required to manage their own affairs, at the ATM, the pin pad, online banking, bill payments, office card access, airport check in, car rental drop off, quick hotel checkout, travel booking. This frequency of self service is now pervasive and required several times daily for everyone. Organizations have become impersonal and are represented by their self service touch points. Self service has been underway for a long time, and internet has only sped up that process for Banks’.

Customers appreciate self service, but the sheer pervasiveness of it, means customers are continually, comparing and evaluating it. Without realizing it, customers are comparing your bill payment web process flow, to the Hilton quick check out, the credit card pin pad machine to your ATM, etc etc. People do not interact with products; they interact with self service touch points, and that is where the value is experienced, or value is lost.

So our other main driver is the advent of ‘the experiential economy’.

While Banking has benefited from technology advances in information management, and elimination of human processes, it has absolutely not addressed these drivers. Bank motivation has been entirely financial driven by the vagaries of the quarterly announcements and the impact on stock prices.

Banking has benefited from detailed analysis of customer behavior allowing enormous profits on credit cards through targeted marketing, and portfolio management of card holders supported by high interest rates. However banking has suffered from having to bear the additional costs associated with the new technologies, and in particular the plethora of new channels, including direct mail, ATM, telephone banking, online banking, and disruption in traditional marketing channels.

Relevance to Bankwatch

How has your Bank adapted to customer empowerment within the online experiential economy? This would involve re-thinking marketing tactics, site design, and even branch personnel training and tools.

The Burst - Special Guests (Ep. 32) [The Banktastics � BanktasticTV - The Burst]

Thu Sep 04 09:57:22 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

News: Southwest joins the Cashless Airlines Move
Southwest Airlines is the latest airline to announce that it will no longer accept cash on its flights. The usual free snacks and beverages will still be there, but the items they charge for, like cocktails and energy drinks, can only be paid for with credit & debit cards as well as drink coupons. This may cause an issue for those that haven’t adopted credit or debit cards into their wallets yet.

Q&A: Would you use a Twitter clone inside of your FI?
J.B. D. recently asked the Banktastic community if we’d use a Twitter-like program inside our FIs for communication? Would something like Twitter or other networking applications be useful in your FI? Get the conversation going - share your thoughts!

News: HSBC Could Order 200,000 iPhones
Brad shared an article recently on Banktastic that discussed how HSBC is considering dropping the BlackBerry and picking up iPhones instead for its staff. This shows the significant impact that the iPhone has had on our mobile technology for a bank of this size to completely switch from the mainstream BlackBerry to the iPhone.

Brad Heading to San Antonio
Brad’s going to be speaking several times this weekend in San Antonio for the Texas Credit Union League. We wish him the best of luck on his several day trip and on his presentations!

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
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Quick Links
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See you next week!

-The Banktastics

Google Chrome browser hidden commands | last off topic post [this week] [The Bankwatch]

Wed Sep 03 22:20:18 -0400 2008

Still off topic here, but hey, internet stuff is important, right! I find this new browser stable, fast, and simple.

Here are a few undocumented commands that can be typed into the Google Chrome address bar, that provide stats on the browser operation.

about:memory

about:stats

about:histogram

about:cache

about:version

about:dns

about:plugins

about:stats

about:network

Google Chrome | new browser for Windows [The Bankwatch]

Tue Sep 02 17:08:04 -0400 2008

Update: �have tried out the new browser, and running short of superlatives. �I can only suggest that everyone at least try it. �Fast, secure, and at the same time simple to use. �Maximum use of screen is acheived by eliminating things like the status bar, and by repositioning the tabs.

Google Chrome

Will eWallets Make a Comeback on the iPhone? [NetBanker]

Jim Bruene http://www.netbanker.com — Tue Sep 02 20:29:44 UTC 2008

Since the July opening of Apple's App Store, we've been tracking the apps in the Finance category (see previous coverage here). But there are also several apps in the Productivity category of interest to financial institutions: the eWallets.

There are two wallets available in the U.S. iTunes store:

eWallet from Ilium Software: #46 in popularity in the Productivity with a cost of $9.95 and rated 3.5 stars (out of 5) across 143 reviews (see inset)
Memengo Wallet: #48 in Productivity with a $0.99 cost and rated 4 stars across 43 reviews (website)

Web-based eWallets never took off because of security concerns and because they provided only marginal improvements in desktop productivity. However, a mobile version has more utility owing to sticky notes with password reminders and credit card info, helpful to users away from their desks.

How it works
Storage of usernames and passwords for websites is the primary use of eWallet, but it also has a Finance category (see inset above) where users can store credit card numbers and contact info (see screenshots below).

That info is helpful when using a card to make a purchase online or through the mobile phone. It's also a great place to store the info in case the card itself is lost or stolen.

Financial institution opportunities
While these apps haven't gained an overwhelming following, a financial institution could offer a free version that highlights its own card offerings while providing storage space for other card numbers. That way, you get your logo on the iPhone instead of Mint, Wesabe, or some other financial institution.

The bank-branded eWallet could also include a financial calculator and direct connection to online banking.

Note:
1. For more info see our Online Banking Repot on Mobile Money & Payments.

Google Browser to be announced Tuesday Sept 2nd [The Bankwatch]

Tue Sep 02 01:33:30 -0400 2008

I have been watching for this download to happen but nothing yet. A Google browser that’s supposed to show up Tuesday. The information suggests a very efficient browser based on webkit that manages the internet better.

Internet is no longer a set of web pages. Its become a set of applications, videos, and pages with privacy and security needs that requires a different way to interact. This is exciting!

Google Chrome

Today there was a comic book in my mail, sent by Google and drawn by no less than Scott McCloud, creator of the classic Understanding Comics. Within the 38 pages, which I’ve scanned and put up, in very readable format Google gives the technical details into a project of theirs: an open source browser called Google Chrome. The book points to www.google.com/chrome, but I can’t see anything live there yet.

Community Banks: The Next Generation [Gonzobanker]

Fri Aug 29 04:00:00 -0400 2008

It wasn’t fun hearing FDIC Director Sheila Bair report this week on the state of the banking industry. Going forward, only those community banks drafting a new playbook during today’s Dark Ages will have a shot at attending the next gen community banking conferences a decade from now.

Online bill pay represents a huge cost, that will drive irrational Bank behaviour [The Bankwatch]

Thu Aug 28 22:56:01 -0400 2008

Before 1996, and the advent of online banking Banks made money from bill payment. Each bill paid required a cheque that incurred service charges, or an in branch payment, that incurred a fee. No more.

Online bill pay to cost US banks $1bn by 2010 - TowerGroup

The provision of free online bill payment services to retail banking customers will cost the US financial services industry $1 billion by 2010, according to research from TowerGroup.

The research house estimates that nearly 24 million Americans currently use electronic bill payment and presentment services (EBPP). Usage is increasing at a compound annual growth rate (CAGR) of 18% and is set to rise from 2.11 billion transactions in 2008 to 3.87 billion in 2012.

The reality, 12 years later, is that bill payment is an expected service, and one that is a net cost to Banks.

In time I would expect some Banks to attempt to recoup this cost, or avoid it by altering their fee schedules.

Banks in the US are attempting to offset these costs, with charges for expedited payment.

One way in which banks can offset some of the costs is by charging for expedited bill payments. TowerGroup says many customers are willing to pay to ensure that payments are made within 24 hours to avoid being charged for late payments.

The report forecasts expedited payments growing at a CAGR of 38% through 2012, reaching 19.35 million transactions and revenue of $101.6 million.

Relevance to Bankwatch:

While online banking has become the norm and offered by every bank, bill payment results in significant cost, including customer service and expensive telephone banking costs to manage errors. In light of the pressures on profitability we can expect some Banks’ to attempt to recoup costs associated with online banking and bill payment in other fees. This will be disastrous in my view.

US shoppers turn away from credit according to certain retailers [The Bankwatch]

Thu Aug 28 22:31:53 -0400 2008

In the clearest sign yet of impacts on the Banks from the subprime crisis, US consumers are shifting to cash or debit and away from credit cards.

US shoppers turn away from credit

Mainstream retailers are reporting that shoppers are opting for debit cards or cash instead of credit cards as they face tighter credit limits, illustrating how the wider credit crunch is being transferred to main street spending.

However the message is clouded by the fact that while certain retailers are noting the shift, Visa and Mastercard are seeing card usage relatively unchanged. The shift was first noted by Walmart, and is now followed by Lowe’s, Kohl’s and Target.

It may be that the economic impact on consumers is affecting lower income first.

The Burst - Beam Me Up (Ep. 31) [The Banktastics � BanktasticTV - The Burst]

Thu Aug 28 09:45:55 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

News: Customer bank data found on computer sold on eBay
Apparently a computer that was sold on eBay had a ton of very sensitive customer information on it. The computer, property of Graphic Data, was not supposed to be for sale, and so an investigation has begun to determine how it ended up as a listing on eBay.

Q&A: Anybody want to recommend an online training program?
Katie C. recently asked the Banktastic community for references for good online training programs. We’re bringing this question to The Burst so that we can get more responses for Katie. But Brad also had some thoughts on online training vs. in-person training. He sees online training comparable to something like online defensive driving, and says it’s easy for people to skim over something and not get proper instruction. Let us know what you think!

News: Quicken Beam Helps Consumers Keep Money in Their Pockets
David G. shared with us an article discussing Quicken Beam, a new service that works on any cell phone or mobile device and is designed to give consumers instant access to their bank balances and recent activity. If you’ve checked it out, let us know what you thought about Quicken Beam by commenting on the blog!

Send Us Videos of Funny Bank Robbers
We all know that sometimes criminals just fail, and we really wanted to include clips of botched bank robberies in this episode, but we couldn’t find anything. If you know of a link you’d like to share with us, please do and we’ll be sure to include it in an upcoming episode of The Burst!

Do You like our Sidetracking?
A couple of times now we’ve covered some random and not necessarily banking-related information, and we want to know what you think. Are you interested in having us cover more random topics along with the latest and greatest in the financial industry, or would you rather us stay the course? Let us know by commenting on the blog!

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Quick Links
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See you next week!

-The Banktastics

Pertuity Direct to Launch Person-to-Person (P2P) Lending Service [NetBanker]

Jim Bruene http://www.netbanker.com — Thu Aug 28 01:14:35 UTC 2008

Last September, we wrote about the launch of Washington D.C.-based Pertuity Direct. At the time, the startup was showing some interesting social-personal finance tools such as Dare to Compare, which allowed users to compare their financial situation to their peers and national norms (see "before" screenshot below). It looked like another online PFM play.

But, it turns out the company's true business model is person-to-person lending (aka social or P2P lending) where it will compete with Prosper, Lending Club, Loanio, and others (see note 1). Its URL redirects to a non-functional placeholder page (below) that includes only an email signup (note 2).

Here's the company description of its strategy:

Pertuity Direct is bringing the next generation of social lending to the Web - integrating simplicity, liquidity and automatic diversification into the social lending model.

The founder is Kim Muhota, an ex-banker out of PNC Bank. Pertuity Direct, which is currently closed to the general public, will demo its new product at our October Finovate conference.

Current: Pertuity Direct placeholder page with email signup
(26 Aug 2008)

Before: Pertuity Direct website before redirect put in place
(see note 1, 26 Aug 2008)

Notes:
1. For more on the P2P lending space, see our Online Banking Report on Person-to-Person Lending.

2. You can see the previous website content by following a deeper link available from Google.

The nature of social capital and trust in banking and financial services [The Bankwatch]

Tue Aug 26 12:34:42 -0400 2008

I have enjoyed a re-read of Bowling Alone during a recent vacation.� Its a fascinating book written very academically, so not an easy read.� Tons of statistics.� However the concepts that it explores are relevant and interesting for Banks.� For me it helped to sort out differences between Banks and others, and the nature of trust.� It helped me better understand social capital.

What is especially interesting and relevant for our times is that it was written in 1999.� This book predated the dot com crash, and predated the rise of social networks, yet it nailed the much of the direction of internet that we have witnessed through the twentyfirst century to date.

It does that because it takes a sweeping century wide view of social progress, and lays out the possible reasons for the shifts in a quite objective and analytical manner.

The basic premise is that the fabric of US society has altered dramatically in the last 1/3 of the twentieth century, and people are significantly less civically engaged than in the first 2/3.

We care less about civic engagement, but more about the underpinnings of that shift.� In the discussion Putman talks about social capital, and the shifts in that capital.

I see relevance here for Banks to understand their customers from a perspective that normal segmentation will not pick up.� First some definitions that the book uses, then discussion.� I am keeping this deliberately relatively brief, and if you want to delve deeper, then 540 pages await you!� Worth the read if you care about this stuff.

First some definitions, which you can skim, then the discussion.

Definitions [from "Bowling Alone]:

Social Capital:

“How does social capital work?
The term social capital emphasizes not just warm and cuddly feelings, but a wide variety of quite specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks. Social capital creates value for the people who are connected and - at least sometimes - for bystanders as well.

