$250 billion in 2006
$600 billion in 2010
To put the numbers in perspective, the 2006 estimate is approximately four times the total deposits of the two biggest direct banks, ING Direct and E*Trade. And it's about 4% of the total U.S. deposit market of $6 trillion.
Assuming Citibank is right and the online savings market grows at a compounded rate of 25% per year, it will represent 10% of today's total deposits or 8.5% of the total $7 trillion in total deposits 2010, assuming a 3% annual growth rate.
The article also said that HSBC Direct is on track to have 250,000 accounts by the end of this year.
Googling "online savings accounts" from a Seattle IP address today found Citibank in the number seven position. Here were the top advertisers (see inset above for closeup):
1. HSBC Direct
2. Emigrant Direct
3. Capital One
4. American Express
5. E*Trade
6. Alaska USA Credit Union (Seattle local ad)
7. Citibank Direct
--JB
Notes from BAI's SmartTactics Conference
By Jim Bruene on April 24, 2006 7:40 PM | 0 Comments
Several interesting tidbits surfaced from today's presentations at BAI's SmartTactics conference in Las Vegas:
Citibank online account acquisition
In 2002, 6% of Citibank's new checking accounts were generated online; in 2005, the number was 20%.
Our comments: Keep in mind that Citi's experience is unique. It has a huge brand and relatively small branch network, so many of its new accounts have no choice but to open online, or over the phone. And part of the growth can be attributed to non-checking products, such as its high-yield savings, that REQUIRE a companion checking account.
Bank of America's SiteKey rollout
The rollout of mandatory two-factor authentication is complete, except in Oregon and Washington where it is expected to go live in June. Prior to becoming mandatory, users had a period of time where it was an optional feature; however, only 8% opted in during this phase. When the PassMark-powered system became mandatory, users were served notice during their first two logins that they needed to sign up before it became required on the third login. Only 4% signed up during the first two warnings, and 96% put it off until the third try.
Note: PassMark was acquired by RSA Security today.
Our comments: Taken together, only 12% of users opted for stronger security before it was required, far below the 60% or so that say they want more security in consumer-research studies.
Zions remote deposit-capture results
Zions Bank has grown its remote-deposit client base from 364 in January 2005 to 3,697 in January 2006, and they are adding nearly 100 clients per week. The bank has bagged more than $200 million in incremental deposits and has increased loans and fee income. The Utah bank is now looking for new business worldwide with clients in 49 states and five countries outside the United States. It has clients of all sizes, from the Fortune 500 to small businesses that use it for just one check per month.
Our comments: If you needed ammunition to move this up the priority list, keep your eye on Zions: It said that its main problem now is just keeping up with the all the requests.
Research results from Yahoo Search Marketing
A Forrester study of all U.S. banking customers (not just online bankers), commissioned by Yahoo and OgilvyOne Worldwide, found that 61% of all banking-product research is being done online vs. 5% via phone and 30% in branch. Similarly, 64% of account monitoring is now down online vs. 16% via phone and 13% in-branch. But account opening at branches still dominates at 84% of new account openings, compared to 14% online and 2% via phone.
Yahoo also said they expect 50 million online credit card applications in the United States this year.
Our comments: Wow, time to pull out all the stops in your online account-opening initiatives.
Citibank's 4.5% Direct Banking Savings Account
By Jim Bruene on March 29, 2006 4:37 PM | 0 Comments
In more direct banking news,* Citibank landed all over the media with the launch of a 4.5% no-minimum-balance savings account. A Citi checking account is required to qualify. The reason for the media attention had nothing to do with the rate, and everything to do with the channel conflict inherent in the offer.
The first line of fine print under the offer was (click on screenshot below for closeup; click on "Continue reading..." below for the full text of the mousetype):
This offer is not available at Citibank financial centers
Many stories contained an inaccurate observation that Citibank was launching an entirely new Internet bank. This inaccuracy seems to have its roots in the Reuters wire piece that first discussed the savings account offer.
The truth: This is NOT a new bank. It's NOT a new website. It's NOT even a strategic shift for Citi, which has previously made high-rate deposit offers to online customers (see OBR 120/121). This is simply a new advertising campaign targeted to online users, especially those frequenting Yahoo's homepage (click on inset to see the ad positioning).
Any of Citi's existing 2.5 million online banking customers can open the account by logging in to online banking and selecting "open an account" and following the directions. A small link in the lower right of the landing page directs existing Citi customers to these instructions.
Initial funding can be made by mail, credit card, debit card, or ACH (electronic interbank funds transfer). After the account is open, additional deposits can be made at Citi ATMs or through IN-BRANCH deposits.
Analysis
You've seen high-rate savings account offers before. There is little new here. What can you really say about a savings account once you deal with the rate and the balance requirement?
What sets Citibank apart in this instance is its near-perfect sign-up form (click on inset right). The page is dominated by a banner promising that it will "take 10 minutes & 4 simple steps." The bank backs that up by showing the four steps immediately below the banner.
- Tell us about yourself
- Confirm your identity
- Fund your account
- Provide your E-Signature
Although these steps are the same as what thousands of banks have done for years, Citi's language is exceptional in its clarity and how it addresses consumer fears. The "confirm your identity" demonstrates the bank's commitment to stopping fraud. The "provide your e-signature" lets customers know they won't have to mail some old-fashioned signature card to the bank before they can start enjoying the new rate.
The bank also uses several other devices to ensure that customers feel confident about acting on this offer:
- "We care about your privacy and security" box with link for more info (upper left)
- VeriSign clickable logo (left)
- Ability to save and complete the application later (upper left)
- Ability to print a blank application to mail in (upper left)
- Link to account details and fees (upper right)
- Link to live chat or toll-free number (right)
But we called this "near-perfect" for a reason.
There are several concerns not addressed on this page:
- Timing: How long will it take before my initial deposit starts earning 4.5%?
- Guarantee: Even though they address the need to confirm your identity, the bank doesn't come right out and guarantee the safety of the process.
- No reinforcement of account benefits: Although it's been only a few moments since the customer navigated to this page, don't let them lose sight of why they should go through the uncomfortable process of typing their personal details into a browser that may or may not be transmitting their keystrokes to Uruguay. Keep that 4.5% number right in their face.
Another weakness: navigation overload. Citi has included its full My Citi personal navigation across the top along with all the site utilities in the upper right. While this is helpful for research purposes, it tends to be distracting and will pull customers away from the savings account application.
Final Grade
Despite a few minor weaknesses, it's impressive work. Definitely scores an A and is closing in on A+.
Web address for offer: http://direct.citibank.com/CBOL/06/esavings/default.htm?
*We've started a new Direct Banking category for Financial Marketing Week, so you can easily find all the articles on the topic with a single click.
Continue reading "Citibank's 4.5% Direct Banking Savings Account" »
Citibank using Google to Pitch Credit Monitoring
By Jim Bruene on February 20, 2006 1:36 PM | 0 Comments
Since the dawn of the online credit bureau era (1997/1998), online credit report marketing has been dominated by the specialists: Experian, Equifax, TransUnion, ConsumerInfo.com (now owned by Experian), Fair Isaac, Intersections, and others.
Now, financial institutions are becoming more involved. For example, Citibank's AdWords spot pitching its Credit Monitoring Service showed up fourth overall (and second in the right-hand column) in a search today for "credit report monitoring" on Google (click on inset right for a closer view). With 84 advertisers vying for space on the first page or two of results, that's expensive real estate.
Citi's $9.95/mo service (after one free month) is powered by Intersections <intersections.com> and includes info from all three credit bureaus, daily alerts based on Equifax info, $20,000 in identity theft insurance, and other benefits (see screenshot below for a full listing).
Another surprise advertiser in the category is Wal-Mart whose ad appears in the sixth position along the right side of the search results (see inset above). The retail giant's $7.46/mo service is co-branded with TransUnion's TrueCredit (click here for screenshot).
Analysis
We are big fans of credit report monitoring, having personally used it for more than a decade. And while the service does deliver significant value, we think the single $9.95/mo price point is too high for the mass market. Granted, ten bucks is better than the $14.95/mo charged by TransUnion's TrueCredit for a similar service (see inset for an email received today). But the $120/yr is simply too much for information that can be extracted relatively easily by consumers themselves.
Better would be a multi-tiered offering: Regular/Gold/Platinum that starts at under $5/mo and peaks at $9.95/mo for an individual, $14.95/mo for a family. That way, more customers would receive the benefits of proactive monitoring while the truly paranoid could use the pricier options for added peace of mind. 
Another puzzling aspect of Citi's service: it's impossible to find it through the home page. It not only lacks its own link in the product menus, but also comes up blank in searching on "credit report monitoring" or even "credit reports." You shouldn't have to use Google to find such an important service, especially at a bank that's spent tens of millions promoting itself as a safe haven against identity theft.
For more information on credit-report monitoring, see Online Banking Report #83/84. For more on pricing, see OBR #109.
--JB
Citibank's Comprehensive Loyalty Program
By Jim Bruene on October 18, 2005 5:54 PM | 0 CommentsDefinition: loy·al (loi
l) adj. Steadfast in allegiance
-
When I was a graduate student 17 years ago, I did a lot of research into so-called loyalty programs. At that time, other than the airlines and grocery stores (think S&H Green Stamps); it was a relatively new concept.
