All articles by Charles Davis
Charles Davis
US Bancorp talks CSR strategy
US Bancorp has won the honours of Best CSR Initiative in the 2012 Retail Banker International Awards. Charles Davis speaks to Jody Bhagat, senior vice president, internet and mobile channel group and Lisa Glover, executive vice president of community affairs at US Bancorp, about what makes the lender worthy of the award. US Bancorps commitment to corporate social responsibility so permeates the institution that it even finds its way to product development conversations. When the banks online team was thinking about ways to familiarise customers with its online bill payment product, the banks work with community organisations leapt to mind, said Jody Bhagat, senior vice president, internet and mobile channel group.
US banks pushing low-cost e-banking behaviour
While most banks in the US are eliminating free current accounts and rewards schemes to cope with the changing regulatory environment, several lenders are introducing or tweaking current account products to encourage lower-cost e-banking behaviour among customers. Charles Davis scopes out products that lenders have launched to give remote banking a push. As US banks scramble to make up lost income as a result of the new regulatory landscape, a few institutions are moving in the opposite direction, holding fast to free current accounts, while tweaking their product sets to encourage remote banking. Most large US banks either added or increased the fees on current accounts in an effort to compensate for revenue they have lost from regulations on overdrafts and debit card interchange fees.
Wells Fargo mapping a strong online journey
Well Fargo is marching ahead with online initiatives and its mobile adoption rates are fast increasing. Also increasing is its portfolio of Personal Financial Management tools. Imran Haider, head of the Money Movement area in Wells Fargos Internet Services Group, tells Charles Davis how PFM is critical to the lenders overall online strategy. With 3.2bn customer sessions a year, Wells Fargos online channel offers a rich source of engagement for a bank whose mobile adoption rates are increasing at twice the rate its customers moved online a few years ago. Wells Fargo views online personal financial management as a powerful onramp for its multifaceted mobile banking suite, and has created a variety of tools for different sorts of customers. For the data-obsessed do-it-yourself crowd, the bank has an app that leverages Quicken for a wide range of spreadsheets and reports, all customizable and tied to the bill pay and cards operations.
BMO’s M&I deal ahead of schedule
Bank of Montreal has almost completed the integration of key US acquisition Marshall & Ilsley. BMO President and CEO, William Downe, talks about the cost savings arising from merging M&I with existing subsidiary Harris Bank, and sets out an upbeat vision for its enlarged America-based unit. As Bank of Montreal (BMO) puts the finishing touches on its acquisition of its marquee US property, Marshall & Ilsley, the bank finds the savings from the deal larger than originally expected and the integration ahead of schedule. BMO President and CEO William Downe highlights the banks annual shareholder meeting with the good news that the cost savings from the $4bn deal to merge M&I with Harris Bank, the Chicago bank that it acquired in 1984, are some $50m better than originally forecast. The emergent 688-branch US arm of BMO, renamed as BMO Harris NA, is on track to deliver an eventual $1bn in annual profits, he says, bolstered by an ideal position in the growing Midwest retail banking market.
SmarterBank’s multi-dimentional take on student-lending in the US
As large US banks pull out of the student lending market, SmarterBank, non-bank financial services subsidiary of SimpleTuition, is pitching itself as a way for students to save on college expenses. CEO of SimpleTuition, Kevin Walker, tells Charles Davis how SmarterBank is a solution that combines debt management, rewards and financial services products for an otherwise one dimensional student financing business. As a couple of the largest names in the US student lending market exit the business, an online startup aims to fill the void with a current account product that pays rewards that go toward reducing their debt when they use their debit cards and helps them manage their educational debt. SmarterBank, a non-bank financial services subsidiary of SimpleTuition, a student loan service company, pitches itself as a way for students and their families to save on the expense of college. It has no bank charter, but offers financial services products through a relationship with Bancorp Bank, a provider of bank products to online sites. College graduates, current students or their parents can apply online for a SmarterBank checking account, and link it to a designated student loan. When account holders use their debit cards to make a purchase, they accrue cash rewards called SmarterBucks.