Social capital works through multiple channels:
- Information flows (e.g. learning about jobs, learning about candidates running for office, exchanging ideas at college, etc.) depend on social capital.

Social networks are important in all our lives, often for finding jobs, more often for finding a helping hand, companionship, or a shoulder to cry on.� [Fischer]“

Bonding Capital:

… inward looking and tend to reinforce exclusive identities and homogeneous groups.� eg fraternal organisations, church based womens groups, fashionable country clubs, ethnic enclaves, start up financing groups, etc. [sociological superglue]

Bridging Capital:

Bridging networks, by contrast are better for linkage to external assets and for information diffusion.� .. when seeking jobs, political allies the weak ties that link me to distant acquaintances who move in different circles from mine, are actually more valuable than the strong ties that link me to relatives and intimate friends, whose sociological niche is very like my own.�� [sociological WD-40]

Thick trust:

Social trust embedded in personal relations embedded in personal relations that are strong frequent and nested in wider networks.

Thin Trust

Social trust that exists beyond thick trust.� e.g. an acquaintance at the coffee shop, or at work.� Think trust rest implicitly on some background of shared social networks and expectations of reciprocity.� A standing decision to give most people - even those whom one does not know from direct experience - the benefit of the doubt.

the test: “Generally speaking, would you say that most people can be trusted, or that you can’t nbe to careful in dealing with other people” - this taps feelings about .. thin trust.

Discussion:

Putnam discusses throughout the continual balance between legal trust constituted by law and order and civil law versus the thin trust that exists around us all.� This goes to reputation of people, of groups of cities, and of countries.� Generally he concludes that thin trust is less now than 30 years ago, and there are many drivers attributed to that including television, lack of personal time, commuting separation of home location and work location etc etc.� In any event people feel less engaged and are less engaged.

However what he notes and is interesting is that people still respond to social capital despite the disincentives in our modern life.� He notes in particular the potential of internet and information technology to dramatically improve the opportunities for social capital.� [note book written in 1999].

Whether we look at social lending, or social networks like Facebook, there is much discussion and optimism on topics of ‘friends’, and levering social capital in simple and convenient ways.� It is interesting to look at those two examples plus traditional banking.

What struck me the most is that these examples are largely based today on different kinds of trust.� Facebook is all about thick trust for the most part.� Exceptions are those that choose to gather lots of friends, and in those cases I would argue not even thin trust exists, but it may be somewhat developable.

Social Lending has thin trust established between the lender and the social lending service.� There is also thin trust established between the borrower and the lending service.� These thin trusts are based on trading of confidential information, between the borrower or lender and the service.� By accepting that role as the trust broker, the social lending service is able to allow the creation of a new thin trust to exist between the lender and the borrower that could not have otherwise existed.

Its clear that all social lenders are not the same, and the securities regulatory environment hinders the development of a� broad development of thin trust by imposing other rules that obscure the underlying benefits, nonetheless this is the promise of social lending and social finance in general.

Traditional banks have no such level of social trust that can be created.� Each relationship is unique and between the customer and the bank as an organisation.� Particularly in lending, that is managed through brokers or different personal lenders each time, the relationship is defined by gathering and validation of information each time.� One of the complaints I frequently heard in my banking career was the lack of continuity in the branch, and the lack of long term relationships being built with the bankers.

Lastly looking at the bridging vs bonding, then similar patterns emerge.� FaceBook is about bonding capital, based on thick trust.

Banks have neither bonding nor bridging.� Social Lenders are to various degrees creating hybrid elements of bridging capital, and although the users are anonymous to each other, they get to know each other by user name identifiers.

Relevance to Bankwatch:

The book helped me at least to differentiate the fundamentals of the model between banks and social lenders, and between social lenders and FaceBook.� The difference is in the type of trust that forms the basis of them� FaceBook is thick trust, and I would argue a bad place to establish a business.� The old adage of doing business directly with friends (real friends) is a bad idea, prone to future disaster for the friendship.

Banks I would argue have neither thin nor think trust.� They are based on legal relationships.

Social lenders, at least, have the opportunity to lever trust, albeit thin trust that could not otherwise exist without the social lending service, and establish some bridging capital.� Bridging capital is the more powerful capital in terms of impacts on people and society.

iPhone app design toolkit [Open Source CU - Home]

hi@itsjustbrent.com — Tue Aug 26 15:21:00 UTC 2008

Photo from teehanlax.com

As some of you jump into the minimally-charted waters of iPhone-app design for your credit union, I hope these stencils and user-interface elements come in handy for mocking up and prototyping designs:

On a related note – which credit unions are doing something cool with the iPhone or iTouch? If something’s impressed you, drop a line in the comments. The best find (this is a very subjective contest) gets a $5 Starbucks card and this brilliant pair of sunglasses.

(links via Ilya Vedrashko’s Ad Lab)

Intuit Launches Quicken Beam: Free Text-Message Alerts & Balance Inquiry [NetBanker]

Jim Bruene http://www.netbanker.com — Mon Aug 25 20:59:04 UTC 2008

Intuit joined the messaging race with the beta release of Quicken Beam. The free service sends users text-messaged balance-and-activity alerts from most U.S. bank, credit card, and credit union accounts. Users may also query the service for balance plus last five transactions by texting "Bal" to the short code 636363.

Currently, the service runs independently of Quicken and can be used by anyone free of charge. According to the official press release, the service was developed in Intuit Labs.

What's innovative
It's not a new feature. Quicken Online (see second screenshot below), along with most major banks and personal finance specialists (Mint, Rudder, Wesabe), already support text-message alerts (see note 1). But this is a relatively low-cost way to hook users early on with an extremely simple service, then migrate them to more robust Intuit services later on (Quicken, QuickBooks, TurboTax).

And the Quicken stamp of approval means a lot when turning over your log-in credentials to a third party. If you want to talk to the company about Quicken Beam, Intuit will be demo'ing the latest features of Quicken Online at our Finovate Conference in October.

Financial institutions that lack text-message support might consider linking customers to Quicken Beam. Yes, you are turning customers over to another financial provider, and yes, your compliance folks will hate it. But customers are going to do it whether you want them to or not. You might as well get credit for making a solid recommendation. And realistically, using Quicken Beam is unlikely to hasten anyone's exit from your bank or credit union.

Qucken Beam homepage (25 Aug 2008)

Text messaging in Quicken Online (25 Aug 2008)

Notes:
1. Geezeo really differentiated itself with mobile capabilities in its May 2007 launch.

2. For more information, see our Online Banking Report on Personal Finance Features.

Where are Banks in Community Management? [The Bankwatch]

Mon Aug 25 13:52:35 -0400 2008

James has a good post on the shift from traditional PR to Community Management, and he explains that mechanics quite well. His example of Debbie at Wesabe is an ideal one.

BankerVision: PR shifts to Community Management

One final question is in my mind, though, is what use HSBC’s or Citi’s Community Outreach Coordinator will make of a competitive bank’s blogger like myself? Will they just ignore me, or take a leap of faith and realise that the community is powerful regardless of who is in it?

Relevance to Bankwatch:
His final paragraph says it all. With the lone exception of Ed Terpenning at Wells Fargo, where are the community managers at the big Banks? I know a large part of the reason lies in the fear of loss of control of the message. Any Banks care to comment?

Rudder (formerly SpendView) Launches New Mint-like Personal Finance Site [NetBanker]

Jim Bruene http://www.netbanker.com — Sat Aug 23 19:44:55 UTC 2008

There's a new challenger in the online PFM space, aptly named start-up Rudder which is headquartered in Houston, TX (see note 1). The company was founded in 2007 and launched last year under the name SpendView (note 2). The company raised $2 million in January from Meakem Becker Venture Capital. The founder is Nikhil Roy.

What's innovative
While it's a bit busy for my tastes, Rudder's homepage is aesthetically pleasing, and more importantly, lays out a number of remarkable benefits that every financial institution should be able to deliver on:

Finances in your inbox: emphasizes that it's pushing info to you, not relying on your obsessive monitoring of a website
Paying bills on time: They don't just help you pay the bills; Rudder makes sure you pay them ON TIME, a huge difference in terms of consumer benefits
Think forward: Everyone has a sense of what they really have in the bank after upcoming expenses are met, but Rudder actually does the math for you and shows you what's truly "free cash" in your account after accounting for upcoming payments
Every morning: Rudder provides a personal-finance heads-up each morning so you can go about your day without thinking about your finances
Safe & secure: Self-explanatory, but cannot be overlooked

Clearly, Rudder has been studying how Mint grabbed an early following with great design, advanced functionality, and a brash point of view. However, it won't be able repeat Mint's PR coup last year of winning at TechCrunch40 and our Finovate 2007 (see note 4). Rudder has scheduled its public debut at competing techfest, Demo Fall, running Sept. 7-9 and unfortunately were not on our radar screen until after the Finovate 2008 lineup was set (note 5).

What it means
You gotta love Web-based startups. It took a decade for Wells Fargo to move from delivering plain old statement info on its website to offering rudimentary personal finance functionality in My Spending Report.

But less than two years after Wesabe (note 2) kicked off the Personal Finance 2.0 era, we have dozens of cool personal finance companies looking to make a name for themselves. Mint (note 2) is the most hyped (see coverage), but there are also great things going on at Geezeo, Jwaala (note 3), Buxfer, ClearCheckbook, Mvelopes, and, of course, Quicken Online, which has Coke-like brand awareness.

And don't rule out the incumbent financial institutions. PNC Bank (post here) and Frost Bank (post here) have both introduced novel accounts that incorporate advanced personal finance functions. And Bank of America has offered full-service PFM functions since late 2006 with Yodlee-powered MyPortfolio.

Rudder homepage with five key benefits highlighted (21 Aug 2008)

Your "real" balance widget
I love the focus on what you really have in your account, after netting out all the known bills in the coming month. Here's the graphical feedback Rudder provides.

Notes:
1. Rudder seems like a good name for a financial management app. What do you think Jeffry?

2. The previous version, SpendView, is still live at , but the original spendview.com now redirects to rudder.com.

3. See Wesabe and Mint demo their latest features at the upcoming Finovate 2008. Mint won Best of Show at Finovate 2007.

4. Jwaala was Best of Show winner at Finovate Startup, April 2008.

5. Attention startups: It's never too early to make an introduction and get on our Finovate watch list. We're already putting notes together for 2009. Contact Online Banking Report/Netbanker editor Jim Bruene.

6. For more info on the space, see our Online Banking Report on Personal Finance

Platform vs market logic, applied to P2P Lending [The Bankwatch]

Sat Aug 23 04:00:45 -0400 2008

Back from vacation, and thinking about all kinds of stuff.� Long post on Social Capital coming, but meantime, and kind of related Umair does a nice job of discussing the merits of platforms and markets.� It is an important distinction, and his final quote here explains what caught my eye.

What Apple Knows That Facebook Doesn’t - Umair Haque

This conclusion also helps us answer another critical question on the minds of today’s investors, entrepreneurs, and would-be revolutionaries: when will today’s crop of startups start making serious cash? The answer: when they shift from platform logic to market logic.

He finishes by asking which players are being held back by platform thinking?� I worry about P2P Lending�being held back back by that thinking, but feel a little better after going through this exercise.� First the background:

Platform logic vs market logic

Platform thinking; is based on consistent sets of principles including these taken from the book Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation (Hardcover) that “drive success”.

1. Determine the scope of the firm
2. Design product technology strategically
3. Shape relationships with external complementors
4. Optimize internal organizational structures

The book was written in 2002, and the examples are interesting in that context.

Platforms are all about creating a monolithic enterprise that determines its own fate by being consistent and strong to the outside world.� Platforms are about convenience, including external and internal relationships, and products designed to dominate the space.� Platforms are about scale.� Think Microsoft, IBM, Intel, and in banking, Bank of America, Barclays, or HSBC.�

It sounds and feels very insular and inwardly focussed.

Market thinking;� is all about customers and offering something of value, for value.� Its about oferring something for sale that people want.� Market thinking will, as Umair says, “alter the basis of competition”.� This requires a structural shift and is designed to catch the competition wrong footed, not as platforms would, merely look to dominate, using corporate shock and awe.

P2P Lending is generally following a market logic approach

P2P Lending is in its infancy, so its hard to consider any of the players are market dominating at this early stage.

The three market attributes that Umair discusses are interesting though, to explore which, if any of the current players are exemplifying those attributes.

Markets alter the basis of competition
P2P Lending could be said to alter the basis of competition.� The interest rates and the customer processes vary, but generally they do achieve that.�

Markets cause strategic domino effect
Is there a strategic domino effect?� This will be based on scale, and as yet we are not seeing a�shift in banking as a result of P2P Lending.� Or are we?� Banks are seeking ways to enter the space and test the waters, by becoming lenders in some P2P Lending companies.��P2P Lenders are springing up around the world, with the latest count being over 30.

Yet, there is somthing holding back the ‘domino effect’.� That is regulation.� The one thing that prohibits the domino effect is regulation.� I am living that with CommunityLend, and Lending Club have filed their revised S-1 in the US.� Once we start to see regulataory approvals in place, how will the picture change?