Now, just about every modern retailer has a loyalty program of one form or another, from pizza joints (our favorite spot has a “frequent pier” discount), to book stores ($25 annual fee for at 10% discount at Barnes & Noble), and even pet stores. The programs typically provide discounts, VIP services, and/or special programs for frequent customers.
-
Many financial institutions provide loyalty features such as relationship pricing, rewards for credit/debit card usage, personal bankers, and events for high-net-worth clients. But Citibank is breaking new ground with its Thank-You Points program.
-
The new rewards program has been featured in media campaigns for the past several months (thank you Citibank for focusing on the positive rather than continuing to over-publicize the identify theft problem). The program delivers points both for the depth of the Citi relationship and the amount of debit card spending. Spending on the many of the bank's credit cards, including the new Simplicity card, also count for points.
Debit card spending is straightforward, earning 1 point for every $2 spent on signature debit and 1 point for every $3 spent on PIN debit. Credit card spending earns 1 point per dollar.
Relationship points are earned for anyone having 3 or more accounts with the bank, and range from 25 points per month with 3 products and a Citibank Access checking account to 1200 points per month for someone with 7 or more products and a CitiGold Account (click on inset for more detailed information). An online tool is available to help users estimate the reward points they will accrue.
Customers are NOT automatically enrolled; they must call a toll-free number to enroll. There is no online enrollment option. Points can be redeemed by phone or through a dedicated website, <ThankYouRedemptions.com> which is currently closed for remodeling and due to reopen next week.
-
Example rewards:
- 20G iPod = 50,000 points
- round-trip coach air fare = 25,000 points
- make a wish = 25,000 minimum
- gift certificates: $5 = 1000 points; $10 = 1500 points; $25 = 3000; or $10 per thousand for larger amounts
Analysis
Loyalty programs can have a significant impact on customer retention and purchase behavior. However, the programs have three inherent problems:
- Cost of communicating the incentives and member reward status
- Consumer disinterest/apathy/fatigue with the program
- Cost of the incentives
Online delivery helps solve the first two problems. With email and web-based delivery the cost to communicate the details of the loyalty program are negligible, other than the fixed cost to create the communication. Second, the program can be kept fresh with continual feedback to the user when logged in to online banking. A progress chart along and program news serves as a constant reminder of the program benefits.
However, online delivery does little itself to impact the cost of the incentives. In fact, by making it easier to track and redeem rewards, you may be actual increase incentive costs due to higher redemption levels. On the other hand, if you increase interest and awareness, you may be able to get equivalent lift from lower-cost rewards.
-
The final word: Online delivery has the potential to greatly increase the impact of bank loyalty programs. So, expect other major banks to enact programs similar to Citi's. If you have a loyalty program, you may want to look at how it's delivered online. If you are not doing anything to systematically reward your best customers, you may want to add this to your 2006/2007 plans.
-
--JB
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Reference: Citi ThankYouRewards screenshot (links do not work)
Citibank's Security Pop-Up
By Jim Bruene on August 23, 2005 3:54 PM | 0 Comments
Under the "every little bit helps" theory, Citibank's popup window when registering for online credit card access is a nice touch.
The popup (click on inset for closer view) reassures users that they are entering information into a secure site. The well-crafted verse goes like this:
Secure.
A little word that that means a lot--especially online.
Rest assured, this registration process is just that.
The window closes itself in about 10 seconds, if the user hasn't done so already.
--JB
To learn more about how to promote online security and peace of mind, check out Marketing Security: The sensitive issue of publicizing security and authorization enhancements from our sister publication, the Online Banking Report.
Citibank Logout Screen Example
By Jim Bruene on July 8, 2005 1:12 AM | 0 CommentsOne neglected area of the online customer experience is logging out. Are you thanking your customer for banking online? Reinforcing that their secure session has safely ended? How about a little cross-promotion from time to time?
We've logged off more than a thousand times from dozens of financial institutions and it's never been particularly noteworthy.
However, this week Citibank's logoff screen caught our eye (click on inset for full screenshot). Not only did the bank thank us for our business, they posted an attractive promotion for its banking rewards program.
You may not have offer something quite as elaborate as the Citi program, but you can effectively use the logoff page to highlight service improvements, call attention to upcoming events, or highlight community involvement and volunteer opportunities.
--JB
2004 Online Financial Services Ad Spending
By Jim Bruene on June 7, 2005 2:54 PM | 0 CommentsJP Morgan Chase and Citibank led all banking and lending companies in online ad spending according to the most recent American Banker survey of financial services spending (May 2005).
Chase’s $50 million in online advertising was 21% of its entire advertising expense, the highest among major banks, and considerably above the 11% online share across all financial services companies. In comparison, Citi’s $49 million spent online was only 9% of its total advertising expense, slightly below the industry average.
NetBank, the 16th biggest online advertiser, was the percentage leader, funneling all but $100,000 of its $4.9 million in advertising into online initiatives. Two other major online advertisers spent more than half their money online last year: ING Direct spending 60% of its $40 million total online, and MBNA spending more than half its $14 million online.
Lending Tree, Quicken Loans, HSBC, Sovereign and East-West Mortgage all devoted about one-third of their advertising into the online channel.
Top-20 Financial Institutions Online Advertisers*
2004 Online Advertising (% of total advertising)*
1. JP Morgan Chase $50 million (21%)
2. Citigroup $49 million (9%)
3. American Express $28 million (9%)
4. Bank of America $25 million (9%)
5. ING Direct $24 million (60%)
6. Lending Tree $22 million (31%)
7. Ameriquest $16 million (13%)
8. Quicken Loans $10 million (33%)
9. Wells Fargo $9.2 million (14%)
10. HSBC $8.3 million (39%)
11. MBNA $7.0 million (51%)
12. Wachovia $6.3 million (7%)
13. E-Loan $6.1 million (21%)
14. NetBank $4.8 million (98%)
15. Discover $4.7 million (6%)
16. GM $3.8 million (4%)
17. Royal Bank $3.2 million (12%)
18. Sovereign $2.8 million (33%)
19. East-West Mtg. $2.7 million (32%)
20. WAMU $1.9 million (2%)
*Banking, Lending, Mortgage, or Credit Card segments only, does not include online brokerage, insurance, or investments.
If you look at the brokerage and mutual fund category, the spending accelerates. Four online brokers Ameritrade ($65 million), Scottrade ($63 million), Schwab ($58 million), and E*Trade $52 million) each outspent even the largest financial institution, and Netstock Direct ($32 million) outspent all but Citi and Chase.
Top-10 Brokerage & Mutual Funds
2004 Online Advertising (% of total advertising)
1. Ameritrade $65 (64%)
2. Scottrade $63 (87%)
3. Schwab $58 (35%)
4. E*Trade $52 (77%)
5. Netstock $32 (99%)
6. Harrisdirect $24 (78%)
7. Vanguard $12 (31%)
8. TD Bank $10 (17%)
9. Fidelity $5.3 (4%)
10. T.Rowe Price $3.8 (5%)
Download the Excel file with more details.
--JB
Citibank Fights Fraud with Personalized Emails
By Jim Bruene on May 30, 2005 12:01 AM | 0 Comments
It's fitting that the financial company most targeted in phishing attacks, Citibank, would be the first to introduce a new email format that goes a long way towards helping users identify legitimate email messages.
The personalized emails (click on inset to enlarge) include not only the name of the recipient, but also the last 4 digits of the user's ATM card. While simple personalization with the customer name would help many users identify legitimate emails, it's far from fool-proof.
First, there's the relatively common practice of including first name and/or last names in email addresses. Also, some phishers are using direct marketing tactics and first running email addresses through various databases to append actual names and other info to the email record in order to develop a personalized pitch (see ZD-Net article).
Citibank's new email format was announced to customers through a short message on the top of the online banking screen in early May. It is also now mentioned in the bank's main FAQ page.
Analysis
This is a great first step in winning back the confidence of users. Eventually email standards will evolve so that the email client will be able to readily identify legitimate emails, but that could be years in the future.
If you are considering a similar approach, you might want to let users choose the name and identifying information that appears in the personalization box. In February, we reported on a UK security initiative that took that approach.
For more information:
- Previous NetBanker post on eBay's personalized email strategy
- Security & Privacy from Online Banking Report (#93/94)
-- JB
Editor's Note: Citibank received an OBR Best of the Web award for this and other security features in Online Banking Report #119, "Marketing Security."
Banking Bill Payment Guarantees
By Jim Bruene on April 15, 2005 8:01 PM | 0 Comments
We believe a strong bill payment guarantee is crucial, not only to the credibility of your epayments program, but by implication, to your entire online banking offering. CheckFree has offered its logo up for years, but your customers want to know what YOU will do for them; most would prefer to know nothing about CheckFree.
And your guarantee needs to be visible to both online banking users and those just thinking about it. One of the best ways to increase visibility is by creating a "bill-pay guarantee" icon that users can click through to learn more about it.
