Addressing pain points for consumers is always a great way to launch a successful business and the new BankSwitcher is doing just that. BankSwitcher analyzes consumers’ checking accounts for direct deposits, automatic payments and the like to determine what exactly needs to be switched by using Wesabe’s newish free API. After determining all of the automatic transactions, BankSwitcher (I’d normally use an acronym here, but…) uses their database of research to determine exactly what forms are needed and/or steps taken to switch.
This particular topic has always been a "hot one" because so many great discussion points come up. It’d be nice if bank accounts had number portability like cell phones do, but that would be a massive up hill battle that would have to come from some type of additional governmental regulation. The current ACH system has many limitations and really is not meant to support real-time online transactions. Maybe at some point in the future, we’ll have a real switch button, but until then, making the paper form process easy will win out.
Many FI’s will see this, and the possibility of a real-time "switch button" or account number portability, a threat. I believe that threat will prevent most FI’s from pursuing any type of account number portability without some type of government intervention. What many FI’s should also consider though is the goodwill that can be found by offering your members (or customers) an easy way out. As CU’s we are really here to do one thing: help our members, regardless of if the are opening a money market account or closing their membership.
News from Wesabe
Coverage from Colin
FIS, or Fidelity Information Services, had an employee steal confidential consumer information and sell it. FIS has their official press release here.
What would happen if a CU employee decided that their member data was worth something and sold it? How would or should a CU react in this instance? FIS’ press release reads like it came from marketing, went to legal, and then back again. Should CU’s issue press releases on their web sites, in their monthly newsletter(s), in a blog, or all of the above? Are blogs appropriate avenues to communicate this type of sensitive information with your membership?
The Financial Times published an article today, “Wal-mart to open 1,000 Money Centers“, providing some details into the major retail chains entry into the financial services market. Although WalMart dropped their ILC plans in March 2007, they’ve decided to utilize pre-paid money cards to get into their customers wallets. WalMart will bring a new level of competition to the marketplace for the under-served. Their in-store “branches’ will be open 7am to 9pm 7 days a week. Show me a CU or a bank that has those hours… In addition, they plan to partner with other large financial service companies to distribute their products to the WalMart consumer.
“Instead, it is working to expand its products with financial partners, including GE Money, which is issuing the pre-paid card, and ShareBuilder, which is testing online new share and money market savings accounts that can be linked to the prepaid card.”
Whether good or bad, WalMart will be here for a quite a while and their MoneyCenters may cause some major changes in the financial industry.
In the wake of the Priority One mistake (here and here) it looks like Jax Federal Credit Union had a little mistake as well. It seems that they had a little problem with their printing vendor and the transmission of statements on their site wasn’t encrypted. Google managed to index all of the sensitive info in the process. Here’s the press coverage.
Unfortunately for Priority One CU, they managed to print the account number and the social security number on the election ballot envelope of Steve Bass, a blogger for PC World, as well as the rest of their membership. Here’s Steve’s article (on PC World).
Priority One has an opportunity here.The phrase making lemonade out of lemons comes to mind. The CEO, actually probably marketing, sent letters to the membership informing them of the security breach and they have a notice on their site. They’ve also given everyone free credit report monitoring for a year, which all seems to be becoming a standard response.. If I was Charles R. Wiggington, Sr., their CEO, I’d personally call Steve and ask him to help start a blog for the CU so they could better communicate with their membership. They might have a chance to turn one of their unhappy members with a wide audience into one of their biggest proponents. And maybe redesign the website while they’re at it.
The US House Financial Services Committee introduced a bill today that will ban commercial companies from owning a bank. Specifically, it bans them from owning an industrial loan company. The bill was co-sponsored by both the top Democrat and Republican in the committee.
It’ll be interesting to see how this one pans out. Wal-Mart shoppers have a "common bond", don’t they?
Polly LaBarre, co-author of Mavericks at Work, was interviewed by Guy Kawasaki over at FutureLab.
Polly LaBarre and Bill Taylor (co-founder of Fast Company) wrote the book and the interview can be found here.
Read the book!!!
“Backed up by a locally focused marketing strategy, the company’s approach has been ratified by the market. ING DIRECT’s deposits grew by 39 percent in 2005, 78 percent in 2004, and 74 percent in 2003. Indeed, among a 100-institution peer group, ING DIRECT had the second-highest rate of deposit growth for the five years between 2000 and 2005. ”
Click here for the source article from American Banker/SourceMedia.
If you’re a little cold in the office, click here. It’ll get your blood boiling.