However many are not considering, or dealing with the regulations.� Is that a good thing or a bad thing?� Regulation, and the ability to have P2P Lending be seen as a friend of safety and security will ultimately be a key factor.� Borrowing and investing are matters of finance that are all the more important to everyone concerned, following the major ball-drop by Banks’ lately.

Markets atomise the value chain
This is where existing players see their processes and products chopped into tiny pieces and taken over by new entrants who see better ways to manage things.� P2P Lenders are doing�a good job at this aspect.�

�

So it seems that P2P Lenders are pretty good on 1. and 3. but not quite so much on 2. yet.� Umair uses FaceBook and Apple to compare the platform to market approach.� He speaks of FB signing deals with incumbents and thus failing on 2.�

What of P2P Lenders allowing Banks to participate in their services?��On reflection I think this is not the same as selling out to incumbents.� Rather it is requiring incumbents to adapt to the new model if they wish to participate, and places them on the same playing field as the others in the P2P market.�

However the regulation impact is still troubling and whether enough P2P lenders will be able to see it through to establish the domino effect is key.�

Time will tell.

Take a Free Vendor Management Aptitude Test [Gonzobanker]

Fri Aug 22 04:00:00 -0400 2008

Let’s face it – the state of vendor management in the banking industry is below par. With the increased regulatory pressures and a corresponding vendor management deficit, I think a Gonzo vendor management aptitude test is in order.

Finovate 2008 Conference Demo Lineup Announced [NetBanker]

Jim Bruene http://www.netbanker.com — Fri Aug 22 02:41:38 UTC 2008

After looking at more than 100 companies, we've selected 24 finalists to present at our second annual Finovate Conference Oct. 14 in New York City (registration here). Three will emerge as Finovate Best of Show companies joining last year's winners: Mint, Mortgage Marvel from Mortgagebot, and Prosper (note 1).

In a single action-packed day, we'll see several financial startups launch, a few major product overhauls revealed, and a pile of new features shown to the public for the first time. It could be the single biggest "news day" in the history of online finance. Besides the amazing presenter lineup, the audience will contain many well-known industry analysts, press, banking and technology execs. Here are the subject that will be covered:

Person-to-person lending
Lead generation in financial services
Personal financial management and online banking
Mobile banking and payments
Payments/billing
Investing and retirement planning online
Security technologies
Social media and Web 2.0

Finovate 2008 Lineup (alphabetic order, note 2)
Below are the 21 companies we can name today, although two have not yet lifted the curtain on their product offering. The others, including two stealth startups, are keeping their identities hidden until closer to show time.

In all, seven of the companies presented at our sold-out Finovate 2007, three are graduates from Finovate Startup last April, and 14 are new to Finovate. But all 24 will be demo'ing substantial new products and/or features.

BillShrink <billshrink.com>
Boulevard R <boulevardR.com>
CheckFree <checkfree.com>
Check Point Software<checkpoint.com>
Credit Karma <creditkarma.com>
Digital Insight (Intuit) <digitalinsight.com>
FiLife (Dow Jones/IAC) <filife.com>
mFoundry <mfoundry.com>
Mint <mint.com>
MoneyAisle (NeoSaej) <moneyaisle.com>
mShift <mshift.com>
Inner8 <inner8.com>
LendingClub <lendingclub.com>
Pertuity Direct <pertuitydirect.com>
Quicken Online (Intuit) <quicken.com>
SmartHippo <smarthippo.com>
Sybase 365 <sybase.com/365>
Vidoop <vidoop.com>
Wesabe <wesabe.com>
WeSeed <weseed.com>
Yodlee <yodlee.com>

About Finovate 2008

Date: Oct. 14, 2008
Place: New York, NY (Crowne Plaza Times Square)
Cost: $995 through Sep. 30
Agenda: 12 demos in the morning (7 minutes each, NO POWERPOINT),
12 in the afternoon; each session followed by two hours of networking to meet with presenters for one-on-one discussions
Producer: Online Financial Innovations, publisher of Online Banking Report and Netbanker
Website: finovate.com
For videos of the sold-out Finovate 2007, click here

Press: Members of the media should contact Jim Bruene, jim@netbanker.com to secure a press pass.

Note:
1. Winners are selected by audience vote.
2. The list does not include two stealth startups and one company that will be named later

The Burst - How Bout Them Banktastics? (Ep. 30) [The Banktastics � BanktasticTV - The Burst]

Thu Aug 21 09:39:41 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

Brad at Texas Bankers Association
Brad’s back this week from spending some time with members of the Texas Bankers Association at their recent HR & Training Conference. We may not have any videos to show you from Brad’s trip, but we embedded some pics in the video. If you want to check out more, go here.

News: Ohio bank learns hard lesson about trademark law
I shared an article that I found on The Financial Brand Blog regarding a big lesson learned by a very old bank. Ohio Valley National Bank has been in business for 120 years, but another area bank changed its name to Ohio Valley Bank, which it immediately trademarked. After the 5-year contest period passed and the original Ohio Valley National Bank failed to make a move, they lost the right to use their name and have been forced to change it. This was a tough lesson learned by the original bank about trademark law. Don’t let this happen to you!

We Need Guest Bloggers for Finovate 2008
Mark and I are headed to NYC to cover Finovate 2008 on October 14, 2008. We’re looking to cover this event like we covered FinovateStartup 2008, which means we’ll need a couple of good guest bloggers! I’ll be in charge of making sure that the content is posted to the Banktastic Blog as soon as possible during the event, so we’ll need some people willing to share their honest opinions on the presenters while I’m doing the dirty work. If you’re going to attend Finovate 2008 and are interested in guest blogging for us, just shoot an email over to lisa@banktastic.com.

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Thanks to our sponsors!
We’d like to give a huge thank you to our sponsors, Texas State Bank! We greatly appreciate your support!

See you next week!

-The Banktastics

Could Mobile Payments Get a Boost from Lowly Stickers? [NetBanker]

Jim Bruene http://www.netbanker.com — Thu Aug 21 00:42:03 UTC 2008

Even though I have credit cards from Citibank, Wells Fargo, US Bank, American Express and Chase, I have never been offered the opportunity to add contactless payment capability to my card, so I still haven't experienced that particular wave of the future firsthand.

But it hasn't been too high up on my list of things to try, since it still requires carrying a piece of plastic or an additional device such as key-chain fob (inset). I don't see much benefit to tapping a piece of plastic compared to swiping it.

However, I do look forward to NFC-enabled mobile phones. But given the hurdles for adoption among carriers, payment processors, and issuing banks, I wasn't expecting that much before the next summer Olympics.

But now an interim workaround is being tested around the world: the contactless payment sticker. It's a quarter-sized sticker you plop on the back of your mobile phone making it instantly payment-enabled.

That allows consumers to leave their wallets at home, a nice benefit for outdoor enthusiasts, club goers, or anyone who doesn't want to worry about losing their wallet while on the go. Of course, we'll need a few million more contactless-enabled merchants before the wallet-free world is realistic for most, but widespread use of stickers could move that along (see note 1).

Who has it?
There are several rollouts under way around the world. For example:

Turkish banking giant GarantiBank recently won an industry-innovation award for its RFID sticker (press release). The sticker is produced by On Track Innovations. The bank began a pilot a year ago with several thousand Turkish customers.
Silicon Valley-based Blaze Mobile says it will be delivering a Blaze Debit MasterCard with PayPass payment sticker to subscribers of its $4.99/mo Blaze Wallet this month.
Though not yet connected to a major credit card, Malvern, PA-based USA Technologies launched its Pay Dot contactless sticker this spring (press release).

Note:
1. There are about 110,000 PayPass merchants worldwide, less than 1% of the 25 million locations that accept regular MasterCard cards.

Removing roadblocks [Open Source CU - Home]

trey@trabian.com — Tue Aug 19 19:29:00 UTC 2008

Our CEO came for a visit today. He asked each member of our seven-person team this:

“What projects are you working on? What roadblocks stand in your way?“

A year ago, Cam said:

Being ahead of your own time is not a badge of honor unless the idea saw the light of day. Let this serve as a call to action to all the ThinkTankers, BarCampers, Bloggers, and organizations who have been spending too much time talking about ideas.

Roadblocks. At the lower levels of any organization, too often the roadblocks are constructed from above. “We don’t do business that way, so that idea won’t work.”

Or maybe they’re seemingly too tough to move. “The core system won’t do that.”

Remarkable organizations have visionary leaders who remove roadblocks.

First Sales Report on an iPhone Finance App: Tipulator Downloaded 3,200 Times [NetBanker]

Jim Bruene http://www.netbanker.com — Sat Aug 16 01:13:33 UTC 2008

According to TechCrunch, the $0.99 tip calculator app from TapTapTap has been downloaded 3,200 times in the month it's been available. Net income to the developer, after Apple takes its 30% cut, is $2,200.

TapTapTap also markets a much more sophisticated location-based search tool that has generated $50,000 in revenues for the developer.

Tipulator ranked number 20 in our Aug. 5 rundown of the top-20 banking and finance apps. Today it ranked number 27.

Apple ranks the most popular apps within each category, but does not provide download totals. Tipulator numbers were provided by developer.

What it means
1. iPhone users, so far, are willing to pay for apps. Who would have thought that more than 3,000 people would go to the trouble to download an app to help them multiply their bill times 15% to 20%? And there are two tip calculators that ranked higher in the App Store.

2. There is real demand for mobile financial tools, even very simple ones. Financial institutions should consider launching a branded calculator app in the Apple App Store.

The Burst - Linked Breaches (Ep. 29) [The Banktastics � BanktasticTV - The Burst]

Fri Aug 15 09:52:08 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

Banktastic LinkedIn Group
David G., one of Banktastic’s awesome members, took it upon himself to create a group on LinkedIn for Banktastic! You can get to the group by clicking here, or search “Banktastic.com” in LinkedIn’s groups. We are super privileged to have members like David that do little things like this for Banktastic. David, you rock!

News: At Countrywide, One Overlooked PC Led to Loss of 2M Records
I shared news yesterday about an insider breach at Countrywide Home Loans. The company had sealed up all of the USB ports on employee computers, but they missed one. An employee caught the open USB port and began stealing customer information over the course of two years. The article discusses that closing off a port can be done with something as simple as glue, but that stronger measures, such as a registry hack, may need to be taken if you want to ensure that your company’s data won’t be transferred via USB ports.

Brad working with Texas Bankers Association
Brad was unable to join us this week as he was out of town working with Texas Bankers Association. As you know, TBA is the first private network to join on with Banktastic. We are super excited to have them on board! Brad has been attending one of their conferences to showcase the network this week, and he’ll have some great footage for us next week. Look forward to that!

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Thanks to our sponsors!
We’d like to give a huge thank you to our sponsors, Texas State Bank! We greatly appreciate your support!

See you next week!

-The Banktastics

GonzoBanker of the Month: Andrew Young, Northwest Savings Bank [Gonzobanker]

Fri Aug 15 04:00:00 -0400 2008

This month, GonzoBanker salutes Andrew Young at Northwest Savings Bank for demonstrating that strong leadership, a carefully considered approach and a well mapped plan can turn technology early adopters into bona fide beneficiaries.

Lending Club Adds Secondary Market to Updated S1 [NetBanker]

Jim Bruene http://www.netbanker.com — Fri Aug 15 02:32:26 UTC 2008

Lending Club filed an amended S1 statement, a positive sign that it is moving through the registration process in a timely fashion.

As we noted here after reading the original S1, Lending Club has indeed added a secondary marketing piece to its business plan. Holders of its notes (aka individual lenders), will be able to sell their Lending Club loans through a market run by an undisclosed third party.

Here's the pertinent section from pp. 50-51 of the August 1 S1 (note: the name of the partnering broker-dealer is not disclosed; hence, the blank space below):

Trading System
Lender members may not transfer their Notes except through the resale trading system operated by , a registered broker-dealer. This trading system is an Internet-based trading system on which Lending Club lender members who establish a brokerage relationship with the registered broker-dealer operating the trading system may offer their Notes for sale. In this section, we refer to lender members who have established such brokerage relationships as “subscribers.”

Subscribers may post orders to sell their Notes on the trading system at prices established by the subscriber. Other subscribers will have the opportunity to view these prices, along with historical information from the original loan posting for the member loan corresponding to the Note, an updated credit score range of the borrower member and the payment history for the Note.

I skimmed the updated S1 and didn't see anything else particularly noteworthy. Another blogger, Doughroller.net, noted that the company is adding more credit factors to its loan-pricing model. You can see the new formulas in the S1 filing (pp. 36-38).

Reward Checking Account Results: $5.5 billion Down, $2.994 Trillion to Go [NetBanker]

Jim Bruene http://www.netbanker.com — Thu Aug 14 03:23:08 UTC 2008

In the year or so that they've been widely available, so-called reward checking, those high-yielding accounts that require a hefty number of debit card transactions (see note 1), have attracted quite a following.