One of the better examples is at Citibank (inset) on its logon page. When you click on the logo, a small popup appears (click on the thumbnail below):
*
This guarantee has great copy, you can tell the marketing department was heavily involved. Rather than just reiterating the rather droll performance guarantee,* the bank also highlights several benefits:
- No hidden charges, in other words, unlike "free checking," bill pay really is free
- 24/7 service with "fast response"
*Citi's bill-pay guarantee states that payments will be processed within 24-hours and delivered to payees according to the schedule, or the bank will pay for any fees incurred.
--JB
Citibank's Impressive Follow-up Sales Effort
By Jim Bruene on March 18, 2005 12:10 AM | 0 Comments
Citibank has woken my sick-in-bed wife the last two mornings, calling to remind me to submit my paperwork to fund the new checking account I established online two weeks ago.
She's not so thrilled with the bank, but I'm impressed with its tenacity.
Here is the scorecard of bank followup efforts:
- Email = 1 (about 2 weeks after application...almost missed it, thought it was a phish)
- Mail = 1 (technically not a reminder, it was the sig card and new account kit)
- Phone = 3 (first about 1 week after application, then number 2 and 3, about 2 weeks after application
It's an impressive follow-up effort. I've applied for a number of accounts over the years and I can recall receiving only one telephone call, from Salem Five back in 1995, and that wasn't even an application, just a sales lead. The last time I tried to start a checking account, with Washington Mutual, I never heard from them, not so much as a single email or letter thanking me for my application. As far as I know it's still sitting in limbo on some backup tape.
Sorry for the delay Citibank, I really do want that iPod, so I will be sending my $2500 deposit ASAP.
Action Item
If a company with as much experience as Citibank has found it to be profitable to make follow-up phone calls on unfunded new accounts, you should consider doing it as well. However, you may have more luck than Citi does using email followups. Citibank's brand in an email message is practically worthless these days after the pounding it's received from phishers.
--JB
Citibank's iPod Offer -- Too Much of a Good Thing?
By Jim Bruene on January 7, 2005 5:24 PM | 0 Comments
Forget about toasters.
Citibank is handing out iPod minis to new online banking customers provided they fund their new checking accounts with at least $2500 and pay at least two bills per month for a year.
Analysis
This raises the ante for online account acquisition. It's a pricey premium, even for Citibank, which has long been aggressive at its website, giving away eye-catching premiums such as DVD players or $100 cash.
There is no doubt that giving away the ultra-hot iPod mini will drive new accounts. But it may be over the top for a checking account offer, even by Manhattan standards.
How many 20- and 30-somethings will game the system just to qualify for the iPod? An even bigger concern is existing customers closing their accounts and reopening online in order to pick up an iPod.
But Citi knows what it is doing, and they must figure the new accounts, along with the publicity, makes the risk worthwhile. It will be interesting to see what this book of accounts looks like a year or two from now.
We think most financial institutions, at least those outside the NYC metro area, should keep premiums in the $50 to $75 range. It's enough to generate interest and applications, but not enough to create a buzz at FatWallet with people virtually salivating at the prospect of picking up low-cost iPod at the expense of a huge bank.
Aside: Kudos to Citi for posting a link to the Red Cross for tsunami relief.
If you'd like to learn more about the financial interactive marketing efforts, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.
Online New Bank Account Acquisition
By Jim Bruene on May 17, 2004 4:36 PM | 0 CommentsWondering whether to improve your online account opening process? In a recent American Banker article, Citibank said that 10% of its new checking accounts are opened online, and that's before they streamlined the process making it paper free. Previously, customers had to mail or fax a form with their handwritten signature.
Citibank offering $75 for new checking accounts
By Jim Bruene on April 29, 2004 4:46 PM | 0 CommentsCitibank is offering $75 for customers who open a checking account online.
Fine print:
$1,500 minimum deposit
must initiate 2 bill payments within 60 days of account opening
Citibank Issues an A2a Challenge to the Industry
By Jim Bruene on December 6, 2003 1:49 PM | 0 CommentsIf I hadn’t seen it with my own eyes, I wouldn’t have believed it. At BAI’s mid-November tech fest in New Orleans, Citibank’s Catherine Palmieri took the stage and challenged the audience to get moving with interbank, also known as account-to-account transfers (A2A). She said that 75% of its online transfers were inbound and that Citi was taking money away from the other big banks and brokerages, many of whom were in the room. Although they had not marketed the program yet, Palmieri reported “thousands” of users (she declined to be more specific).
I’m not sure what motivated Citi to hype its funds transfer prowess, except perhaps as a favor for partner CashEdge,1 who’s CEO Sanjeev Dheer, co-presented with Palmieri. Later Dheer assured me that Citigroup has no financial stake in the privately-funded company. In fact, two Citi competitors, Royal Bank and CIBC, made equity investments in CashEdge earlier this year.
As far as I’m concerned, when you make $4.8 billion dollars in the prior quarter, as Citi did in Q3, you are entitled to make any boast you want. Certainly, the A2A program is strategically the right thing to do. But we wouldn’t put much stock in the 70% to 75% inbound percentage that Citibank and other CashEdge clients have experienced.2 Since Citi has no fee for
standard (3-day ACH) inbound transfers, but charges $3 for standard outbound transfers, it’s not surprising that there is more inbound activity.3
If that pricing philosophy continues, the percentage of inbound to outbound transfers through web-based A2A will likely go higher. If Bank A and B both offer free inbound ACH transfers and charge for outbound, users will gravitate to the source of free transfers. For example, they will use A when transferring from B into A. But will use B when transferring from A into B. This doesn’t bode well for significant long-term incremental fee income, unless you can differentiate your service from others through ease-of-use, pricing, or trust (see Citibank icon).
1Or perhaps to take the sting off the recently shuttered www.C2it.com person-to-person transfer program, though Palmieri declined to comment on C2it.
2CashEdge says that across its entire client base, inbound volume is 70% of the total. But like Citibank, many financial institutions providing free in-bound transfers and charging for outgoing.
3Citi also offers a next-day transfer option priced at $3 for inbound and $10 for outbound, see Table 1, right.
Table 1
Citibank Interbank (A2A) Price Schedule
|
| Transfer Completion Time | |
|
| Next Day | 2 to 3 days |
| Price per transaction | ||
| Inbound | $3 | FREE |
| Outbound | $10 | $3 |
| Transaction limits1 | ||
| Daily Limit2 | $1,000 in $1,000 out | $2,000 in $2,000 out |
| Monthly Limit3 | $5,000 total volume (in & out) | $10,000 total volume (in & out) |
Source: Citibank, 12/8/03
Note: Cut-off times are: Standard: 1 am the following business day;
Next Day: 3 pm; therefore, between 3 pm and 1 am, both choices have similar delivery times, you might gain a day with Next Day.
1) Citibank plans to raise the limits as they get a better handle on
overall risk and individual customer behavior
2) Not to exceed a total of $4,000 in daily volume across both services
3) Not to exceed a total of $10,000 in monthly volume across both services
Long-term, online interbank transferring is a zero-sum game, every transfer is a deposit gain for one financial institution and a loss for another. However, short-term there are real opportunities to gain deposit share through convenient Web-based transfers. ING Direct http://www.ingdirect.com/ could be a poster child for the service. The only way you can remove funds, and the easiest way to deposit money, is via interbank funds transfer. The lack of ATM or check access hasn’t deterred U.S. consumers from opening more than one million accounts with total deposits of $14.3 billion (as of
Sep. 30, 2003) at the Internet-only bank.
At ING Direct (USA), interbank and intrabank transfers are handled from the same “Transfer Money” tab.
Citibank Deals with Spoofing on Home Page
By Jim Bruene on September 11, 2003 12:14 PM | 0 Comments 
The fake Citibank email (below) fooled so many users that the bank took the unusual step of posting a warning on its home page (screenshot left). Last month, Absa Bank did the same thing, to educate customers about the keylogging security breach at the South African bank.
Fake Citibank email.
(Source: Bankers Online, 8/18/03) www.bankersonline.com/operations/custserv_infosec.html
Password Procedures at 15 Financial Institutions
By Jim Bruene on April 8, 2003 7:23 PM | 0 CommentsUsing our live test accounts, we changed passwords then subsequently “forgot” the new one to test how major financial institutions handle the situation. Overall, most received good marks, although everyone has room for improvement.
Table 1
Password Scorecard
| Safe Practices | Yes | No | Unknown |
| Use a third password or challenge question | 1 | 13 |
|
| Disable Internet Explorer AutoComplete | 9 | 5 |
|
| Require 4 or more characters in passwords | 13 | 1 |
|
| Bank determines username | 6 | 8 |
|
| Require more than account number and social security number for online password reset | 4 | 4 | 6 |
| Send confirmation of password change to email address | 2 | 12 |
|
| Send confirmation of online password reset to email address | 2 | 6 | 6 |
| Send confirmation of password reset to mail address | 2 | 6 | 6 |
| Allow more than 3, but less than 11 unsuccessful password attempts* | 6 | 5 | 3 |
| Warn users in advance of account lockup | 3 | 11 |
|
Source: Online Banking Report, 4/03
*We believe users should have at least 5 login attempts, with clear instructions before and after lockout
Testing process
1. Login with existing username and password
2. Change password or username
3. Logout
4. Use online password reset if available
5. Attempt to log back in 10 times with an incorrect password
American Express
Password Scorecard
Grade: Needs improvement
Weaknesses:
(1) Browser AutoComplete function not disabled
(2) No email confirmation of password change
(3) Account lockout too quickly, after third login try
Password structure: User defined, 6 to 8 characters with at least 1 letter and 1 number
Username structure: 5 to 20 characters with
at least 1 letter
Second password/challenge: No
IE 6 AutoComplete disabled: No
Online password change: Yes, with old password
Email confirmation of password change/reset: No
Online password reset: Yes, with card number, 4-digit card ID (on face of card), work phone number, last 4 digits of soc, and 5-digit zip code
Account lockout with excessive login attempts: Yes, after third attempt; red warning issued after attempt two
Online username retrieval: Depends, certain accounts can retrieve their username online, others must call; we were in the latter group so could not test this feature
AutoComplete is not disabled on the login screen.
