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Online Retail Banking Services 2008 – Wrap up from the Chair, day 1

I have been invited to be the Chairman of the Online Retail Banking Services 2008 conference in New York.

ConfnycPlease find below some of the key highlights of day 1 and my comments.

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9:06am – 9:50am
Transforming a Customer Service Product into a Strategic Revenue-Generating Tool
By Virginia Sullivan , Senior Vice President, Internet Banking at E-Loan

Virginia was the first speaker of the conference, and we started at 9am on Monday. It was a real challenge, but she was perfect!

Virginia shared with us her experience of setting up the online banking service of E-Loan back in early 2006. E-Loan.com was funded by Chris Larsen (also founder of Prosper.com, the leading peer-to-peer lending website).

Virginia emphasized the power of track back online, the power of being able to tie back to an ROI.
I totally agree, the internet changed the marketeers life. But first you need to have the right tags in place, to then be able to produce valuable insights with the available MIs!

To support their launch, they invested in an extensive PR campaign. Search didn’t really work; their offer being price led, most of their leads came frombankrate.

Virginia talked about how difficult it is to target a customer online. The prospects who were having difficulties on the phone were advised by the E-Loan team to consider opting for a more traditionnal account.

Excellent practice: we all want to grow our customer base, but we need to focus on the right customers. Moreover, there is no need to drive more traffic to your website if your conversion rates are poor. Think customer  experience, customer journey. Improve your application processes.
I quote Virginia: “Know your strengths!”

A few achievements:
* It took them only 8 months – from concept to launch (Feb-Oct 06) – to launch their online banking service.
* After 7 weeks they had 1.27 billion dollars in balances and 28,777 accounts.

In comparison, for most banks – due to their legacy systems – it would probably takes a few months just to make minor changes to their internet banking service.

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9:48am – 10:29am
Motivating Online Marketing & Online Customer Experience Departments to Collaborate and Make the Online Channel a Key Point of Sales
By Michael Neil, Vice President, Online Strategy at Merrill Lynch Global Wealth Management

I was keen to meet Michael who was one of the key speakers at the industry leading event Net.Finance both in 2007 and 2008.

Michael sees cross-selling as a high quality customer relationship management tool.

One of Michael’s first slide was entitled “customer experience = customer advocacy”. He was the first presenter to talk about Amazon.com and how good they are in customer advocacy.

I enjoyed his example of cross-selling, far from the banking world: Disney Princess (promoting their show on broadway), The Wiggles game, or Sesame Street (promoting their attraction park in the Carrabean).

Do you have a level of products you tried to achieve from the start or at the end? “Wells Fargo famous for their 5 products.”

It is critical to pull the team you need from day one.
You need the right people, from both divisionnal level and group level, you need champions in the room.
This is our first main challenge: we need committed people, and we don’t want to have to deal with too much inertia.

Then Michael insisted on the importance of collecting data.
Make sure you have the proper data to measure! Look for more than just the usual online metrics: internal search, single access ratio (bounce rate), segmented conversion rate.
You must know what you can and what you can’t measure. It is important to be able to manage expectations from the management.

Some best practices
* Involve your team in call centers: they must feel they are a part of the process.
* Create a campaign intranet site: let the entire company knwo what you are doing. They may even want to take part.
* Manage expectations: determine upfront what is measured and let people know (senior management).

Lessons learned: leverage the “Thank you” and “logout” pages.

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10:30am – 11:00am
Networking break
I believed one of my key responsibilities as Chairman was to urge people to make the most of the fantastic opportunity for networking. I advised everybody to stay connected on Linkedin.

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11:06am – 11:51am
Determining Who Are Your Online Banking Customers and How to Earn their Loyalty
By Robin Nakamura, SVP, eBusiness at First National Bank

It was great to catch up with the excellent Robin Nakamura. I met Robin for the first time in March 2007 at the online_banking_summit_2007conference where we were both speaking.
Both times, her presentations were best-of-the-show. Congratulations Robin!

Robin is an advocate for customer experience excellence, transparency, and customer advocacy.

She too started her presentation with Amazon: people trust the company, they are happy to pay more and recommend the service. It is an excellent example of customer loyalty and advocacy.

It is important to build the loyalty. Online banking in mainstream now, but the cutomer behaviour has changed dramatically over the last 10 years.

Robin insisted on a new customer segment, the “Remote Transactors”. The RT don’t trust financial institutions anymore. They are 42-48 years old, and they earn more than $100k.
By 2010, RT will represent nearly half of the US households.

The Retail Online Banking Customers have an average of 5.3 services per houselhold vs 2.6 per household for Retail customers not registered to their online banking service.

First National Bank measure customer satisfaction twice a year, to grow the awareness.