But besides the number of blog posts and press mentions, we've had few other metrics in which to gauge their success. Until now. In an email to me yesterday, the company behind many of the accounts, BancVue, laid out the totals rewards checking results across its client base:

381 financial institutions live
610,000 reward checking accounts
$5.5 billion on deposit in the accounts
$9,000 average balance
Opening more than 13,000 accounts per week (700,000 annual run rate)
Average of more than $14 million in deposits per financial institution
Average of 1,600 accounts per financial institution

Although $5 billion isn't even the rounding error across the entire $3-trillion U.S. retail deposit market, it's real money to the smaller banks and credit unions offering the program.

Notes:
1. Most accounts require 10 to 12 debit transactions per month in order to earn the high yield. For more info, see our previous coverage and Finovate Startup video here.
2. Upper-right graphic comes courtesy of First State Bank, Gainesville, TX.

My “email for Bankers” system [The Bankwatch]

Wed Aug 13 20:07:57 -0400 2008

Every Banker needs to read James post here. This particular paragraph resonated for me, having lived this life for years, and now being in a position to re-orchestrate my day according to my schedule. I have some suggestions …. the back to back meeting day is the death of effectiveness.

BankerVision: Email bankrupt

A cultural oddity of the bank is that we do back-to-back meetings, probably most days. So our email keeps piling up, and so many of us have resorted to fitting email processing into odd slots of the day.

I have some cures for this ailment, before you follow the person James speaks of and eliminate email. Some hard hitting comments to follow, so don’t anyone take personally.

Eliminate executive assistants. Their job is to slot meetings into the empty spaces in your calendar. They are your worst enemy. The better they are at their job, the worse your life will be. Eliminate them and do yourself. This is paramount. The rest of my suggestions are just window dressing. PS, you will also save the Bank money here.
When someone requests a meeting, ask why?
Manage the number of “Executive time” meetings where career advancement of the meeting requestor is the desired outcome. You cannot sponsor 90% of the upcoming stars in a 50,000 employee organisation. You are NOT superman.
Schedule days (not hours, days) for yourself.
Get an ipod, and earphones … best time management device ever invented … think about that!! Go here for help.
If you use Outlook (poor you) set up a filter to place the cc’s in a cc folder, and eliminate from your inbox. Read the cc folder once a week, and only if you have to. Control that urge! Do NOT tell anyone you have done this.
Use Xobni, and boggle at your own ineffectiveness

Thats it. My “email for Banks with 50,000 employees system”. Thanks James, for letting me reflect on years of falling into these traps.

Tokyo Mitsubishi UFJ invest further in UnionBanCal [The Bankwatch]

Wed Aug 13 19:45:43 -0400 2008

As predicted, here is the first example of Asian Banks seeking positive investment opportunities amongst the American Banks. In this case they are being characteristically careful and investing in one they already know.

FT.com / Lex / Financial services & property - MUFJ/UnionBanCal

The second is that the would-be buyer is Japanese. Mitsubishi UFJ wants to buy the 35 per cent it does not already own of UnionBanCal for $63 a share, implying a valuation of $8.8bn for the owner of Union Bank of California. Relatively unscathed, Japanese banks have already lent a financial hand to struggling global peers. MUFJ has bigger plans.

Time to learn about data security | Banks [The Bankwatch]

Wed Aug 13 00:35:38 -0400 2008

This latest breach of customer data at Wells highlights an issue that Banks are just not getting the message about. I don’t know the specifics of the Wells breach, but based on the theme of this post, there is absolutely NO reason for customer data to be resident on an employees laptop. Very few data breaches are as a result of hacking. More likely they result from physical theft of hardware, and that is avoidable.

Finextra: Wells Fargo hit by data breach

News of the latest Wells Fargo breach comes after reports of the theft of computer equipment containing confidential data from a Vancouver branch of TD Canada Trust.

The bank told reporters last week that the stolen equipment may have contained names, addresses, dates of birth, social insurance numbers, account numbers, bill payment details, transactions and balances.

Meanwhile earlier this month two men were arrested by the FBI on charges related to the illegal access of computers containing personal identification information of Countrywide Home loan customers and the illegal sale of the data.

Why do I say that? Employees are required to perform data analysis and all sorts of analytics. They are required to relationship manage customers, which requires data, right?

Of course these employees are required to do those things, but the Bank’s are doing them a disservice by providing a poor toolset. This is another aspect of not moving with the web lifestyle, embracing it, security and all.

First off, there is this new thing called internet. Data can be retained in ‘the cloud’. Customer data should never be permitted on a portable computer that leaves secure premises. I am now at a social lending company, and we do not even allow customer data on our premises, let alone on anyones computer. Its just not necessary.

Next, which data is required to be used. There is a concept that expert programmers and developers have teach called ‘abstraction’. The concept can be applied to any use of data. It means that the data that is to be analysed does not have identifiable customer information located with it. In that instance there some ability to prevent fraud because if the data is stolen, it is just useless data.

Finally, data that is confidential, and not abstracted, ie identifiable, must only be analysed on secure computers inside the enterprise.

In any event … rule # 1 - never allow customer identifiable information on to a portable computer that is allowed to leave secure, locked down areas in your organisation.

Intersections Inc.'s Identity Guard Brings Back 6-Month Free Trial and Adds Free Credit Report and Score [NetBanker]

Jim Bruene http://www.netbanker.com — Wed Aug 13 02:36:36 UTC 2008

Identity Guard, the direct-to-consumer credit-monitoring brand from Intersections, has a new logo, homepage design, and a compelling new offer: six months of free credit monitoring (Good Start option) PLUS 30 days of access to your credit report and score (see previous look here).

And unlike most offers in this industry, this freebie is made with no obligation. Intersections does take billing info as part of the sign-up process, but unlike most others, they will not automatically begin charging a monthly fee at the end of the six-month free trial (see note 1). Last year, Intersections offered the six-month free trial (post here), but did not include the free credit report/score (see note 2).

Identity Guard hompage (11 August 2008)

Separately, I ran across the company's banner ad today at Amazon's IMDB site (below). Here, the company is taking a more traditional approach, offering a 30-day free trial plus $3/mo discount on its flagship Total Protection service (regularly $17.99/mo).

Identity Guard banner at IMDB (12 August 2008)

Landing page from the IMDB banner (12 Aug 2008)

Notes:
1. I tested the free offer last year and can confirm that they did NOT bill me for the service after it expired, nor did they pester me to become a paying customer at the end of the trial.

2. See our Online Banking Report on Credit Monitoring Services for more information.

Investors fear another big financial firm failure [The Bankwatch]

Tue Aug 12 01:05:06 -0400 2008

The signs for Banks over the next few months is distinctly negative. I’d expect the strong ones to take advantage of the situation, and maybe we will see some surprising new alignments between Banks.

FT.com / In depth - Investors fear another big financial firm failure

Nearly 60 per cent of US and European institutional investors surveyed by Greenwich Associates believe there will be such a failure within the next six months. Another 15 per cent think it will happen in six-12 months.
“Most institutions think we are currently in the most dangerous period for global financial services firms,” said Frank Feenstra, a consultant at Greenwich Associates. “Perhaps if the markets can make it through the next six months, the level of pessimism may begin to subside.”

The survey of 146 institutions by Greenwich Associates, to be published this week, included banks, hedge funds, investment managers, mutual funds and pensions funds in the US, Canada and Europe.

In particular the recent decision by ML to sell off some of their sub prime stuff at a crazy discount has darkened the Banking sector. Its worthwhile remembering that even though sub prime is a problem, that those loans are secured by real estate which will not be worth zero. Its hard to imagine it will only be worth 78c.

They said the writedowns were partly driven by Merrill Lynch’s decision to sell $6.7bn in toxic securities to Lone Star funds, the distressed debt investor, for just 22 cents on the dollar.

Wesabe Adds Twitter Integration for Account Updates [NetBanker]

Jim Bruene http://www.netbanker.com — Mon Aug 11 19:27:36 UTC 2008

Wesabe's latest feature, the ability to update your account via Twitter, isn't likely to find too many users in the short-term. However, it's a great marketing move that could see a fair amount of uptake over time (see note 1).

Although there are less than 2 million Twitter users, the company is currently white hot, one of the most talked about Internet companies (see Google trends below, which shows Twitter search volume is 7x or 8x that of "phishing"). So why not draft off Twitter's hype, as long as it's not too costly?

How it works
After logging in to Wesabe and providing your Twitter name, you then simply send a private or public message (aka Tweets) to Wesabe's Twitter account. Wesabe then adds the expense to your cash-tracking account. You can include merchant name, expense categories, and descriptions to the transaction (see examples below).

Most common: Update via private message (no one else will see)

Less likely: Update via public message (your friends will receive it and if you have an open feed, anyone could see it)

Google Trends for Twitter vs. Phishing (9 Aug 2008)

Note:
1. Updating accounts via text message and email has much wider appeal. It's one of the recommended items in our personal finance feature set. See our Online Banking Report on Personal Finance Features for more info.

Kiva introduces a credit card [The Bankwatch]

Mon Aug 11 13:12:03 -0400 2008

Kiva, the philanthropic micro lender, has introduced a credit card that appears to fit with their model and philosophy.

The terms of the card seem quite open, and the matching programme means that your Kiva ‘grant’ paid through your Kiva credit card will be matched up to $200.

Advanta - Small Business Credit Cards and Services

Young and Free Alberta | Commonwealth CU [The Bankwatch]

Mon Aug 11 12:23:26 -0400 2008

Took another look at Commonwealth CU site, Young and Free Alberta. [hat tip azaroff.com] This is a highly novel and fresh approach top finding and retaining new customers. It is novel because they have managed to integrate the bank account with what is primarily the social site.

The site and the products are built around people starting in financial life, and includes credit cards and student cards designed for them.

Young & Free Account

If you are between 17 and 25 years of age, you qualify! No fine print; no exceptions. Fill out the form below and we’ll contact you to get you set up, or you can visit any of our branches to open an account.

Diving back in [Open Source CU - Home]

trey@trabian.com — Mon Aug 11 14:21:00 UTC 2008

For the greater part of this last year, I’ve stayed off the grid. It was tough keeping my mouth shut because – well – being quiet for more than three seconds at a time isn’t in my nature.

When I stepped away from Open Source CU in December, my new boss gave me one task: make young adults love our CU.

In January, Tim and I began talking about bringing the Young & Free brand to the US. After seeing the ins and outs of Common Wealth’s campaign, I knew it would translate well to the goal I was given on day one. But for the past eight months, we’ve kept our lips sealed.

Today, Young & Free Texas launched.

Bringing social media into a great big financial institution has given me even more respect for what pioneers like William, Shari, Ed Terpening, Ginny, Matt Davis, et al have accomplished. For starters, I’ve had real meetings with real attorneys. Lordy bagordie.

Beyond that, most of your coworkers don’t get “blog” – but they do get conversation.

I’m as fired up today about Young & Free’s potential for sparking conversation in Texas as I was when I helped introduce Young & Free Alberta at last year’s Symposium with Tim.

One factor in Common Wealth’s success has been the use of traditional marketing (i.e. offline) to support the online side of their campaign. IMHO, it’s where many companies fail, never seeing significant returns on their social media campaigns.

Too many dip their toes in the water and turn away, towel in hand to walk back up the beach and to the car. Backing up social media with a juggernaut of real world media is crucial.

It’s good to be back and, as of today, soaked.

Wesabe introduces a brilliant integration with Twitter [The Bankwatch]

Fri Aug 08 13:09:42 -0400 2008

This is one of the most ingenuous uses of Twitter we have seen yet. Wesabe as most will know are a company that sorts, annotates and analyses your spending patterns based on your data. It allows tagging and evaluation of merchants.

The new function is for cash transactions which can be inputted directly at time of purchase from your mobile using your own twitter interface.

Wesabe: Connections

If you want to tell Wesabe your transaction privately, you can use “d wesabe” to send a direct message with how much you spent and on what. If you want to track your coffee spending, for instance, you could tweet:

d wesabe $4.15 Starbucks (coffee) # tall coffee and scone

Wesabe continues to impress, and almost make thinking about your spending fun!

Any Banks on the horizon here …. ??

To be or not to be … is there a question? [Gonzobanker]

Fri Aug 08 04:00:00 -0400 2008

In light of the impositions of regulatory requirements associated with privacy, disaster recovery and data security, organizations running core systems in-house are wondering if it’s really worth the trouble.

City braced for RBS results | $4 bn loss [The Bankwatch]

Fri Aug 08 02:11:21 -0400 2008

RBS, the third largest bank in the world is expected to report a loss of nearly $4 bn today.

ITN - City braced for RBS results

The Royal Bank of Scotland is reportedly set to release the worst figures in UK banking history.
…

RBS, which owns NatWest, recently raised �12 billion from a rights
issue and is aiming to raise �950 million through the sale of its stake
in Tesco Personal Finance to the supermarket giant to shore up its
battered balance sheet.

Citi, Merrill, UBS involved in buy back of $20 Bn in ‘misrepresented’ securities [The Bankwatch]

Thu Aug 07 20:43:26 -0400 2008

In a truly remarkable turn of events Citi is essentially guilty of mis-representing the value in $7.5Bn in securities sold to investors. Merrill Lynch and UBS are also involved. The amounts ($20 Bn) and the names involved are simply staggering.

