The Bankwatch

This is a fascinating statistic, especially when we see that the income levels of the participants are 50% higher than the average.

Net Banks Gain One in Five Internet Households - 02.01.2008 - Bank Technology News Article

The survey of 1,032 Internet households found the average age of an direct-banking user is 47.8, with an average income of $99,200 a year – compared to the average online banking user who is 52.1 and earns $60,300 annually

 Just prior to the recent NetFinance conference I was lucky enough to be asked by Dan at eStara to answer a few questions, which were posted on their blog.  Its been a couple of weeks now, and thought I would place them here too. 

Meantime please check out eStara and their blog.  They do a good job at covering many aspects of multichannel development, and not getting caught up in promoting their own products, which incidentally are good, as I can attest from personal experience. 

Anyhow here is the email interview we did, and I relate this to my earlier post on Bank of the Future.

This week, hundreds of financial services executives from all over the world will gather in Phoenix for the 6th Annual Net.Finance Conference to discuss issues pertaining to the marketing and sale of financial products and services. One of the speakers at this year’s event will be Colin Henderson of The Bank Watch blog. Colin, who was formerly director of channel optimization at Bank of Montreal, will be presenting at this year’s conference on Web 2.0, and how banks can incorporate new media and technology to enhance their customer interactions. Recently, we asked Colin a few questions about what banks will be like in the future:

eStara: In your blog, The Bank Watch, you state that the channel efforts of banks ought to be focused on Internet, and then levered across other channels. Explain why you feel this way, and how banks are handling this transition to the Web lifestyle?

CH: This is way to start thinking about things differently, to catch up with customers, yet still maintain old loyalties. Listen, I know that Banking is all about risk aversion. Its about keeping multiple stakeholders happy, both inside and outside the Bank. Generational change is not new, but the rapid rise of internet, means this generational shift that we are going through is new. Telephones took 38 years to reach 10 million mass market customers, cable TV 25 years … www took less than 5. When we overlay that pace of change with GenX/Y/M folks you have an instantly trained generation. That’s a first. Their expectations are not like previous generations (including me). So we have to learn from them, listen to them and be ready for them. By 2011, the net generation will comprise 50% of the working population – that’s only 2 years away in planning/implementation, and execution time.

So, back to the question … by building for internet now, and adapting as required for others, we are aligning the organization for customer expectations.

eStara: How do you feel banks are integrating the online customer experience with their call centers and branches?

CH: With Call centres, I think pretty well. Most are still wrestling with organisation, do you put email people with telephone people, with click to talk people etc, but that’s a healthy discussion. Branches are different .. they are generally still in 1985. Part of this is regulation, and concerns for privacy and confidentiality. The irony is that customers and branch staff are corresponding about banking using email, whether its allowed by Bank rules or not.

eStara: From a customer service and support perspective, how do you think the banks of the future will meet the needs of consumers?

CH: I will take that as ’should’ meet the needs, because frankly some will and some won’t and will suffer accordingly. Broadly, banks’ will do a better job at being there all the time, as required for their customers. I recall once, an old visionary Banker talking about the ideal future Bank. He said its like a genie in a bottle, your own personal genie. Banking is boring and being in the bottle most of the time is just fine. But at that moment, in a shop, purchasing online, after a phone call - whatever the catalyst, if you need your Bank, you need them right now. It goes from not even on your mind, to instant need. So the good banks will be there, via wireless, online, phone to a certain extent, to provide an answer. Some say this is too expensive, but to me that’s an execution issue.

eStara: You’ve worked in banking in the U.K., Canada and the U.S. Are there any unique challenges in each country? What are some of the shared challenges?

CH: North America is very conservative, conventional. I attended a conference in Geneva in February, and I have to say the interest level in new ways of doing things, including particularly financial services is very high. Its a space I am watching closely.

As a final note, I wanted to mention Web 2.0 and blogs, and before everyone’s eyes glaze over - there are new opportunities there now for Banks to experiment, at low cost, with alternative methods of engaging customers, and consumers. The immediate reaction is often, “It’s too high risk and what about our brand image?”

But that train has left the station … people are already talking about your Bank online. If you do a Google blog search on your Bank, its remarkable … I did one just as I was typing this, and took something at random, on page 10 of the search. It was ‘Dave’ writing about the families of deceased soldiers in Afghanistan losing life insurance, because a war clause invalidated mortgage insurance:

Here is a snippet (Feb 2007):

…she was initially told she would likely not be able to collect on her mortgage insurance because of a war exclusion clause.