Even though FNBO Direct is a pure online bank, they offer an ATM card to their clients and 41% of users are using it. It costs a lot of money to the bank, but Robin wanted to provide the whole range of services to their clients.

One of the future products you might found on FNBO Direct are “market linked CDs”.

The importance of Social Media
It is critical to help the voice of the customer to be heard. Social feedback is a good way to Wow your customers. People pay attention to recommendations from “similar people”.

BoacustomerreviewsThe Bank of America customer reviews is a great example of user generated content in Internet Banking. Their customers can review their financial products in Internet Banking, and everybody can access the reviews on the public website.

It is an efficient way to cross-sell additional products and services.

Fnbopayyourselffirst_2The “Pay Yourself First!” challenge on YouTube
FNBO recently launched a YouTube contest. I invite you to have a look and upload your videos by July 31.

It is not likely to become a great acquisition tool, but Robin’s goal is to make a statement: she wants to show they get it, they have a soul, a personality.

The next step of this social media campaign is to follow a few people for the next 6 months and see how successful they are at saving money and what their key challenges are.

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11:53am – 12:35pm
Using the Online Environment  to Move Funds Seamlessly Between Different Banks
By Jeremy Sokolic, Vice President, Marketing at CashEdge

Jeremy shared CashEdge’s vision on Online Money Movement and the opportunity with the 3 kinds of payments today:
* Me-to-Me: 2 accounts owned by the same person
* Trusted 3rd party
* Casual payments

Jeremy used Citi, BoA as examples.
The 4 pillars of funds transfer are  Technology / Payment Operations / Risk Management / Compliance.

CashEdge believe that the third party and casual payments are the next phase of product solutions. They see the small businesses market as a major driver, they are ready to pay for better speed of delivery of the funds.

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2:04pm – 2:50pm
Acquiring New Accounts Online with Strategic Technics
By Amy Fadeley, Application Development Manager at AmTrust Bank

First of all, let me tell Amy again how sorry I am for the Cavaliers: even though James LeBron scored 45 points during the last game of the series, they lost against the Boston Celtics.

AmTrust Bank launched their online banking service in early 2006.
They started out just in the CD market to get the management buying. With a new brand, use product strategy as learning opportunity: certificate of Deposit.

In October 06, they launched Amtrust Direct E-Money Market. A year later, they launched their e-Savings account.

Lesson learned: benchmark your brand. Establish primary DIRECT and not standard competitors, and benchmark your brand in a rate / feature matrix.

Optrimizing the Online Account Opening Process: initially, their process had 8 steps. Amy talked about “the lawyer’s dream”: the T&Cs were on the first page. There was no commitment on the first three steps… They sent prospects away straight away.

Then they improved their account opening process: 4 steps only (last step: E-Sign consent and legal disclosure)

A good piece of advice: review every step of the account opening process, not just the online pieces: email confirmation, funding, onboarding processes, online banking enrollment…

Virginia asked if they had a save option during the application process. They don’t. They believe it would create some complexity as at this stage prospects are still not registered members.

I have asked Amy how much external communication they did around their improved application process. She believed they haven’t made any announcement to their clients and prospects.
I strongly believe, it is an excellent opportunity to communicate with your market, and show you listen to them. Again, customer experience excellence.

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2:37pm – 3:15pm
Finding the Tangibles and Intangibles of Internet Banking Services
By Scott Hurlbert, Director, Online Services at Peoples Bank

Peoples Bank have 7 independent brands, but same look and feel online. just the branding is different.

Scott insisted on the importance of using data driven decision making.
Manage customers unsollicited feedback (Jupiter research, November 2007)

How to get commitment from executives: “we know that we are behind, and our customers want it”.
* Compare website with direct competitors – big & small.
* Use scale rankings: 1 We don’t have it / 3 we have a workaround / 9 we have it fully implemented.

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3:45pm – 4:30pm
Fighting Cyber Crime
By Richard Harp, Senior Vice President Director of Corporate Security, Corporate Security Division at Huntington Bank

Richard had the last slot of the first day. And what a busy day. So it was a tough slot. Richard did great: he was very entertaining and he demonstrated his 16 years experience in fighting crime.

The role of corporate security role is mainly around physical security and protection of assets. Richard was also in charge of the AML program.

Combat online fraud: today’s challenge is that it is hard to find out who the fraudsters are.

Types online financial crimes: Phishing, Spoofing, Cyber attacks, Counterfeiting, Hackers, ACH Fraud, Identity Theft.

I am proud to announce that Richard honored me at the conference: he gave me a star, a star that Huntington employees have to earn. I am “officially” a marshall now, a “fraud buster”! 😉
Thanks Richard.

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