Clearly additional information is needed to better understand but the SEC has clearly taken a tough enforcement stance here. The fast and loose days are over for Banks.

FT.com / Companies / Financial services - Citigroup and Merrill in $20bn ARS agreements

In a key settlement with state and federal regulators, Citi agreed to buy back within three months $7.5bn of ARS held by individual investors and small businesses. ARS are long-term debts issued by municipalities and others whose interest rates are set at bank-backed auctions

…

The bank neither admitted nor denied wrongdoing but paid a $100m fine
to settle claims from regulators that it had misrepresented ARS as
liquid, cash-like securities.

…

Under the deal, Citi pledged fully to compensate small investors who
sold ARS at a loss after February 12, when the market collapsed. Citi,
which agreed to the deal within days of being threatened with a lawsuit
by Andrew Cuomo, the New York attorney-general, said the measures would
result in a $500m pre-tax loss.

…

After the Citi deal, Merrill announced it would offer to buy back ARS
it had sold to some 30,000 retail clients. There are $12bn of holdings
but Merrill said it expected there to be $10bn by the time it begins
the buyback in January 2009.

The Burst - Cloned Money (Ep. 28) [The Banktastics � BanktasticTV - The Burst]

Thu Aug 07 09:55:50 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

News: ATM Dispenses Double the Money Requested
A group of very lucky people in Scotland recently stumbled upon extra cash without even trying! An ATM belonging to Alliance & Leicester bank started dispensing double the money that was deducted from people’s accounts. This made for a frenzy that lasted about 30 minutes before the bank caught on and shut down the ATM. They lost several thousand pounds in that time period, but are considering asking that the money lost be returned.

Random News: Dog Clones!
We decided to take a detour for a moment to discuss something that Brad & I found interesting. A woman had a late pitbull of hers cloned and received the 5 puppy clones this past Tuesday. Apparently you, too, can clone your favorite pet for just $150,000. We justify this article in the episode above. Seriously.

News: Obopay an Grameen Team on Mobile Banking Initiative
Brad shared an article about Obopay & Grameen partnering up. The two are working to to provide banking services to a billion of the world’s poorest people by 2018. Here’s a quote from Finextra’s writeup on this partnership:

“Obopay and Grameen Solutions - the tech unit of the microfinance organisation - say the Bank A Billion initiative will provide access to financial services, including cross-border remittances, money transfer, payments, savings and credit accounts.”

This is a great initiative, and we look forward to watching it pan out!

New Feature: Become a Fan of Vendors
We know you might not always be able to provide a review for a vendor or its products, so we’ve given you the option to simply become a fan of a company! It’s really easy to get started, so head on over to the Vendors section and start getting your fan on.

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Thanks to our sponsors!
We’d like to give a huge thank you to our sponsors, Texas State Bank! We greatly appreciate your support!

See you next week!

-The Banktastics

Obopay, Grameen Solutions | BankABillion [The Bankwatch]

Wed Aug 06 15:45:30 -0400 2008

This is a groundbreaking announcement today from Obopay, and Grameen. [hat tip paymentsnews].

Note the inclusion of payments as the focus.

Payments News: Obopay, Grameen Solutions for Mobile Banking, Payments - August 06, 2008

the Grameen-Obopay Bank A Billion Initiative will provide access to affordable financial services, including cross-border remittances, money transfer, payments, savings and credit accounts. By empowering life and work endeavors with mobile technology that is ubiquitous even in the most impoverished and remote corners of the world, Grameen-Obopay are bringing the full power of banking to those who need it most.

bankabillion.org
By 2018 the world’s poor will benefit
fully from mobile banking services because everyone with a mobile phone
will have access to affordable financial services that empower their
life and work. This includes access to

Savings

Money Transfer

Payments

Micro-Credit

Obopay have been featured on netbanker, and Grameen are well known as the micro-credit Bank featuring prominently in Bangladesh, and having reached billion dollar status. The founder, Mohamed Yunus is a Nobel Prize winner. I have covered here.

I recall something about Grameen extending internationally, however this announcement is now one to watch. Interesting to see this announcement just as we see CitiBank pull in its international plans.

America’s largest Credit Unions [The Bankwatch]

Wed Aug 06 10:32:22 -0400 2008

The largest Credit Unions in the United States, by Assets and membership.

The top 50 U.S. Credit Unions

In total assets, these top 50 credit unions account for $219 billion of the $805 billion in U.S. credit unions. In members, the top 50 account for 18 million of the 89 million memberships.

Here are the top three for each category.

Top 50 by Assets

Navy Federal Credit Union, Merrifield, VA. $35.3 billion in assets.

State Employees Credit Union, Raleigh, NC. $15.9 billion in assets.

Pentagon Federal Credit Unio, Alexandria, VA. $11.9 billion in assets.

Top 50 by Membership

Navy Federal Credit Union, Merrifield, VA. 3,050,981 members.

State Employees Credit Union, Raleigh, NC. 1,446,228 members.

Pentagon Federal Credit Union, Alexandria, VA. 801,878 members.

LendingClub file revised S-1; suggests progress being made [The Bankwatch]

Tue Aug 05 00:51:31 -0400 2008

LendingClub has filed a revised S-1 with the SEC. This suggests progress, and will be as a result of comments on the original S-1. Comments from the SEC are not public until final approvals.

I need to review the copy to figure out the changes and updates. More tomorrow.

www.sec.gov

As filed with the Securities and Exchange Commission on August 1, 2008

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

LendingClub Corporation

HSBC lay the law down with local business units [The Bankwatch]

Mon Aug 04 23:34:25 -0400 2008

HSBC are doing what Citi have failed at to date. They are forcing local business units to adopt the central standard. For the life of me, I cannot tell why global Banks or any Bank with multiple business units for that matter, do not lay the law down and do the same thing.

Finextra: HSBC talks up IT integration initiative

The bank’s One HSBC initiative aims to establish a common technology platform across business units and regions. HSBC says the programme aims to “re-engineer the company so that wherever possible we use global systems”. This is expected to drive down costs and improve customer service.
… …

In the first six months the One HSBC suite was rolled out in Poland, Brunei, Australia, Russia, Chile, Indonesia and Slovakia, with another seven countries slated to deploy the technology in the second half of the year.

The alternative of allowing local business units to continue with their own strategies and that caters to local interests. However an aggregation of disparate local strategies added on to a centralised cost base of the mother ship can never be a long term successful strategy, whether within a country or globally. There are just too many examples of how that does not work. The duplications in costs are just too expensive and will not be countered by revenues that exceed those costs.

The worlds biggest banks | Economist [The Bankwatch]

Fri Aug 01 09:23:10 -0400 2008

The world’s biggest banks | Economist.com

HSBC became the world’s biggest bank last year, supplanting Bank of America, according to The Banker magazine, which ranks 1,000 banks by their holdings of tier-one capital.

Too Many Branches on the Bank Tree? [Gonzobanker]

Fri Aug 01 04:00:00 -0400 2008

Fat margins, sterling credit and great fee income are as likely to come back as dollar gas. We need to reduce capacity.

The Burst - SOS (Ep. 27) [The Banktastics � BanktasticTV - The Burst]

Thu Jul 31 09:47:05 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

One-Touch Bank?
I shared a question from Creative Brand Communication’s Blog last week to see how many FIs would be interested! An architect named Adam Kalkin recently revealed a building that’s opened by a press of a button. Creative Brand’s take was that this is a great idea for FIs! Just to pop open a branch anywhere you can would definitely be a cool move for banks.

News: 3 Waring Signs Your Bank May Fail
Brad shared a good article recently that talked about 3 warning signs that your bank may fail. All 3 of the signs were prevalent with IndyMac right before they went under. Here’s the list:

-Is your bank offering high CD rates & savings rates?
-Does your bank lend heavily in California, Las Vegas or Florida?
-Is your bank being slaughtered by the stock market?

If any of these sound like your bank, you might want to try to make some changes to prevent from going under! And if you can think of any other warning signs for others to look out for, post your comments on this blog, or share them with the Banktastic Community!

Check Out the Vendors Section!
We’ve notice an increase in activity in Vendors section lately! Several people have worked to add new companies and share their reviews, and we thank them for that! So if you haven’t checked out what’s out there lately, head on over now and get to rating! If you have any questions about rating a vendor or claiming a vendor profile, just shoot an email to lisa@banktastic.com!

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Thanks to our sponsors!
We’d like to give a huge thank you to our sponsors, Texas State Bank! We greatly appreciate your support!

See you next week!

-The Banktastics

Canadian government intervention on Interchange and the impact on rewards [The Bankwatch]

Wed Jul 30 23:45:11 -0400 2008

Had an interesting conversation today with an executive of a Credit Card issuer. The topic (one of many) was interchange in Canada. Apparently there is discussion about government regulation on interchange, as we have seen in Australia, and beginning in the US.

My facts are limited here, but something to watch for is the unintended impact. This quote from an earlier post referred back to the Globe and Mails comment that interchange essentially funded rewards programmes.

Interchange and how it is the next new problem for consumers in Canada � CommunityLend blog

Banks take in an “interchange” fee, which is a percentage of the purchase, each time a customer uses the card. It covers many of the banks’ costs, including any loyalty or points programs they offer.

Thinking this through… should the government limit interchange, the [one of the ... ] unintended consequence will be reduction or elimination of rewards programmes associated with credit card purchases. What will that mean for CIBC Aerogold, and RBC rewards?

Any Canadian credit card issuer readers care to comment?

How can your Bank help with the other 95% of a customers mindshare relative to their money [The Bankwatch]

Wed Jul 30 23:25:06 -0400 2008

After the previous post, thought I’d check out Andera, the service provider for those online account openings.

The graphic below from their site is the classic view to which all Banks with an integrated multi channel strategy aspire … ie almost every Bank.

Andera Corporate Web Site

The Andera platform offers financial institutions an end-to-end solution for online account opening and funding.

The Andera platform is accessible everywhere - to tellers, call center representatives, Website visitors, and more - on an on-demand, as-needed basis.

It got me thinking about whats missing in the picture. This picture [sorry Andera] is what bankers expect to see, but is dead wrong.

Relevance to Bankwatch:
The view above is 100% bank centric. It accurately depicts the activities customers undertake at the Bank, but those activities only account for what … 5% of the customers interactions with their money?

A more complete view would require not just web, branch and call centre, but also:

debit card purchases
credit card purchases
spending pattern analysis and advice
account alerts to mobile
messaging between bank and customer
new service notifications, and sign up or opt out
bill payment and management
etc etc

These items and the ones I missed account for the other 95% of a customers mindshare relative to their money. How can your Bank offerring help with that experience?

What is the difference between a payments oriented view and a traditional account oriented view? [The Bankwatch]

Wed Jul 30 22:49:22 -0400 2008

In a timely post while the payments meme is developed, Jim at netbanker discusses two new offerrings that go some way to take a payment oriented view for the customer.

Frost Bank Momentum Account Combines Reward Checking and Personal Financial Management (NetBanker)

The Innovations

Besides the DIY APY gimmick, the new account is noteworthy because it incorporates goal-oriented savings and transaction tracking into the interface. Users can allocate funds to one or more savings goals and setup automated transfers to the savings sub-accounts.

The interface also includes budget categorization features using the folders metaphor. And the usual charting and graphing functions are available

Example … more debit usage translates into higher interest rates.
Example … product simplification from chequing and savings features in one account
Example … budget categorisation, charting and graphing as part of the package

Relevance to Bankwatch:
What is the difference between a payments oriented view and a traditional account oriented view?

Here are a couple to get us started:-

Payments = benefits associated with increased usage
Account = terms, conditions, restrictions

Its a Wonderful Life, but not for Banks and payments [The Bankwatch]

Wed Jul 30 14:41:48 -0400 2008

The payments theme is developing, and getting resonance. Somehow, three related posts from others mashed together in a perfect concoction of elements, suggesting one view forward for smart folks keen to disrupt financial services.

Guillaume says

Guillaume’s blog � Blog Archive � A bank’s payment strategy in 3 words: Convenience, Convenience, Convenience

But at the same time, Bart Decrem, CEO of Tapulous, a social app company for the iPhone, was saying in the background: “Ease-of-use, Ease-of-use, Ease-of-use”, in other words: convenience drives customer value and their willingness to pay.

And Chris, who has been on fire lately, speaks about the Long Tail of Banking, and says:

The FinanSer: The Long Tail of Banking

However, in the case of the long tail of banking, there are no accounts. You want to reach people who were previously underserved, because it would not be profitable. Using technologies such as the internet means that, today, you can serve them. You can serve them because there are no people involved, no account onboarding process, no branches or telephone support services, and no account maintenance costs.

Finally and critically, this well written piece from James back in 2006, re-opening the Open Finance debate [Forrester Research coined the phrase in the 90's to reflect selling any product, not just your own]:

Of course, since it is impossible for a bank to offer every product to every customer in every niche, it will need to be selling the products of other institutions. That’s what Amazon does with books, ebay with retail, and iTunes with music.