She pursued the issue with officials at the Bank XYZ, who issued the policy near her home at New Brunswick’s Canadian Forces Base Gagetown, and was told they’d look into it.

While awaiting an answer, Customer, who has two children under the age of 15, was forced to continue paying her mortgage. Four months later, she says the bank revealed it had no such exclusion clause and would begin payments.

My point is not the specifics here, horrific as they are. The point is that these discussions are occurring online. There were three comments on that blog post, but none from the Bank in question … what a fantastic opportunity, to right a wrong … missed, gone forever. That customer could have been the most loyal customer advocate for that Bank…now how many people will she tell the opposite? Meantime the customer communications group believe that the televised story earlier that week, is over, and phew!, we managed our way through that will minimal press

Source: Thought Leader Q&A: Colin Henderson, The Bank Watch, on The Bank of the Future - Multichannel Musings - Insight into the world of cross-channel sales and marketing

Here are the stats for the last 30 days ranked by page views for individual posts.  These stats are based on clicks to an individual post.  It won’t count those who read something on the main page.  So its directional only.

Wesabe is the clear winner by several lengths.  Other observations:

• future oriented works for most
• Second Life/ virtual is popular - something new and original
• Banks without branches intrigues

2007-02-15 to Today 

Title                                                                                                Views

Wesabe leads the way in all financial services  235 

How to web 2.0 your bank  163 

Banks in Second Life - worth a look  105 

Cashedge OAO is the tool of choice for h  85 

Web 2.0 companies, versus poor old Banks  79 

“Techcrunch » Blog Archive &r  70 

Hostile takeover attempt in Credit Union  63 

Online only Banks (branchless Banks)  59 

Building the Bank of the future: you can  56 

ING introduces OurVirtualHolland within     55 

Wesabe - brief review of their ‘goals’ a  53 

Wells Fargo enters MySpace  50 

DirectHuntington - but opportunity to ex  46 

Conchango suggests brand damage is Bank’  43 

The end of the cash era | Economist.com  41 

Rethink from Unspace  36 

Bankwatch predictions - Banking 2007  34 

How much does it cost to build the best   33 

Credit Cards are not customer focussed  25 

QR codes - we have lots to learn  22 

Banks’ brands fail against Landor breaka  22 

Prosper Membership Leaps to 200,000 and   21 

Finextra: Lloyds TSB launches debit card  19 

Saxo Bank enters Second Life  19 

Evolution of the web out to 2029  17 

Its still pretty basic stuff but after following Reuters into SL today, I rooted around and found some Bank stuff.  I couldn’t find Wells who are supposed to be there, but I’d blame my SL search capability for that.

The Reuters site was cool.  IBM have a basic careers location, that links out to their web site.

I’ll follow this and post more.

 TNS have been consistently measuring since 1994.  While their numbers always look low to me, they are relevant for trend watching.

60% of Canadians online, have signed up for online banking, and 37% use online banking in the past month.  53% visited a branch, and that’s the lowest number ever as the trend goes down.

The traditional bank branch continues to lose ground in Canada as consumers conduct more day-to-day transactions at self-service banking machines (ABMs) and over the Internet, according to an annual tracking study by TNS Canadian Facts, a Toronto-based marketing research firm.

Source: Finextra: Canadian bank branches losing ground to online channels

But they make the final point about preferences that I believe is too general, and doesn’t reflect all segments.  In addition, I believe this last point is as much the failure of Banks to properly implement online services in a trusted and meaningful way that would exceed the Branch experience.

“Canadians continue to prefer to go their branch to make RSP contributions and to acquire financial products, such as new accounts and mortgages, than to do so by phone or online,” she states.

Thanks to Michal for this list.  Aprt form the high level of activity the one htat leapt out at me, is the Auto manufacturs Banks.  VW is here, and Toyota Bank coming soon!  Has anyone else heard about those?

1. mBank - the first one virtual bank in Poland (XI 2000), www.mbank.com.pl, 1,26 million customers - it has about 50 multimedia kiosks (You can leave your documents; use ATM; etc) http://www.mbank.com.pl/eng/ - in english. It is going to be a Mobile virtual network operator soon!
2. Inteligo the second largest online bank. www.inteligo.pl         Demo: www.inteligo.pl/infosite/demo/index.html
3. VW Bank direct - www.vwbankdirect.pl - a very small online bank
4. There will probably be the next, fourth player - Toyota Bank online
   (the first-ever Toyota online bank!)

Polish online banking market is very large now. Every bank has two-
factor authentication (tokens, SMS, transactional access numbers (TAN))

Again, please note I have linked to the branchless bank list in the sidebar, under Bank of the Future.