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Regions’ Now Banking suite reaches out
Regions Financial began creating a suite of alternative payments products, Now Banking, primarily targeting the unbanked segment but discovered customers across all demographics using it. Regions spokesperson Mel Campbell tells Charles Davis about how and why Regions has expanded the Now Banking platform throughout its entire retail footprint. When Regions Financial began creating a suite of alternative payments products, it might have been easy to assume that is was to serve the unbanked customers in its retail market. A funny thing happened along the way: the bank began developing its Now Banking package of expedited bill pay, reloadable debit cards and check cashing services, only to discover that customers in all demographic segments, and not just unbanked customers, began using the products. Mel Campbell, a Regions spokesperson, says, We have seen three distinct customer segments emerge for Now Banking. A third make $25,000 or less, a third up to $75,000 a year, and a third $75,000 and above, so we have people at all demographic points using Now Banking. There are people that have just gotten really serious about eschewing debt and paying on a cash basis, and these products are becoming a part of their overall financial management picture.
Analyse and reward customer loyalty
Cardlytics has created a merchant-funded offers engine that uses a bank customers shopping transaction data to tailor instant coupons and deals that appear in the online banking statement. Lynne Laube, president and co-founder of Cardlytics, tells Charles Davis about its plans. The relationship between US banks and the merchants they serve has reached the point of near-total acrimony, with retailers protesting the fee structure undergirding the relationship while banks feel as though their efforts to handle an increasingly complex mix of payments gets short shrift. Atlanta-based Cardlytics thinks it might have developed a way to cool the rhetoric a bit by creating a merchant-funded offers engine that uses the bank customers shopping transaction data to tailor instant coupons that appear in the online banking statement. If the customer clicks on a deal, it is then triggered when they shop with the banks credit or debit card at the merchant that provided the offer. The consumer gets verification the next day that the offer has been redeemed, and the discount is applied as a credit to the consumer’s account at the end of the month. Merchants pay only if the transaction is completed.
The Kasasa way for community banks
BancVues national branded co-operative product Kasasa, designed to level the playing field with megabanks in the US, is showing growth in its network strength. BancVue CEO Gabe Kraicek talks to Charles Davis about how Kasasa is changing the nature of competition among community banks. Three years ago, BancVue, a financial services marketing and product development firm focused on community banks, began touting its most ambitious rollout ever: Kasasa, a national branded co-operative designed to help level the playing field with the megabanks. Gabe Kraicek, CEO of BancVue, said that if he has learned anything its that launching a national brand is a lot harder than he thought. We thought wed just convince people based on our data and the experience our partners have had, and that people would just be signing up in droves, and it took two years to really turn the corner, Kraicek said. We got a lot of great ideacall us when you are national.'” Now, however, an increasing number of BancVues more than 600 financial institution clients are adopting the product. Kasasa now boasts of 130 financial institutions in 38 states, and Kraicek said that his earlier goal of 200 now sounds like a layup.
BofA’s Merrill Edge Select Portfolios
In an attempt to provide active investment management for emerging affluent investors, Bank of Americahas launched Merrill Edge Select Portfolios for customers at the middle market. Managing director and the Merrill Edge product executive at BofA, Tom Halloran, speaks to Charles Davis about the latest offering. Seeking to capitalise on its massive retail consumer base, Bank of America (BofA) is driving its investment advising platform ever further into the middle market. Its newest offering – called Merrill Edge Select Portfolios is aimed at providing customers with as little as $20,000 in investable assets with access to actively managed, diversified portfolio management. Tom Halloran, managing director, and Merrill Edge Product Executive at Bank of America, said that Merrill Edge represents the banks latest attempt to provide active investment management at the middle class and the emerging affluent investor. Halloran said that BofAs 57m consumer and small business customers offer a base of about 8m customers that fall right into the segment of emerging affluents.
Green Dot readies checking account
Prepaid giant Green Dot is all set to transform itself into a fully-fledged bank following its acquisition of Bonneville Bank Plans are already advanced for it to roll out its first checking account and debit card as Green Dot ramps up its challenge to traditional main street banks