Its time to go back to the drawing board, and consider the essence of the customer relationship. In the times of the fictional Bedford Falls, banking was all about the security of the bank institution, and the money in the Bank account.

But Its a Wonderful Life, was produced in 1946. Thats 62 years ago, and to say much has changed is something of an understatement.

Yet Banks are still fundamentally operating with the mindset of the “Building and Loan” bank operated by James Stewart in the movie. Everything revolves around the Bank account. Access to that account is on Bank terms, by visiting the physical location within the appointed hours. In fact in the movie Stewart rightly opens during off hours to help customers out.

What has happened to change how Banks think about accounts is that the focus for customers has shifted to access and service. Yes interest rates & fees are important, but the day to day experience is driven off the access, and that is what payments are all about.

Relevance to Bankwatch:
From a payment perspective, Banks will become obsessed with the primary client experience, which is the effect every time they make a purchase in a store, online shopping, access online banking, access an ATM in the Caribbean on vacation. That access occurs thousands of times annually. If that experience is exceptional, then the clients opinion of the Bank will be, at a minimum, better than today.

However the opportunity to excel in this area by creating new value could be enhanced by selling other products and services, even from other Banks. You could even in some cases, as Chris offers above, eliminate the account altogether.

“Addicted to consumption” | where does that leave Banks [The Bankwatch]

Wed Jul 30 03:32:09 -0400 2008

Umair writes some great stuff, but this post is a classic, and a keeper.� “We’re addicted to consumption”, and “Do we need razors with ten blades – or a single blade that never dulls?” are classic quotes that reverberate.�

The key backdrop in this piece [for me]�is the comment on the financial system.

America’s Addiction and the New Economics of Strategy - Umair Haque

Let’s re-examine the house of cards that is the global financial system. Emerging markets seek export-led growth: they undervalue their currencies, so their exports are more competitive purely in terms of price. That’s essentially a subsidy to consumers on the other side of the table – those in the developed world.

As emerging markets accumulate surpluses, they recycle them: they lend them back to the US and UK in the form of government and mortgage debt, stabilizing their economies, and amplifying the existing consumption subsidy through leverage.

Its hard to argue with anything in here.� You can resist, offer other causes of todays malaise, yet its hard to argue with the seductively simple arguments.�

The key in the argument is the notion of artificial cheapness that is otherwise known as offshoring.� Umair argues that the costs associated with the consequences of our consumption; human, social,�and environmental consequences, are far beyond anything we anticipated, and are driving us to something deeper and more consequential.

I buy this argument.� Banks are complicit.� The financial system is awash with cash, and Banks as the intermediaries that manage that cash are seeking any available outlet that offers enough return that covers their costs, plus provide�a decent margin.� Ergo the subprime debacle.� What rational banker would say that investing in real estate to 100% loan to value ratio, with expectation of repayment from people with high probability of default was a good idea.

Yet that is not the whole story.� Banks have been living off the consumer consumption binge, which was funded by loans against appreciating real estate values.� Real estate values are now down in the western economies.� They will not rise soon.� In the UK the voice of reason is taking over and the expectation is that house prices must adapt to the new expectation; that is much lower than the bubble times we have just seen.�

Relevance to Bankwatch:

The Banking system is in trouble for many reasons, and it goes beyond the subprime crisis.� Banks are complicit in the subprime crisis, and are paying the cost.�� Yet who is paying the cost?� Certainly not the senior management of the Banks�during this period.� In previous recessions, or economic downturns,� the consumer and business�services charges and interest pulled the Banks back out.�� Yet if we accept the premise that the consumption overload is over, then the associated lending spree is over too.

Banks cannot count on the traditional way out of a recession by expanded consumer borrowing supported by home buying and related increasing home values.� We are entering a different scenario now, and these are uncharted waters.

“Banks define themselves in terms of commodity products” | stealingshare.com [The Bankwatch]

Tue Jul 29 15:44:49 -0400 2008

Well stated conclusion on this study of US Bank brands. This particular quote resonates:

Banks currently define themselves and their brand in terms of commodity products and expect customers to switch banks so that they can have “all the things they currently get from their current bank.”

The piece is full of memorable quotes, and goes on to say

What banks need is a new brand promise, one that is a reflection of who the target audience is when they use that bank and is positioned against the competition. The problem now is that the players in the market say the same thing so they are not positioned against anybody

Finally, here is their “take the test”. Their point is that the statements apply to all Banks, and are instantly recogniseable.

Stealing Share | Increasing Market Share | Brand Company | Bank Study

Is it as bad as we have said? Take the test. Take any bank you can think of and insert its name here-

* (Insert Bank Name Here) has many ATMs
* (Insert Bank Name Here) has convenient hours and locations
* (Insert Bank Name Here) has free checking
* (Insert Bank Name Here) has friendly employees
* (Insert Bank Name Here) has online banking
* (Insert Bank Name Here) has credit cards
* (Insert Bank Name Here) gives you more
* (Insert Bank Name Here) really wants my business
* (Insert Bank Name Here) has competitive rates

Payments - the impossible dream for Banks? [The Bankwatch]

Mon Jul 28 22:52:49 -0400 2008

Payments have been bandied around as the next big thing at Banks, and several large Banks have appointed Payments Heads.�

Summary:� The payments person is embedded in the technology side of the business, and is restricted to viewing their mnadate from that perspective.�

I have been studying reports from Deloitte in their financial services research area.� The theme in this quote is agonisingly true about most things in Banks, and certainly in payments.

At most banks, payments processes are separated and siloed by product—credit cards, debit cards, checks, ACH transactions, and wire transfers are each supported by independent databases and back-end settlement networks.

Why are payments important?� As I stated earlier, when we look at payments not as technology or standards, but as customer experience it becomes self evident why they matter.

Payments come across as obscure to many, but if we think of them not as SEPA, or as interchange, but as customer experience, the complexity falls away. If ever anything is crying for innovation it has to be payments.

Briefly, my earlier point was that customers have shifted to self service.� At a high level, self service allows two types of financial activity … view balances, or move money.� Moving money is payments.� So why are Banks insisting on putting customers through payment hell!� It is about to get worse in Canada when the technology solution of chip cards hits.� [Look for 25-50% longer times at the ATM]� Certainly something has to be done about the organised crime fraud at ATM’s but this will not improve the customer experience.� Where is the opposing benefit that will make me want to have a chip card?

Banks and their credit card affiliates have made the payment mechanisms that customers must use, very complicated, and in fact they are driven by Visa and MasterCard to�a large extent.�

Yet Paypal shifts billions daily using the same Banking system that Banks provide.� Paypal are [ last I heard ] hooked up to the ACH at Wells Fargo, and quietly disintermediating all the Banks using their own systems!� I am not sure who Paypal use in Canada, but one of the Banks is likely involved.�

Relevance to Bankwatch:

When it comes to payments Banks are giving away the shop yet not levering their own systems themselves.� When Paypal moves money using ACH/ EFT those funds�are held to 48 hours before being cleared.� In Canada, the�Banks set up EMT (Electronic Money Transfer using a backend based on email and password methology) and that offerred instant payments.� That was a new and additional infrastructure.�

Why not lever your own systems, and out Paypal within instant ACH/ EFT?� Yes there are regulations and rules, but if Paypal can do it on your own backbone, can’t you improve on it?

UPDATE:

Gavin talks about Banks getting left behind

Anaece

World Bank promotes mobile banking in Maldives [The Bankwatch]

Sun Jul 27 12:34:29 -0400 2008

The Maldives are getting mobile banking as a solution to offer banking to a country spread over 250 islands in the Indian Ocean. They were badly hit by the 2004 Tsunami, and many who had no access to or trust in a Banks, lost their savings which were kept in a tin under the bed.

The new system is funded by the World Bank, and offered through Dhiraagu, the Government owned telcom.

BBC NEWS | South Asia | Mobile banking boosts Maldives

As the mobile network on the islands does not support text messaging, the system works through phone calls - which has the additional benefit of being accessible to illiterate workers. However, there have been some questions raised about the government’s role in the project.

I looked at their beta mobile site, and it is basically an IVR (VRU) system.

Dhiraagu Online Bill Balance Enquiry Service -727 will enable
customers to dial 727 and get their outstanding balances in the last
printed bill.

Simply dial 727, from any telephone with tone dialing.
You will be prompted to enter your account number.
Then you will be prompted to enter your PIN code
Once the account number and PIN code is validated the system will automatically read out your outstanding balance.

Tom Standage of The Economist notes that this appears to be an experiment by the World Bank.

“What’s interesting about this system in the Maldives is that it’s an
experiment, as far as I can see, that the World Bank is setting up as a
way of extending credit to people.”

Zopa, CEO Douglas H. Dolton - SNW Interview [The Bankwatch]

Sat Jul 26 22:15:25 -0400 2008

Interview with Doug Dolton, CEO of Zopa, the social lending company with offices in UK, US, Italy, and Japan. He has some interesting thoughts, and bullish views on the scale that social finance will achieve over time.

Social Networking Watch: Zopa, CEO Douglas H. Dolton - SNW Interview

What is your long term vision? Where could you see Zopa and the industry being in 10 years time?

I honesty think that the efficiency, convenience and trust that you get with dealing with an entity like Zopa will become more and more attractive to people. I can see this will be a multi-billion dollar business. 10 years from now or so, we’re going to have quite a bit of interactive social finance activities taking place with unsecured consumer loans and who knows beyond where that could go. Transactions involving currency exchange, transactions involved car insurance – that’s another thought, where a group of people will come together and pool their resources to provide the first tier of losses associated with car insurance and then they will buy a blanket coverage to provide a full coverage to everybody. As time goes on, we will see more and more of this democratization of finance taking place with transactions well beyond simply unsecured consumer loans.

Get your own Banktastic & CU Scoop shirts! [The Banktastics � BanktasticTV - The Burst]

Fri Jul 25 11:02:39 -0400 2008

As you saw yesterday on episode 26 of BanktasticTV’s “The Burst”, we’ve created some awesome BanktasticTV shirts that you can order. Click the images below to get your hands on one now.

The Banktastic Shirt

The CU Scoop Shirt

And a big congratulations to Christopher M. for being the first to comment on The Burst yesterday and winning his very own Banktastic shirt! Expect that in the mail soon, Chris.

Care for a Steamin’ Heap of Vendor Stew? [Gonzobanker]

Fri Jul 25 04:00:00 -0400 2008

Let this serve as the best and worst goings-on at the major core vendors right now.

The Future of Financial Branding pt. 2 [Open Source CU - Home]

jpilcher@webermarketing.com — Thu Jul 24 16:25:00 UTC 2008

(This is the second half of “The Future of Financial Branding.” Click here to read Part 1 .)

Prediction #4: Traditional branches will thrive.

Ten years ago, people predicted that online banking would kill traditional branches. That hasn�€™t happened, and it probably never will.

While a physical branch presence is no longer a pre-requisite in financial services, there is (and probably always will be) a measurable segment of the population that wants/needs to walk into a branch to talk to a real person. If not for routine transactions, certainly the big ones, like home loans.

The real tragedy is that traditional branches (as in �€œthe way we�€™ve always done it�€�) will also thrive. With startling frequency, cookie-cutter branches are built with almost no strategy or scrutiny from senior management. Local architects are hired, and they do what�€™s expected: Build something that looks like a bank. That�€™s how you end up with 12 teller stations sealed off behind bullet-proof glass. Warm and personal? Phbbbt… More like transaction factories.

That said, a growing number of financial institutions seem to be grasping the importance of using branches to stand out. Of course, they seem to frequently borrow each other�€™s branch models instead of engineering their own unique experiences (see Prediction #5) �€” e.g., concierges/greeter stations and coffee cafes.

Prediction #5: Innovation will come from extensive R&D.

Sorry, but that�€™s �€œRipoff & Duplicate,�€� not �€œResearch & Development.�€� History proves that everything successful in the financial industry gets copied at some point or another. But in the future, duplication will occur almost instantly. Some things will be copied before anyone knows for sure how well it works.

And where will these new ideas come from? Not from within the financial industry itself. The most disruptive forces in financial services will sneak up from outsiders and entrepreneurs, especially online startups like those frequently covered by NetBanker.

Prediction #6: Being green won�€™t make a difference.

Being green will make a difference for the environment, and that�€™s great. But will it create any kind of brand boost for financial institutions in the future? Not really. Why? Because in 10 years, everyone will be doing it. Everyone will have to �€œbe green.�€� It�€™s something consumers will simply expect.

That said, the green bandwagon is filling up quickly. So you better hop on now before you get left behind. In 10 years, being un-green, well, that�€™s a whole different story. Ten years from now, if you want to see a consumer backlash, try telling people you don�€™t offer basic �€œgreen�€� stuff like e-statements.

There will always be room in the consumer�€™s hall of fame for hardcore financial brands that take green to the nth degree. But only a handful of organizations are really capable of taking their green commitment to the fullest possible extent. Truthfully, only a small handful of companies in any industry are comfortable taking anything to the max, which is precisely what effective branding requires… and why so few can do it well.