User friendly: American Express warns users after their second unsuccessful login that they will be locked out after one more attempt.
Password reset, step 1: Enter userid, card number, and 4-digit code from back.
Password reset, step 2:
Enter personal info for authentication.
Bank of America Credit Card
Password Scorecard
Grade: Good
Weakness: No email confirmation of password change
Username structure: User defined, 9 to 20 numbers
Password structure: 4 to 7 characters; cannot repeat 4 or more in same sequence as username; cannot be same character repeated
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: No, must call
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, after 4 attempts; help section carries clear warning
Online username retrieval: No
BofA provides a helpful popup screen with each unsuccessful password attempt.
Centura Bank
Password Scorecard
Grade: Fair
Weaknesses:
(1) No email confirmation of password change
(2) No warning of account lockout
(3) No customer service link or HELP available from login screen
Username structure: Social security number (with dashes)
Password structure: 6 to 15 characters
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Password change: Online with old password; but neglected to provide an on-screen confirmation that the change occurred, an annoying usability flaw
Online password reset: No, must call; password sent via postal mail
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, after sixth unsuccessful attempt; no prior warning
Online username retrieval: Unnecessary (SSN)
Centura had the best login screen “security look and feel.” It also provides a link to disclosures, but not a single mention of customer service or online help, even after making an unsuccessful login attempt. Evidently the bank’s lawyers have been through the site, but where’s customer service?
Charter One Bank
Password Scorecard
Grade: Needs improvement
Weaknesses:
(1) Browser AutoComplete not disabled
(2) No email confirmation of password change
(3) No warning prior to account lockout
(4) No message after account lockout
(5) A bit too easy to gain read-only account access for new users; requires account number and social security number. However there is a crucial safeguard for bill payment which requires mother’s maiden name, date of birth, home phone number, and a 2-day waiting period.
Username structure: Social security number
Password structure: Must be at least 6 characters
Second password/challenge: No
IE 6 AutoComplete disabled: No
Online password change: Yes, with old password
Online password reset: No, must call
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, not sure when it happens, sometime before the tenth attempt; the bank does not provide a warning of impending lockout, nor does it let you know after you’ve been locked out, you only receive a cryptic
error message.
Online username retrieval: Unnecessary (SSN)
AutoComplete has not been disabled
at account login.
New users enroll with social security number and account number. Note the excellent use of security graphics during enrollment.
Chase Bank
Password Scorecard
Grade: Good
Weaknesses:
(1) No email confirmation of password change
(2) No warning of upcoming account lockout
(3) No message after account lockout
Username structure: User defined, must include one number
Password structure: 6 to 10 characters, 1 of which must be a number
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: Yes, with name, account type, account number, social security number, and two user selected challenge questions
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, sometime during the first 10 attempts; no warning message and no indication when account is lockout out, a “try again” message just keeps repeating
Online username retrieval: Yes, displayed online after entering name, account type, account number, social security number
Chase is one of the few banks offering online retrieval of forgotten usernames. After correctly entering name, account number, and social security number, the username is displayed. At that point you can login if you know your password. If not, you can retrieve your password online by answering two previously selected challenge questions. This is great from a usability standpoint, but the bank should send a confirmation via email and/or snail mail.
To reset the password, users answer two
previously established challenge questions.
DeepGreen Bank
Password Scorecard
Grade: Needs improvement
Weaknesses:
(1) Browser AutoComplete not disabled
(2) No email confirmation of password change
(3) No minimum password length, can be a single letter or the same as the username
(4) No warning before account lockout
(5) No message after account locked out
Username structure: User defined, can be all alpha
Password structure: 1 to 14 characters, can be the same as the username or a single character
Second password/challenge: No
IE 6 AutoComplete disabled: No
Online password change: Yes, with old password and mother’s maiden name
Online password reset: Yes, with social security number and mother’s maiden name
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, but not sure when because the lockout is not disclosed until the user attempts to login with correct username/password.
Online username retrieval: No, must call, then wait
7 to 10 days to receive in the mail
A common security vulnerability: Failure to disable IE 6’s AutoComplete function.
Everbank
Password Scorecard
Grade: Needs improvement
Weaknesses:
(1) AutoComplete not disabled
(2) No email confirmation of password reset, even though it can be reset with info available to an identity thief, SSN and mother’s maiden name
(3) No email or on-screen confirmation of p/w change
(4) No warning before account lockout
(5) No help on login screen for the memory challenged
Username structure: Initially set as social security # (with dashes); can be changed online one time; 8 to 24 characters, not similar to current username, not same as password, not offensive, at least 2 numbers and 2 alphas
Password structure: 8 to 16 characters with at least one number and one letter, not similar to username, not similar to prior password, not the same reading backward and forward
Second password/challenge: No
IE 6 AutoComplete disabled: No
Password change: Online with old password; no confirmation of the change provided on-screen
Email confirmation of password change/reset: No
Online password reset: No, must call; new temp password given over the phone after providing SSN, name, address, date of birth, and mother’s maiden name
Account lockout with excessive login attempts:
Yes, after fifth attempt, must call to reactivate; no warning prior to lockout
Online username retrieval: No, must call
Everbank provides no help at login for users that forget username or password, just a lengthy warning written by the lawyers.
First USA Credit Card (Bank One)
Password Scorecard
Grade: Fair
Weaknesses:
(1) No email confirmation of password/username change or reset; especially important given relative ease of resetting username/password
(2) No warning before account lockout
Username structure: User defined, 7 to 16 characters, case sensitive
Password structure: 7 to 32 characters, case sensitive, must have at least 1 number, may not use the same letters consecutively, cannot match username or social security number.
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online username change: Yes, with old password
Online password reset: Yes, with credit card #, social security #, signature panel code, and expiration date
Online username reset: Yes, with credit card number, social security number, signature panel code, and expiration date
Email confirmation of password or username change/reset: No
Account lockout with excessive login attempts: Yes, locked out after four attempts, no warning given
First USA is the only financial institution tested which allowed usernames to be reset online; nice for usability but a confirmation of the reset should be emailed and/or mailed to the cardholder.
Harris Direct (brokerage)
Password Scorecard
Grade: Good
Weakness:
(1) No email confirmation of password change (thought there is for password reset)
(2) Only 3 login attempts allowed before lockout (but can reset online relatively painlessly)
Username structure: User defined, 6 to 15 characters
Password structure: 6 to 8 characters
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: Yes, a new disguised password is emailed after entering username and birth date; the new password is a created from the account holder’s mother maiden name and social security number but is not disclosed in the email, e.g. the first 2 letter of mother’s maiden name plus last 4 digits of social security number.
Email confirmation of password change: No
Email confirmation of password reset: Yes, confirmation also sent via snail mail
Account lockout with excessive login attempts:
Yes, after third attempt, but can be reset online; no warning before lockout
Online username retrieval: No, must call
HarrisDirect allows online reset after your account has been locked out for excessive login attempts. It was the only company which emails a disguised new password when resetting. For good measure, they also mail an identical confirmation.
ING Direct
Password Scorecard
Grade: Excellent
Username structure: Account number
Password structure: 4-digit number (called PIN)
Second password/challenge: Yes, one of 5 user-specified questions asked at login (see below)
IE 6 password remember disabled: Yes
Online password change: Yes, with old password
Email confirmation of password change: Yes; confirmation also sent via postal mail
Online password reset: No, must call
Account lockout with excessive login attempts:
No (not in the first 10 attempts)
Online username retrieval: Unnecessary (acct #)
ING Direct is the only bank we know of using a challenge question at login. In addition to account number and password, one of these five rotating questions must be answered correctly:
-
first 4 digits of social security number
-
zip code of mailing address (first 5 digits)
-
birth year (4 digit)
-
last 3 digits of social security number
-
last 4 digits of social security number
We like the concept, but the implementation is weak. By simply refreshing the browser screen, the would-be thief can select which question to answer, one of which is zip code, which is trivial to ascertain.
PayPal
Password Scorecard
Grade: Fair
Weakness:
(1) AutoComplete not disabled on the password reset screen (it is disabled on login page)
(2) Username (email address) known to others
Username structure: Email address
Password structure: 8 to 24 characters case sensitive; recommended, but not required that it include upper and lowercase and at least one number or special character
Second password/challenge: No
IE 6 AutoComplete disabled: Varies; yes, on main login screen, no on password reset screen
Online password change: Yes, with old password
Online password reset: Yes, via email; must answer secret question via email link; if unable to access original email account the new password is sent via snail mail
Email confirmation of password change/reset: Yes
Account lockout with excessive login attempts:
Yes, after 10 unsuccessful attempts; a lockout warning appears after the seventh attempt
Online username retrieval: Not necessary since username is equal to email address
PayPal is one of the few financial companies using cookies to automatically insert usernames at login. The company has used this approach since inception, so they must feel that the improved usability more than compensates for the decrease in security.
PayPal’s online password reset process requires the user to have access to the email account registered with the service. If not, users answer one of four authentication questions (top screen) and the password is mailed to a one of the previously confirmed snail mail address (bottom screen).
PayPal explains after the seventh incorrect password attempt that you have 3 more tries before lockout. This is a far more reasonable approach than many banks’ three-strikes-and-you-are-out policy.
Schwab
Password Scorecard
Grade: Fair
Weaknesses:
(1) No email confirmation of password change
(2) Account lockout too quickly, after 3 login attempts, but can be reset relatively easily online
Username structure: Account number or social security number
Password structure: 6 to 8 characters including at least one number BETWEEN the first and last characters; cannot match or be a subset of username
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: Yes, in one of two ways;
(a) If logging in with account number, you must provide social security number, date of birth, home phone number, and correctly pick a security in your account from a list of 10 choices including “none of the above”
(b) If logging in with a social security number, you must only provide the answer to the secret question.
Can also reset via automated phone system.
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, after 3 attempts; no warning prior to lockout
Online username retrieval: Not necessary (acct. # or soc. #)
Schwab’s unique password reset process requires the usual social security #, birth date, and telephone, plus users must correctly choose one of ten securities in the portfolio (including “none of the above”).
US Bank
Password Scorecard
Grade: Good
Weakness: No email confirmation of password change
Username structure: User defined, 8 to 24 characters
Password structure: 8 to 24 characters
Second password/challenge: No
IE AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: Yes, with ATM card number and ATM PIN; new password displayed online
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, after 6 attempts; can reset online or wait 24 hours; no prior warning
Online username retrieval: No, must call
Password change screen. Note the prominent placement of what happens next.
Forgotten password can be reset online with
ATM card number and PIN.
Wells Fargo
Password Scorecard
Grade: Good
Weaknesses:
(1) No email confirmation of password change
(2) Account lockout too soon, after 3rd login try
Username structure: Social security number
Password structure: 5 to 8 characters
Second password/challenge: No
IE 6 AutoComplete disabled: Yes
Online password change: Yes, with old password
Online password reset: Yes, with statement account number and ATM PIN; those without an ATM PIN are directed to call customer service.
Email confirmation of password change/reset: No
Account lockout with excessive login attempts:
Yes, after 3 attempts; user redirected to online password reset page; no prior warning
Online username retrieval: Unnecessary (SSN)
Wells offers six options for where to go
immediately after login.
After three unsuccessful login attempts users are directed to reset their password, which can be done online with account number and PIN.
Citibank’s Wall Street Journal Giveaway
By Jim Bruene on August 8, 2002 6:29 PM | 0 CommentsCitibank has one of the richest online promotions going. New regular checking customers earn a 1-year free subscription to The Wall Street Journal (normally $175) with a $2,500 deposit and after making two online bill payments within 60 days. The offer expires
Dec. 31, 2002. The bill payment requirement is an interesting twist that provides a double benefit: it motivates customers to start using their new account and it cuts down on those just signing up for the freebie.
Consider a similar promotion with your local daily. It makes a valuable premium and you may be able to negotiate free print advertising as well. Most periodical publishers are facing revenue shortfalls in both advertising sales and paid subscribers. A bank giveaway could be well received and well promoted.
Separately, Citibank is about to launch a completely revamped home page with new navigation. It’s a big improvement on its current design . Based on the preview posted online, the site makeover will incorporate most current design conventions including search and browse, an upper-right customer login, and so on. To view a Flash demo of the new interface, visit Citi’s current home page, www.citi.com and click on the banner on the top of the page).
Citibank Encourages Cardholders to Go Paperless
By Jim Bruene on January 6, 2002 7:11 PM | 0 Comments
One of the more important goals of bill presentment is the elimination of paper statements. However, most businesses cannot simply stop sending paper because many customers aren’t Internet-enabled by choice or circumstance. Most companies will have to either prod customers to shut off the paper or provide financial incentive. Since prodding is cheaper, that will be the first step for most billers.
As shown at left, Citibank greets new registrants to its Cardholder Central account management site with a message encouraging the use of convenient email notifications instead of paper. It seems to be working. Citi has convinced more than 5% (330,000) of 6 million registered users to give up their paper statement. At $0.50 per statement, assuming all were receiving monthly statements, that’s a cool $2 million saved. Not a bad ROI for this single screen.
Free Virus Protection from Citibank
By Jim Bruene on August 9, 2001 9:17 AM | 0 Comments 
Citibank is pitching a free virus protection plan to its credit card customers. We saw it mentioned in a message on the August 2001 Citibank AAdvantage Business Card statement, www.virusplan.com/aadvantage The free plan, from PromiseMark, includes:
- McAfee VirusScan software, including a full year of software updates
- Virus damage repair at one of 7,000 service centers nationwide
- Technical Virus Support online and phone
- VIRUS-911 Alerts sent via email, cell phone, pager, or PDA on severe new viruses
- Internet Protection Center with anti-virus tools and resources
At signup, you can choose to upgrade to one of two premium plans, one for $14.99/yr and the other at $29.99/yr that add local service and other benefits..
Citi Getting Closer to Launching its WingspanBank
By Jim Bruene on August 9, 1999 9:50 AM | 0 CommentsCiti f/i
Citibank’s Financial Interactive Network.
Citibank (New York; $690 billion) is getting closer to launching its WingspanBank. The new Citi f/i site is active, but is more of a placeholder than a legitimate virtual bank. There isn’t even an online application. Users are asked to download and print an account application or call various toll-free numbers.
We are not sure what Citibank hops to accomplish by making this site viewable to the general public. We know it’s a pre-launch “beta” site, but the average prospect, or journalist, that happens across it won’t realize it’s a work in progress. The bank should slap a password in front of it so only legitimate test accounts can get through. We’ll analyze it thoroughly when it’s finished. One think we can say, the name is cool, at least compared to Wingspan(ban)k.
Contact: Norm Bloomberg is SVP, (312) 627-5248.
Citibank at 1 million Payments Per Month
By Jim Bruene on March 11, 1999 3:45 PM | 0 CommentsCitibank
Norm Bloomberg, VP
500 W. Madison
Chicago, IL 60661
(312) 627-5248
www.citibank.com
Electronic Bill Pay Volume: Citibank isn’t saying, but we estimate 1 million payments per month (plus or minus 33%).
Status Report: Citibank processes bill payments for its own 400,000+ Direct Access base, plus its sole licensee BankBoston (formerly BayBanks) with 250,000+ users.
In discussion with two corporate clients to develop BIPS protocol based on business-to-business payment over the Internet.
Bill Presentment Plans: Not entirely disclosed, but will certainly leverage its ownership position in Transpoint (p. 14), a portal deal with Netscape, and its new direct bank, eCiti.
CitiBank Homepage Tries Lone Product Pitch
By Jim Bruene on July 6, 1998 8:21 AM | 0 Comments
Citibank
Citibank’s home page is gorgeous, although Elton John would seem to be the primary beneficiary of the sales opportunities on page one. The lone product pitch, located in the lower area of the screen, is for a Platinum Select MasterCard with 4.9% introductory rate.
Citibank (New York; $334 billion, 4.8 million ATM cards) launched an aggressive campaign to increase usage of its online banking program, paying new users $25 to try Direct Access (either the direct-dial or Web format). The goal is to reach one million subscribers by year-end, approximately triple its current base estimated by industry sources at 300,000 to 350,000. The company must be counting on heavy enrollment from its credit card base. Citi would only need to get about 3% of its cardholders banking online to reach the goal. Contact: Norm Bloomberg is VP Home Banking, (312) 627-5248.
The Five Largest North American Banks as of March 1998
By Jim Bruene on February 6, 1998 8:22 AM | 0 CommentsChase Manhattan
Chase Manhattan Bank (New York; $281 billion; 3.6 million ATM cards) has joined the online banking elite, crossing the quarter-million subscriber mark. Here are the five largest North American banks. CIBC (Toronto, Canada; CDN$283 billion; 4.8 million ATM cards) is also nearing the quarter-million threshold, reporting 200,000 users on March 4, 1998.
Source: company reports, industry estimates
(1) For free services, this number of subscribers isn’t particularly meaningful. Number of users is a far better gauge. But of the five, only BankBoston has reported regular users, which are 50-60% of subscribers.
(2) Monthly fee for lowest priced online option. Some charge additional fees for access through Quicken or Money.
(3) Bill pay is optional. The fee is waived at Wells with a $5,000 deposit balance and at Nations and BankBoston with premium checking accts. Additional transaction fees may apply for heavy users.