Conclusion

These are just a few of the trends that fuel the massive homogeneity shared by the thousands upon thousands of banks and credit unions in North America.

Any difference, no matter how big or small, will capture people�€™s attention. Ten years from now, those financial brands that seek out and foster these differences will thrive, leaving others to compete on price and grow through mergers.

In the meantime, many banks and credit unions will roll-out superficial rebranding campaigns and cosmetic makeovers (many hitched to name changes and mergers), only a handful will muster the hoohahs to really stand out. Even fewer will commit the resources to really pull it off.

For regular readers of this blog, it can be easy to get wrapped up in the excitement of the occasional breakthrough like Umpqua Bank, Young & Free and The Addison Café. But these represent a mere micro-fraction of the vast sea of me-too financial service providers out there.

If it�€™s any relief, know this: This isn�€™t just a problem facing financial institutions. It happens in every industry. Branding is hard. Good branding flies in the face of our instincts �€” instincts that tell us that �€œfitting in�€� and sticking with the pack is the best formula for survival.

If you read this far, the good news is that you are probably in a role to help prevent this sameness from happening—at least at your organization. It’s never to late to get started. Just don’t wait 10 years.

Jeffry Pilcher, publisher of The Financial Brand, has worked exclusively on financial brands for the last eight years. In summer months when he isn�€™t knee-deep in credit union brands and names, he�€™s knee deep in Alaska�€™s rivers, fishing for king salmon. The rest of his free time with is spent with his wife, Tina, or loving his faithfully devoted dogs Dude and Sweet P.

Subscribe to The Financial Brand�€™s RSS feed here or sign-up for the email bulletin here.

The Burst - Shirts, iPhones & Rumors (Ep. 26) [The Banktastics � BanktasticTV - The Burst]

Thu Jul 24 09:54:39 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

Get Some BanktasticTV Tees!
Brad created some awesome shirts for you guys on Zazzle! But the best part is that the first person to comment on this episode on the blog gets a shirt for FREE! If you don’t happen to comment first but still want a shirt, let us know and we’ll get you the information so that you can order one!

Q&A: Is the financial crisis only affecting banks and not CUs?
Brad asked a question on Banktastic to see if you all think CUs are being affected as much as banks have been by the recent mortgage crisis and recession. We think that perhaps CUs have stricter lending practices, which might be why they’re not running into as many issues as banks are right now. These are just our thoughts, and we’d love to hear what you think! Post your thoughts on the question on Banktastic, or comment on the blog!

Brad got his iPhone!
It didn’t take long, but it finally came in - Brad got his iPhone! He’s rather impressed with it so far and loving the new apps. We actually started chatting it up a little bit about an app that shows people where you are at any given time. There are already some apps out there that perform similar tasks, but not necessarily what we’re talking about. Watch the episode to check out our idea, and see if you think you’d want something like that on your phone.

Possible Facebook Payments App?
The Facebook F8 Conference was Wednesday, and there were rumors that Facebook was creating a payments app. Not knowing much more than that, Brad and I speculated that it would be an application to serve developers so that they can charge for their apps or accept donations.

However, the F8 Conference is over, and we’ve got some bad news. No payments app has been released. However, Zuckerberg unveiled Facebook Connect. To learn more about that, click on the link above and read all about it!

Subscribe to Banktastic on iTunes
All of BanktatsicTV’s shows are available on iTunes now! Click here to access our podcast page to subscribe, or open iTunes and search “BanktasticTV.”

Email Us!
Feel free to email comments or suggestions about “The Burst” to brad@banktastic.com, or post your thoughts on the Banktastic Community.

Thanks to our sponsors!
We’d like to give a huge thank you to our sponsors, Texas State Bank! We greatly appreciate your support!

See you next week!

-The Banktastics

Dear CUs: How do you manage the social? [Open Source CU - Home]

hi@itsjustbrent.com — Tue Jul 22 07:13:00 UTC 2008

Many social media tools are either cheap or free (including blogging platforms like Wordpress and Blogger, DIY social networks like Ning, podcasting tools like Odeo, and online video like YouTube and Viddler).

But as anyone who’s jumped into the space can tell you, this doesn’t mean social media is a cost-free answer to a given strategy. The big costs are time and commitment. Creativity. Empathy. Enthusiasm. From a person or group of people. And it can almost become a double-edged sword, because the more successful your social media initiatives are – the more people are participating in your community and conversation – the more resources are required to manage it all.

From moderating comments, to creating content, to monitoring conversation elsewhere on the web – social media, a prospect that at first glance may look shiny, new, accessible, and cost-effective, can be extremely resource intensive.

So I want to ask some credit unions that are doing it, some of which I’ve called out specifically below: How do you approach resource management for your social media projects?

Do you hire a community manager? Do you clear room from an existing employee’s plate? Do you spread the work out among several employees? Do you close your eyes and hope for the best?

And beyond that, maybe the scariest thing of all, what if the initiative goes really, really well? What if your community becomes enormous and active? How do you plan to grow with them?

(I’d love to hear from: Carolina Postal CU’s Deb McLean, MidState Educator’s CU’s Danielle Chatfield, Members CU’s Matt Davis, UTFCU’s Brandon Ballentine, Premier CU, Whoever is overseeing America First CU’s Review System, Verity CU’s Shari Storm, Vancity’s William Azaroff & Kate Dugas, and anyone else who’s hands are dirty with social media.)

Gene Blishen is GonzoBanker of the month [Open Source CU - Home]

hi@itsjustbrent.com — Mon Jul 21 20:11:00 UTC 2008

The brilliant and sometimes hilarious folks at GonzoBanker have written up Gene Blishen as GonzoBanker of the Month. Gene is General Manger of mac-only Mt. Lehman Credit Union, located just outside of Vancouver.

If you work in the industry (or don’t, for that matter), Gene is a person you should get to know. He’s a creative, people-driven thinker, and if you have a conversation with him you’re guaranteed a head full of new ideas.

Read the article here.

(PS: If you’d like to idea-swap with him and a lot of other inspired industry folks, join us in September at BarCampBankBC.)

GonzoBanker of the Month: Gene Blishen of Mount Lehman Credit Union [Gonzobanker]

Fri Jul 18 04:00:00 -0400 2008

GonzoBanker is pleased to name Gene Blishen, General Manager of Mount Lehman Credit Union as our July GonzoBanker of the Month. We’re enthused about Gene’s holistic view of technology and his dedication to fine tuning it to serve the specific needs of individual credit union members.

The Burst - Prepare for a Lockdown (Ep. 25) [The Banktastics � BanktasticTV - The Burst]

Thu Jul 17 09:47:21 -0400 2008

Download this video

Thanks for checking out this episode of BanktasticTV’s “The Burst.” Here are some important notes about this episode:

Our Sponsor Gets Slammed!
Texas State Bank, BanktasticTV’s current sponsor, has made it big in the viral video business lately. One of their cameras caught a truck pulling a camper as it ran into their covered drive-thru banking area, pulling everything down with it. You can watch the video clip in the above episode. It’s pretty crazy to think that everybody made it out just fine! Neither of us thought anybody could walk away from that! Amazing video - watch it!

Q&A: Is your FI prepared to help Boomers?
An article that I found on Payment Industry Insider spawned a question I wanted to ask the Banktastic community. Is your FI working to help Boomers prepare for retirement? They’re a huge demographic and deserve your attention! The major hype lately has been on attracting Gen Y, but your loyal customers in the Boomers group are getting ready to retire and they need your help! Over 60% of this demographic is concerned about not having enough money to retire or to cover medical costs.

The question really is this: do you have any programs established to help the Boomers along as they take this big step? They could use your guidance, and this is a great opportunity for your FI! Let us know if you have any programs or ideas!

The iPhone: Evolutionary or Revolutionary?
Some discussions are going on about whether the iPhone is going to revolutionize the banking industry. Since it’s release on July 11, the new iPhone is making a huge splash, and FIs are taking notice. Many have worked to create apps to coincide with the new iPhone release. With the phone’s technology and banks’ work to create apps to work with it, some are considering the iPhone to be a revolutionary tool for the banking industry. Others completely disagree and think it’s going to take a heck of a lot more than a phone to get a banking revolution. A lot of people are getting in on the discussion, so go check it out and add your thoughts!

Also, if you want to read Brad’s recent experience trying to get his hands on one of the new iPhones, click here. It’s a shame, but there are probably countless others going through the same situation he described in his blog post.

News: Disgruntled Employee Locks San Francisco Out of Network
I stumbled across this news story recently, and I had to share it with Banktastic. Apparently a disgruntled computer network admin, Terry Childs, got some less than stellar reviews at work, so he locked up San Francisco’s computer network by putting in his own password and refusing to give the right one to authorities. Officials have been unable to crack the access codes on their own, and are worried that he may have sabotaged the system to leak some critical data. Either way, this guy is in a huge pile of trouble - in jail on $5 million bond. Yikes.

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See you next week!

-The Banktastics

The Future of Financial Branding pt. 1 [Open Source CU - Home]

jpilcher@webermarketing.com — Tue Jul 15 14:44:00 UTC 2008

Looking out 10 years at the landscape of financial brands, what will we see? Here�€™s six trends (Editor’s note: three now, three later).

Prediction #1: More of the same.

The vast majority of financial institutions will continue their pursuit of �€œbetter sameness�€� in lieu of real differentiation. They will continue to apply imaginary rules about what financial institutions should and shouldn�€™t look like. These self-imposed restrictions will keep most banks and credit unions (and investment firms and insurance agencies) from doing things that are fun, daring unique or otherwise interesting, mostly because they presume they need to project a �€œsafe�€� image.

Reality Check: Playing it safe with your brand strategy is about the riskiest thing you can do.

Surely there will always be a few rogues who break from the herd, but these are few and far between.

In the near future, financial institutions will continue their race to the middle. Banks will get more credit-union-like, as they adopt kindler, gentler personalities and pursue community-centered strategies. And credit unions will continue get more bank-like, as they merge, change names and add things like business services and commercial loans.

Prediction #2: More self-deception about service.

Ten years from now, you can walk into any geographic market in America (maybe even the world) and ask 10 financial institutions what differentiates them. They�€™ll probably all say the same thing, just as they do today : �€œIt�€™s our service!�€� At least nine of them will be lying. In all likelihood, all of them will be.

It�€™s unfortunate, but all too many financial institutions continue to perpetuate this �€œour-service-is-better�€� myth. They insist on fooling themselves with this common (but completely unsubstantiated) belief that their service is truly what differentiates them. They are the ones with �€œwarm, friendly, personal service.�€�

Who are these dreadful competitors delivering such a crappy experience that you can stand out as a such a shiny beacon of service? Be honest. When was the last time you walked into a financial institution other than your own?

Reality Check: You can�€™t outsmile the competition �€“ not now, not 10 years from now. Only one or two financial institutions in any market/niche stand out for their exceptionally good �€” or exceptionally bad �€” service.

Clinging to the �€œour-service-is-better�€� lie stunts the growth of many financial brands. It will continue prohibiting them from realizing any sort of true differentiation and achieving their ultimate potential.

Prediction #3: More me-too names.

One thing is for certain: Those nostalgic for the days when every credit union had a �€œwhere/who�€� name like Lincoln County Teachers Credit Union will be disappointed. The trend of credit unions changing names will continue to be strong, but not because they are enamored with growth (as some suggest).

Credit unions will continue to have to change names when their major SEGs disappear. Others will have to change names because they will be forced to. Eventually, almost every single credit union hitched to a major brand will have to change names, because �€” quite understandably �€” these iconic brands want to protect their trademarks. If you have a name like John Deere (or even University of Something), a letter from a lawyer could be on the way. In fact, you can probably count on it.

When the time comes to change names, banks and credit unions will continue to pick familiar-sounding monikers. Expect more financial institutions to roll-out names with meaningless words like �€œFirst�€� and �€œOne,�€� while others opt for everyone�€™s favorite feel-good terms like �€œCommunity�€� and �€œNeighbors.�€�

Reality Check: If you think a particular name sounds safe, it almost surely isn�€™t. Every name that sounds �€œfinancial�€� is already taken by someone somewhere in the industry. Picking a �€œsafe-sounding name�€� comes with the very real risk of getting sued and being forced to start over �€” at significant cost.

The good news is two-fold. First, renaming problems are completely avoidable. Second, resistance to unconventional names that once might have seemed unthinkable is eroding. Names that once would have sounded off-category, such as Jwaala, Zopa and Red Canoe will become increasingly more common.

(Up next: Brick-and-Mortar, Innovation, and The Problem With Green)

Update: Click here to read Part 2 .

Subscribe to The Financial Brand�€™s RSS feed here or sign-up for the email bulletin here.

Welcome to Process Design 101 [Gonzobanker]

Fri Jul 11 04:00:00 -0400 2008

At the Escher-Goldberg School of Service Process Design, we pride ourselves in helping students learn how to accept and embrace a world of confusing and redundant process.