Financial Institution Milestones -- Citibank Adds Dial-Up Banking
By Jim Bruene on May 20, 1997 8:12 AM | 0 CommentsCitibank
www.citibank.com
Citibank UK (London) added dial-up PC banking to its menu of services. Last year the bank launched Citibank on the Psion. Following the lead of its U.S. parent, the UK version of Direct Access carries no fees.
In other news, Citibank (New York, NY; $281 billion; 4.8 million ATM cards) and VeriFone (soon to be part of Hewlett-Packard) will distribute VeriFone’s Personal ATM to customers participating in the upcoming NYC smart card pilot. The device will download value into a smart card over a standard phone line.
Contacts: Henry Lichstein, is VP Smart Card Development at Citibank, 212.559.1000. Thomas Kilcoyne is VP/GM Consumer Systems at VeriFone, 415.617.8000.
Banking Delivery Channel Strategy - ATMs and Beyond
By Jim Bruene on March 5, 1997 11:06 AM | 0 CommentsIn June 1995 Santos and Peffers published an academic study1 of the evolution of ATMs which showed that “early adopters” (those who deployed ATM technology before 1979) tended to gain substantial market share due to their bold investments. The same study showed that once ATM technology became widespread, it no longer provided banks with an obvious competitive advantage. Instead, ATMs became a strategic necessity—that is, they became a necessary condition for survival, not a money-making differentiator.
Let’s look at Citibank. From 1977 to 1988, the bank increased its market share in New York city from 4% to 13.4%. Most analysts agree that the ATM was a significant driver of that growth. During that period, ATMs served as a competitive advantage for Citibank. Today, however, no bank would expect to increase its market share by launching ATM access. In fact, most customers have grown to expect ATMs to be one of their banking options. That’s because ATMs have become a strategic necessity.
What will be the ATM of tomorrow? Which technologies will provide banks a temporary competitive advantage? Which will become strategic necessities? There are a wealth of new delivery channels on the horizon, and most bank managers are busy trying to determine which ones to embrace. If the history of ATMs is a good predictor for the evolution of other banking delivery channels, banks will profit from devoting more resources to understanding emerging technologies—and deploying them quickly. Let’s review some of the key delivery channels banks are using and talking about today:
1. BRANCHES: Many customers continue to flock—and probably always will—to this traditional banking delivery channel. Only a few banks nationwide have rid themselves of bricks and mortar.
2. ATMS: ATMs have evolved as the primary delivery channel for cash withdrawals. They are continuously being enhanced with foreign language, touch-screen, advanced transaction, video conferencing, and related capabilities. This channel is likely to continue to be an important one for most banks.
3. PHONE BANKING: With low set-up costs for banks, phone banking is another delivery channel that’s taken hold recently. Telecommunication companies and call centers now offer sophisticated voice response and video telephone services which increase functionality for bankers who prefer to contact their banks from home.
4. KIOSKS: Video kiosks give customers a direct connection to the most appropriate service agents. Although currently most don’t link directly to a customer’s records, this functionality is expected in the near future. At that time, banking kiosks will become enhanced ATMs.
5. PC BANKING THROUGH PERSONAL FINANCIAL SOFTWARE: Quicken, Microsoft Money, Managing Your Money, and related programs are a familiar delivery channel to many customers. These personal financial software companies offer direct links to many large banks. Some banks reject this delivery channel because they believe customers will transfer their loyalty to the software company, not the bank.
6. PC BANKING THROUGH PROPRIETARY SOFTWARE: PC, or dial-up banking, is sometimes offered through a bank's proprietary software system. Such systems are generally considered more secure than “open” systems. Their primary drawback is that they require the bank and/or its technology provider to issue and maintain the software program and its upgrades.
7. INTERNET BANKING: Today, talking about Internet banking seems to be the rage. Analysts predict it will grow by roughly 150% annually over the next four years. However, fewer than 75 banks currently offer true Internet banking. Most analysts agree that Internet banking will surpass PC banking within the next year or two—and that by 2000, there will be twice as many Internet bankers as people using dial-up programs.
8. COMMERCIAL ONLINE SERVICE BANKING: Online services such as America Online are becoming an increasingly important delivery channel for some banks. Some computer users prefer commercial online services because they find them easier to use and because they think they’re more secure than direct Internet connections.
9. INTERACTIVE TV: TV banking is currently being sampled in various test markets. According to Frost and Sullivan, today’s $545 million interactive TV market is primarily pay-per-view services. Some analysts believe it will grow to compete with the Internet (both for functionality and market share) with a market size of $12.9 billion by 2002. If interactive TV takes off with added functionality, TV banking is likely to be an important delivery channel.
10. SMART CARDS / E-CASH: Although they won’t offer all the functionality of the delivery channels outlined above, experts believe smart cards and e-cash will replace cash for certain purchases. Business Communications Co. predicts that the number of smart cards in use will grow from nearly 5 million today to more than 103 million in 2001. If this happens, banks will want to be positioned to deliver money through these innovative channels.
I sympathize with bank technology managers who are forced to grapple with this diversity of delivery channels. Each delivery channel has its own strengths and weaknesses. And each has a viable chance of becoming the next ATM. So, what should the bank technology manager do?
In his 1513 writing Il Principe, Niccolo Machiavelli said, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.” But such leadership—particularly in delivery channel technology—is what allows a bank to build or defend its strategic position.
When the future is highly uncertain, and the risk of being unprepared for the future is large, smart businesses find ways to prepare for any future they can anticipate. Banks who choose not to be early adopters must position themselves so they can deploy new technologies quickly enough that they won’t lose their existing customers.
Don’t build your company’s architecture for today's delivery channel; instead, make it flexible enough to incorporate tomorrow’s. Think about all the delivery channels your customers might demand in the future—and build a system that will allow you to deploy those channels quickly, effectively, and securely.
Top Web-Based Financial Services Launched in 1996
By Jim Bruene on January 6, 1997 11:32 AM | 0 CommentsThe Web dominated the news throughout 1996. As well it should have. We completely agree with David Weisman of Forrester Research that the Internet is the fourth channel for delivering financial services. Joining in-person, mail and telephone channels as an essential part of every financial institution’s marketing and delivery mix.
The following chart summarizes what we think were the year’s most significant developments in Web banking. From Liberty Financial’s WebSaver annuity to Carolina First’s newest division, Atlanta Internet Bank, these new products, services, and strategies provide a glimpse of how the fourth channel will be leveraged in the future.
Top Story
Top honors go to APL Federal Credit Union (Laurel, MD; $97 million) which in July used Digital Insight’s turnkey Web services to become the fifteenth financial institution in the world to offer online account access. Why is that so significant? APL has only 8,000 members! Yet, because Web-based services can be implemented so inexpensively, APL was able to beat giants such as Citibank, Chase, and Nations to the market with Web-based checking account access.
CAR FINANCING
FINANCING A CAR
Financing a car depends on many factors. Your current assets(your house, cash, stocks, unit trusts etc), you liabilities( existing loans, girlfriend/s!(haha... joking!)), your monthly income VS your monthly expenditure; so in essence, your liquidity and available funds. And also to a large extent how much would you be willing to pay a month to service the loan for the car should you choose to take out a loan.
For me I think it boils down to being able to pay for it without over committing myself such that servicing the monthly repayments would leave me with very little cash for other essential expenses, such as Johny walker's or Chivas fund and all... If you are over-commited, you might not be able to pay it should any short term unforeseen expenses that may crop up, which would lead to default and a rollover of interest(think sub prime crisis).
A good idea learnt from many financial speakers is to have a crisis fund to take care of any unexpected things that happen in life to hedge the impact of such event occurrence .
Of course, the most important thing would be the choice of car itself would'nt it? Is it suitable for what you'd be using it for? Do you need a car of that size? Is the PRICE right?
Well, when you have decided what car to get, you have to decide if you want to pay in full or get a loan. Few points to consider, compare the interest rates of the loan versus comparable investment vehicles of similiar type. Such as would it be better to pay more upfront versus taking the loan and letting your money sit in the bank at a 0.05%? interest rate? or more if you put it into a FD or Unit Trust or some other investment.
Then it'd come down to what kind of financing you'd like, a hire purchase of a flexi-term loan kinda arrangement.
Would your capital gains offset your interest payments?
How would that affect your monthly cash position?
Are you comfortable with that level of liquidity?
From my point of view, as a new entrant to the workforce, I would be seeking to reduce my monthly repayment to a minimum and to be liquid as I am just starting out with work and would not have substantial savings to fall back upon should something unexpected occur.
So my parting words would be to...
live within your means = D
Control Issues: A Miffed Bharti Pulls Out Of Talks With MTN
In a significant development, Bharti Airtel has decided to call off its talks with South Africa’s MTN. The deal has failed to make any breakthrough as both the parties could not reach an agreement on the control and other structural issues.
The Bharti group issued a statement saying MTN has presented structure that was not acceptable to it. The new structure suggested by MTN envisaged “Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Bharti Airtel held by the Bharti family and Singtel, in exchange for a controlling stake in MTN”. Bharti believes that “this convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity”.
The decision to pull out of the talks was prompted by this, and that is the end of what could have been the largest foreign acquisition by an Indian company.
Dhoot’s Mobile Gamble: Videocon In Talks To Buy Motorola’s Handset Business
Consumer electronics major Videocon is aiming another big global buy. The Indian company, promoted by the Dhoot family, is likely to buy out the handset business of US based Motorola Inc. The talks are at initial stages, though. Motorola’s handset business has a market share of 15 per cent globally and is valued at $ 3.8 billion. The business has been suffering losses and earlier this year Motorola decided to separate its handset business from its profitable broadband and mobility solutions business.
Credit Suisse To Acquire Chennai NBFC, Double I-Banking Team
A non-banking finance company (NBFC) is a key to every investment bank (or broking firm’s) growth in India. The latest to join the bandwagon is Swiss investment bank Credit Suisse. The bank is reportedly in the process of acquiring a majority stake (91 per cent) in a Chennai-based NBFC, Bokdia Marketing and Finance, reported The Economic Times. It will be via a fresh share issue, the report added. It will use the NBFC for its corporate finance operations and private banking
It’s not Credit Suisse alone bullish about NBFC business. Interestingly, Chennai has been the major source of NBFC deals in India with most of the M&A in that space belonging to the South Indian city. Temasek acquired Dove Finance a couple of years ago, while Goldman Sachs recently bought a stake in Shriram Credit. Edelweiss Capital recently received Rs 150 crore funding from Singapore GIC, while Karvy Stock Broking is in the process of acquiring an NBFC. India Infoline recently kicked off its NBFC business mainly for lending to corporates to fund buy backs by promoters.
Irish Firm CRH Buys 50% In Hyderabad Cement Maker My Home For Rs 1,875 Cr
In the costliest deal in the Indian cement industry yet, Irish building materials firm CRH has bought a 50 per cent stake in Hyderabad-based cement manufacturer MyHome Industries Ltd (MHIL) for Rs 1,875 crore. The deal is valued at $235 per tonne. In a release by CRH, the multinational company said it has acquired a 45 per cent shareholding in the privately held MHIL in the first phase. The second phase of the transaction for the remaining 5 per cent shareholding is expected to be completed in the next three months.
The most expensive deal till now was when Holcim, worlds largest cement maker paid $200 per tonne to Ambuja Cements in 2005. The deal values MHIL very highly as the current valuation to buy cement plant in India is $150 per tonne.
Mayfield Raising $150 Million India Dedicated Fund
Close on the heels of Battery Ventures announcing an India partner to be based in Mumbai (see our post), here is another Silicon Valley based fund drawing up its India dedicated fund plans. Mayfield Fund is raising up to $150 million for its first India dedicated fund, PEHub reported, quoting a regulatory filing.
Mayfiled has already secured $75 million from limited partners like Skandia Life Insurance Co., Adveq and Industriens Pensionforsikring for this fund, the report said.
Mayfield has investments in india such as Tejas Networks, IL&FS Investsmart, Suzlon and India Infoline. The fund is looking at infrastructure ancillaries, manufacturing, consumer services, technology and technology-enabled services sectors.
An India dedicated fund will help the fund scale up its investments in India. Mayfield has two partners - Nikhil Khattau and Vikram Godse - based in Mumbai and Navin Chaddha, a General Partner, based out of Silicon Valley. Three are focused on India investments.
Indians-Backed CBaySystems To Raise $123M PE To Fund MedQuist Buy
Indian-founded healthcare BPO firm CBaySystems Inc needs more than a helping hand from PE funds to complete its transaction with MedQuist, the world’s largest medical transcription company. CBay, founded by Indian entrepreneur Raman Kumar and in which India’s Godrej Group has a 15 per cent stake, will sell a 53 per cent stake to UK-based S.A.C. Private Capital Group (SAC) and US-based Lehman Brothers for $123 million. This will be used to fund its $285 million acquisition of a 69.5 percent in the Philips-controlled MedQuist. CBay would pay $11 a share for Philips’ stake in Medquist. Philips of Amsterdam paid $1.2 billion for 60 percent of MedQuist in 2000.
BNP Paribas Pays $10M To Geojit For Surrendering Commodity Bourse Tickets
BNP Paribas is now compensating Geojit Group for surrendering its commodity exchange membership. According to a stock market disclosure, the French banking group will pay Rs 40 crore ($10 million) to Geojit Commodities Ltd (GCL), a wholly owned subsidiary of public listed firm Geojit Financial Services, in consideration of surrendering its membership of the commodities exchanges.
In another disclosure, Geojit Financial Services also announced that BNP Paribas will pick up a 35 per cent equity share capital of Geojit Technologies Pvt (GTPL) for Rs 60 crore. GTPL is a wholly owned step down subsidiary of Geojit Financial and is engaged in IT software development and services.
UTI AMC Plans $600 Million Infrastructure Fund
UTI Asset Management Company has reportedly raised $600 million (Rs 2,400 crore) for private equity investments in infrastructure companies and projects. It has raised the money through its subsidiary UTI International, in association with Japanese commercial bank Shinsei and German bank specialising in financial services for the transportation sector HSH Nordbank, according to The Times of India.
Industry sources, however, told VC Circle that UTI AMC is still in the process of raising the fund, and the fund is not near the closure any time soon. UTI AMC is also the sponsor of UTI Ventures, the Bangalore-headquartered private equity fund.
How Arjun Murti Has Made Commodity Analysis A Fashionable Career To Pursue
Arjun N Murti is the most talked about analyst on the globe today. The Goldman Sachs analyst tracks oil, and has now made commodity analysis a sexy career to pursue in finance. Murthi’s recent claim to fame is that he has predicted oil will cross $200 per barrel very “soon”. The oil prices have already shot up to $135 a barrel.
Murthi, 39, is no pushover. In 2004, the New Jersey-born Indian had predcited that oil would cross $100 a barrel, a prediction which many of his detractors scoffed at then. The crude was then trading at a modest $40 a barrel. Murthi clearly had his finger on the oil pulse. As the crude breached the $100-mark in March the following year, many of his critics had to shut up.
SIDBI Venture To Raise Third Fund; Bigger Than Rs 500 Cr Previous Fund
SIDBI Venture Capital Ltd, the venture capital arm of Small Industries Development Bank of India, will raise its third fund in the next two months, a top official of the firm told VC Circle in an interview. The size of the fund is not disclosed, but it will be bigger than its second fund of Rs 500 crore. The new fund will have two closures and it will also have two components - domestic and offshore.
SIDBI Venture Capital is currently working out of its Rs 500 crore-SME Growth fund which it raised in 1999. “We have already deployed 80 per cent of our fund (in 20 companies), and have kept 20 per cent for follow on investment commitments. We will be raising a SME focused fund in another two months. This will be a significant fund for the SMEs,” Ajay Kumar Kapur (in the picture), CEO of SIDBI Venture Capital told VC Circle.
Idea Cellular Arm Gets $640 Million From Providence Equity
Idea Cellular Ltd, the mobile cellular company owned by Adity Birla Group, has received another round of private equity investment from Providence Equity Partners. In an announcement to the Bombay Stock Exchange, Idea Cellular informed that Aditya Birla Telecom Ltd (ABTL), a wholly owned subsidiary of the Pune-headquartered company, has issued compulsorily convertible preference shares to the private equity fund for an aggregate sum of $640 million. DSP Merrill Lynch was the advisor in the transaction for Idea Cellular.
These shares would be converted into 20 per cent of equity share capital of ABTL post dilution, the announcement said. The deal values ABTL at $3.2 billion. The investment is subject to the receipt of regulatory approvals, including the approval of the FIPB, the release said.
Battery Ventures Appoints Gautam Patel As India Partner
Finally, Battery Ventures, a Silicon Valley based venture capital firm, has got a man on the ground in India. The venture fund, which has been investing in India since 2004, has appointed Guatam Patel as a partner focused on investments in India. Patel was earlier head of European operations for iGate, a business process outsourcing and IT services company. Patel will initially work out of Battery’s Silicon Valley office. He will move to Mumbai in the second half of the year.
Battery’s India investment team already has Ramneek Gupta (senior associate) and Mark Sherman (General Partner), both based out of Silicon Valley. Gupta will join Patel in the later part of the
SIDBI Venture Invests Rs 30 Crore In Drug Maker Centaur Group
SIDBI Venture Capital Ltd, the private equity arm of Small Industries Development Bank of India, seems to be on a deal overdrive. Close on the heels of its Rs 30 crore ($7.5 million) investment in Chennai-based adhesives and sealants maker Anabond, the SME-focused private equity fund has announced the investment of a similar amount in Centaur Group.
Centaur group, founded by first generation entreprenuers S.D. Sawant and Dr Shrikant Sawant, owns two companies - Centaur Pharmaceutical and Centaur Chemicals Pvt. Ltd, which will be merged soon. Centaur Pharma makes drugs related to respiratory, ophthalmic, pain management, nutrients, gastrointestinals and anti-infective segments. It makes a formulation called Sinarest, which has a significant presence in the anti-cold segment, and Occurest, a brand leader in the ophthalmic decongestant market.
SIDBI Ventures Invests Rs 30 Crore In Adhesive Maker Anabond
Anabond Ltd, a Chennai-based manufacturer of industrial adhesives and automotive sealants, has received Rs 30 crore funding from SME Growth Fund of SIDBI Venture Capital Ltd.