Leave it to Beaver [Open Source CU - Home]

georgehofheimer@filene.org — Tue Jul 01 16:31:00 UTC 2008

From the first day of kindergarten we are taught to get along with others and work together. In the normal course of events, though, most kindergartners act more like Mike Myers in the famous Philip the Hyper Hypo Kid skit on SNL than Beaver Cleaver.

Of the many challenges and opportunities facing credit unions, none is more daunting than the topic of getting along with others and working together (a.k.a. “large-scale collaboration”). We’ve tried to break down these challenges in a recent research publication. I would be curious to hear people’s thoughts on a few things:

Are credit unions more like Philip (kinetically going out on their own) or the “Beav” (extremely cooperative) when it comes to collaboration? Which is more appropriate for today’s realities?
What do you see as the benefits and costs of large-scale collaboration?
Do you have good stories to share on credit union collaboration that aren’t widely known?

Filene is already conducting more research on the topic of large-scale credit union collaboration because we think it’s a pretty darn important topic for credit unions to consider in these changing and challenging times.

(Editor’s note from Brent: On a related – but completely unrelated – note: Eddie Haskell is speaking at an upcoming CUNA event. That’s all.)

George Hofheimer is Chief Research Officer for the Filene Research Institute, a think tank that investigates vital issues affecting credit unions and consumer finance. He lives in Madison, Wisconsin with his wife Carrie and two boys Huck and Milo. He is a washed up marathoner and an over-ambitious soccer player.

Let the Fireworks Begin! [Gonzobanker]

Tue Jul 01 04:00:00 -0400 2008

It has been a while since I engaged in a vigorous rant, so in the spirit of the 4th of July, it’s time to ignite a barrel full of roman candles, a carton of bottle rockets and possibly launch an array of cherry bombs. The target: ATM FEES.

Partnership Symposium polls are now open [Open Source CU - Home]

hi@itsjustbrent.com — Mon Jun 30 16:05:00 UTC 2008

It’s time to vote on your favorite speaker slot submission for the 2008 Partnership Symposium. From the FORUM Solutions blog (some links added):

Ron suggested that we open up the selection process for the open speaking slot to you, ala American Idol. At the present time, we have four stellar entries to choose from. If there are others out there then please let us know.

Please visit this page to view the video auditions and cast your vote.

This is important stuff here so take your voting privileges seriously. Just ask Tim McAlpine. We want you to vote for the candidate that will add the most value to the symposium and not just the cleverness of the video �€“ they are all exceptional so focus on the value. We also don’t want any hanging chads or Michigan and Florida delegate issues so we are asking you to enter your name and email address to validate the vote after you choose your candidate.

Click here to rock the vote.

Living on purpose [Open Source CU - Home]

hi@itsjustbrent.com — Fri Jun 27 23:53:00 UTC 2008

Frugality and thrift allow us to emphasize those things that are most important in our lives. When we restrict our spending on the unimportant, we’re able to indulge ourselves on the things that matter most.

...from Get Rich Slowly’s ‘The Art of Frugal Living’

(via Aaron Martin)

"I'm going to have to go ahead and ask you to come in on Sunday, too" [Open Source CU - Home]

benrogers@filene.org — Thu Jun 26 16:50:00 UTC 2008

It’s easy to picture Peter, Michael and Samir- sensitive ears beware – on the where-not-to-work reel. It’s a little harder to purge the reel from your credit union and recruit well.

At the beginning of Filene’s 30 Under 30 experiment, we polled the participants on how many had planned to work at a credit union. The answer: not one. Here are four things that will get good employees flowing into credit unions … but only if we make it so.

1 �€� Consolidation

Blasé as this may sound, credit union consolidation doesn’t scare me. I think it’s good. One of the main reasons is that growing and large credit unions (along with a progressive cohort of smaller peers) can carve out a better place for talented employees. Heritage CU ($146 million) in Madison, Wisconsin, is big enough to have a VP of Innovation; their $40 million neighbors are probably unable to justify, let alone support, the expense.

Walter Biernacki was the first person in my short business stint who articulated growth as a recruiting and retention imperative. This CEO of Arkansas FCU, which grew assets by 20% last year, told me that if he doesn’t grow, he won’t have a place to keep the rising stars at his credit union, and he’ll have fewer places to put any new ones.

2 �€� Better tools

When CUhire.com launched earlier this year, I caught an inkling of of how credit union recruiting could go: Great young employee loves the credit union > Credit union painlessly taps great young employee’s electronic social network > Much great employment ensues.

As far as I can tell, CUhire doesn’t do that. It’s a well-executed take on the traditional post-and-publish recruiting model. They do have an in-site “talent network” for submitting resumés and one of their senior partners has a LinkedIn network that exceeds 500 contacts, but it’s still an agency-driven approach.

Much more powerful (and local and inexpensive) is the prospect of letting the employees you’d like to replicate actively push your job descriptions through their Facebook or MySpace or Stache Passions profiles. Hey, even have them send an old-fashioned e-mail to their college friends, fellow parishioners or military buddies. If they love you already, they’ll do it for free. If you want them to love you more, you’ll pay them a commission when you hire the kid who sat across from them in French 5.

3 �€� Not social responsibility (yet)

I kept trying to write up social responsibility as a recruiting tool, and I just couldn’t find the meat. That’s not because I don’t think it’s a good attractor in today’s business environment; instead, it’s because most credit unions are plain vanilla deposits-in, loans-out places. Social responsibility is in the credit union genotype, but it’s rarely expressed.

Credit unions as a whole used to be progressive when progressive meant giving out small loans, giving you a peer-reviewed shot at a larger loan, or providing the right place to cash your paycheck. One hundred years in and ALL the novelty has worn off of those differentiators. What’s left? Slightly better rates and the memory of when our service used to be better.

Try a quick Google search for “hybrid auto loan” and you’ll catch a full list of credit unions. Take a look at what REAL Solutions is trying to do. Sign up for a Zopa account, or take a look at Amplify’s online tools. Today, the system is not progressive, but individual credit unions can be. In a world where the up-and-comers are searching for the right kind of employer, being progressive in your business will make a difference.

The Filene Research Institute is doubling down on this one: Stay tuned for details of our upcoming partnership with Net Impact.

4 �€� Pay

I’ve never filed a W-4 at a credit union myself, so I’m only going on statistically significant hearsay: Credit unions need to pay better.

“Human beings were not meant to sit in little cubicles staring at computer screens all day, filling out useless forms and listening to eight different bosses drone on about about mission statements.” – Office Space

Ben is driver of the Filene Research Institute’s CU Tomorrow project, chairman of the National Directors’ Convention, and a big fan of tweed.

My Bar Camp Bank Dallas Bullets (get it?) [Open Source CU - Home]

charlie@trabian.com — Mon Jun 23 22:29:00 UTC 2008

(HINT: It’s funny because the animals were shot with bullets from guns and I’m talking about bullet points of information.)

But seriously, here are a few of the highlights from my first BarCampBank, BarCampBankDallas. I don’t take copious notes during open discussions; I just jot down the highlights. So, I’ll give you a few bullets that stood out for me and I’d like to get your perspective on some of the ideas, so chime right in.

Two of my favorite concepts of the day.

Credit Report + Character Report

Can FIs ever release their API?

Credit Report + Character Report

Social networks can facilitate understanding a person in context of their friends, family and character. Our credit report coldly calculate our financial dependability outside of the context of our whole life. Let us vouch for each other to fill in the gaps on our credit report and make informed exceptions to the hard numbers. Larry Hooper, beloved entertainer, told us that being an independent musician makes him a leper to the credit report robots. But if you sat down for a chat with any of Larry’s friends, you would quickly get a much different picture of the kind of person he really is, separate from his tax status.

So when can the credit report engines work more like LinkedIn? In fact, why can’t they hook into LinkedIn and view a person’s Recommendations and process that into their credit score?

(As an aside, Larry brought an authentic perspective to the discussions, which makes me think we might all stumble into from deeper insights in future BarCampBank sessions by inviting a few non-industry people.)

Can FIs ever release their API?

This was the ultimate question of Mark McSpadden’s session, “I want to start a nerd FI.” The question was how can a bunch of designers and developers get together and start an FI tailored to our specific needs. (Ex: Photoshop loans, server loans, etc.) Mercifully, there were some people in the room uniquely qualified to answer this question. It was an emotional roller coaster that left us all with one question that, while it is mired in regulations and red tape for now, offers a tiny glimmer of hope for some wild day in the future: Why don’t FIs release their API?

API = Application Programming Interface. When it is released, you can get your mitts in it and make it work for your own purposes, within limitations. Twitter released their API and IconFactory made Twitterrific. That’s one example most of our readers will know well. If a bank released their API, the idea is that groups could come along and hook into it to create an FI of their own. That would be more than just the online banking interface, but the whole bag of what keeps an FI pumping.

We quickly – depressingly – learned from the FI CEOs and General Managers in the room that the romantic days of a few teachers with $20 each and a cookie tin, or a few fire fighters and a lock box under the driver’s seat of Engine #1 are gone. The process of starting a financial institution is eat up with prohibitive regulations.

But, could there ever be a day where an existing financial institution could let people hook into it and meaningfully tailor the infrastructure and product to their own needs? I’d love to continue that brainstorm here for a few more beats. You lot who frequent this blog represent some of the sharpest minds in the biz, so turn those cerebral hounds of yours loose.

I’ll close with what was unanimously declared to be the quote of the day. As we sat around a nice conference table off a main room with enough taxidermied big game animals to make the staff of Bass Pro Shops blush at the excess, one of our young peers pointed up at the pair of stuffy portraits representing two generations of big-game-hunting, be-suited bankers (yes, they are exactly what you are picturing) and said, “We want our own FI because we don’t like dealing with that.”

PS: Go grab a look at the photos from this weekend.

Texas FCU wants to know if you're paying attention [Open Source CU - Home]

hi@itsjustbrent.com — Fri Jun 20 19:43:00 UTC 2008

Call 214-748-9556 and wait until all the options are given in the menu.

To quote Ben Rogers after listening to this, “Who says credit unions aren’t innovative?”

Have a good weekend, everyone.

(High five to George and Kelsey at Filene for passing this along.)

Surviving the Dark Ages of Banking [Gonzobanker]

Fri Jun 20 04:00:00 -0400 2008

Q2 2008 will be remembered as a time when the banking industry’s tenuous optimism about a light recession and mild credit issues turned into the worst environment in 30 years.

Adventures in the Customer Data Mine [Gonzobanker]

Fri Jun 06 04:00:00 -0400 2008

A banker told me some whippersnapper in Marketing said there might be something valuable hidden in the data mine. Can you believe it? he wanted to know. "I wouldn’t be here if I didn’t," I said. "Let’s head on into the mine."

50 Ways to Leave Your Vendor [Gonzobanker]

Fri May 30 04:00:00 -0400 2008

I’m sure Paul Simon would have approved of my lyrics changes had I actually submitted the papers. And you’re damn right, I wrote “Eat Peruvian bark, Mark.” You try finding a rhyming, seven syllable sentence all the way into the fourth chorus…

Dear Croal Dude [Gonzobanker]

Fri May 23 04:00:00 -0400 2008

While trawling the blogosphere, we unexpectedly ran across one of our Gonzo-tribe fulfilling his gossip and advice fetish. Some were not age-appropriate to reprint, and we’re not sure all of it is sound advice, but here is a sampling. Enjoy.

GonzoBanker of the Month: Jennifer Binkley, Altura Credit Union [Gonzobanker]

Fri May 16 04:00:00 -0400 2008

This month, GonzoBanker puts the spotlight on Jennifer Binkley of Auto Expert. Jennifer is an accomplished credit union exec who caught our eye for her “take no prisoners” efforts to raise the bar on marrying successful business operations with outstanding customer service.

The Examiners Are Coming!! [Gonzobanker]

Fri May 09 04:00:00 -0400 2008

Let’s not understate the challenge of a visit from a federal regulator. An exam can rock your world even if you are prepared for it.

The 2008 CIO Curriculum [Gonzobanker]

Fri May 02 04:00:00 -0400 2008

There has never been less time for CIOs to go to seminars and schools to learn about everything new on the technology front. It has also never been more important to do so, and (ironically) it has never been harder.

Retail Virtual Safe Deposit Boxes …
Not So Fast [Gonzobanker]

Fri Apr 25 04:00:00 -0400 2008

Our industry definitely needs to be more innovative, but let’s focus on innovation within banking and leave the document storage business to someone else – at least for now.

GonzoBanker of the Month:
Luke Mansour, Sr.
Synovus Financial Corporation [Gonzobanker]

Fri Apr 18 04:00:00 -0400 2008

This month, we honor Luke Mansour of Synovus Financial Corporation for his commitment to realizing the Gonzo potential of real-time sales reporting to support growth and contribute to a meaningful sales culture.

Is Bigger Better After All …? [Gonzobanker]

Fri Apr 11 04:00:00 -0400 2008

By the numbers, the big banks are kicking tail even in the midst of their worst year in the past decade. But mid-size banks continue to flourish, grow and develop niches in the commercial world big banks can’t touch.