Anabond is into manufacturing of industrial adhesives and automotive sealants for the engineering industry, and claims to have more than 50 per cent market share in those segments. The company has also entered consumer market through super glue adhesives. Anabond was set up in 1979 by J Vijayakumar and A. V. Ramanujam, who were working for Department of Atomic Energy, before starting Anabond.
Why Is Standard Chartered Considering An Indian Listing?
This could be a first for a foreign bank in India. Standard Chartered, the largest foreign bank in the country, is looking to list itself on the local stock exchanges. This could also turn out to be the first MNC to issue Indian Depository Receipts (IDRs)—which are securities that can be traded in the local stock market.
According to a report in The Economic Times, the plan could partly be driven by banks in India fetching a better stock market valuation. If StanChart actually comes with a IDR, it would be its third global listing after the UK and Hong Kong. The bank has already sounded out market regulator Sebi for the IDR listing.
HP’s Photo Printing Site Snapfish Acquires Merasnap.com
Probably this is the beginning of consolidation in the Indian web 2.0 space. Snapfish.com, Hewlett & Packard-owned online photo printing site, has acquired an Indian online photo printing website MeraSnap.com. The acquisition amount is not revealed. MeraSnap is a subsidiary of Knowledgeworkz Consulting, an information management company based in Bangalore, which provides email newsletter management services.
Kotak Mahindra Hires Hasan Askari For Global Buys, Expansion
Kotak Mahindra Bank, the former local partner of investment bank Goldman Sachs,
has brought on board a senior global financial executive to spearhead its international initiatives. The Mumbai based bank has appointed Hasan Askari, an investment banker and former member of the executive committee at Old Mutual, as an advisor with a mandate to expand the group’s business globally, including potential acquisitions. He will be based in Europe, and will be closely involved in expanding the Kotak Group’s global operations.
Uday Kotak, Executive Vice Chairman and Managing Director, Kotak Mahindra Bank Ltd, had this to say about Askari’s appointment: “(It) reflects our commitment to playing a more prominent role in the global arena.”
Apollo Health Street To Sell 8.5% To Healthcare Investment
India largest healthcare company, Apollo Group, is planning to sell 8.5 per cent stake in its BPO arm to Healthcare Investment (HIL), a Mauritius based investment firm, for Rs 61 crore. The pre-IPO deal values Apollo Health Street (AHS) at around Rs 700 crore. AHS will allot 2.3 million shares or compulsorily convertible equity shares to Healthcare Investment at Rs 260 apiece.
The funds would be used by AHS to repay the debt it had taken to acquire US-based BPO Zavata and to expand its facility in Chennai, reports The Economic Times. AHS is readying an IPO which will see a total dilution of 20 per cent to raise about Rs 160-170 crore.
Bahrain’s Khaleeji Commercial Bank Launches $163.5M India Real Estate Fund
Khaleeji Commercial Bank (KHCB), one of Bahrain’s leading Islamic banks, has announced that it has raised $163.5 million for a real estate investment company focused on India. The fund - named Danat India Investment Company - will invest in an unnamed real estate development project near New Delhi, India’s capital. The development is targeted at the expanding middle class of India.
The funds have been raised from investors across the GCC states. This is Danat’s first foray into Indian subcontinent. Ebrahim H Ebrahim, CEO, Khaleeji Commercial Bank, said, “With a target return on investment of 83 per cent over a three-year period, Danat seeks to address the demand for middle income residential properties…” Continue Reading »
CDC Commits $650 Million To Actis’ Third Emerging Markets Fund
It was only in January, CDC Group, the UK government-backed private equity emerging markets fund of funds investor, committed $1 billion to a new emerging markets infrastructure fund, managed by Actis, to make investments in Africa, South and South East Asia, and India.
In less than a span of six months, CDC Group has again commited $650 million to Actis’ third series of funds for investment across emerging markets – Actis Emerging Markets 3 LP. The series of funds comprises a Global Fund and four regional investment pools targeted at Africa, South Asia, China and Latin America.
As Merger Wave Peaked Last Year, 2008 May Be The best Time For M&A
If you are looking at making an acquisition, there may not be a better time than today. According to a study done as part of Towers Perrin/Cass Business School research project, 2008 may be the best time to do an acquisition. They suggest that over the last two merger waves, deals done in the year following the peak create more shareholder value than those completed during the upswing and peak years of the wave. The results of the study, which analysed 38,122 deals (only 100 per cent acquisition were considered) over the last nine years, found that 2007 was the peak year of the current merger wave, suggesting 2008 remains a good time to proceed with a deal.
According to the study, companies have created rather than destroyed value in the current deal wave, in contrast to the prior two cycles. The evidences in the report indicate that this trend will continue, suggesting that the post-peak year in the current merger wave will also add value.
Thomas Cook Enters Highly Competitive Online Travel Mart
This may not be so pleasing news for half a dozen VC-funded travel portals in India. Thomas Cook India, one of the most popular offline travel companies, has made its entry into the online space with www.thomascook.in. Online travel is one category that has been proved to be successful in India. It is expected to grow to the size of $2 billion in merchandise value by 2008.
The market is currently dominated by MakeMyTrip.com, Yatra.com, ClearTrip.com, and several others like Travelguru (hotels portal) and ezeego1.com. Continue Reading »
Poonawala Firm Acquires Stake In Orchid Chemicals; Will Ranbaxy Back Off?
Orchid Chemicals, the Chennai-based pharma company in which Ranbaxy promoter group firm was attempting a “raid” by acquiring a 14 per cent stake from open market, seems to have got a new suitor. The new investor is believed to be acting in concert for the Pune-based Poonawala group.
According to a stock market disclosure made on Friday Pune-based Adurjee & Bros has accumulated a 7.22 per cent stake in Orchid Chemicals through open market transactions. This stake is worth over Rs 125 crore.
Orchid was in news recently after a Ranbaxy group partnership firm Solrex acquired over 14 per cent stake and came close to the trigger point for a mandatory open offer as per the takeover norms. Last week, the firm disclosed that a set of investors have picked more than 7 per cent stake. Continue Reading »
Konaseema Power To Sell 17% For Rs 500 Crore To IDFC, Lehman
Konaseema Gas Power (KGPL), the Andhra Pradesh based power utility company, may sell nearly 17 per cent stake to private equity majors Lehman Brothers and IDFC Project Equity, reports The Economic Times. The company has been valued at Rs 3,000 crore and may sell the stake at Rs 500 crore.
Out of the Rs 500 crore stake, Lehman and IDFC may pick up stakes worth Rs 300 crore and Rs 200 crore, respectively. The funds are expected to finance the second phase of the KGPL plant construction, the report said. Continue Reading »
Chartered Accountants Will Be Allowed To Advertise Services; Will Lawyers Be Next?
It’s good news for Chartered Accountants, and also for publications like ours. CAs have been finally allowed to advertise their services after a council meeting of Institute of Chartered Accountants of India (ICAI), the apex body of CAs in India, decided in favour of the move, according to a report in Mint. CAs can now use print and electronic media to showcase the different services being offered by them, especially those that are not in their exclusive domain, such as risk management and consulting. Also CAs can now promote both their individual services and also the name of their firms. Continue Reading »
LN Mittal Set To Buy Bulgaria’s Largest Steel Maker From Brother Pramod
LN Mittal is all set to strike another deal. This time, Mittal would be grabbing the ailing Bulgarian steel maker Kremikovtzi from his brother Pramod Mittal who heads Global Steel Holdings. ArcelorMittal, the world’s largest steel maker, who has been fighting Ukrainian business tycoon Konstantin Zhevago’s Vorskla Steel, has reportedly emerged the preferred bidder for Kremikovtzi. Sources close to the development told VC Circle that the deal is yet to be sealed. Merrill Lynch, which advises Pramod Mittal on sale, is holding talks with both the Vorksla Steel and ArcelorMittal to fetch the best price for the seller. Continue Reading »
Ved Prakash Arya’s Milestone To Raise Rs 1,000 Crore Domestic Real Estate Fund
Indian real estate fund Milestone Capital Advisors is raising a new fund, Milestone Domestic Scheme–II, which will have a corpus of Rs 1,000-crore or roughly $250 million. The firm, founded by Ved Prakash Arya, a former manager at Pantaloon Retail, will focus on investing in emerging real estate markets, particularly the tier-II and tier-III cities and towns. The fund, registered with Indian market regulator Securities Exchange Board of India, is hoping to attract investors by offering a potential return of 25-30 per cent. According to a report, which quoted Arya from a press conference in Chennai, the fund would deal in land layout and plotted development besides developing residential and warehouse projects. Close to 40 per cent of the fund would be for layout development and the rest for warehouse and residential projects. Continue Reading »
Babcock & Brown Long On Housing; Weighs Hotels, Plane Leasing Too
Babcock and Brown, Australia’s second largest private equity fund, is ready to invest in Indian real estate and infrastructure sector. Although real estate prices are falling and infrastructure project costs are rising, the firm is unfazed. Babcock is betting on the high population growth and the resultant demand for more houses in India.
“In India and China, population growth is underpinning long-term demand. There is strong demand for rental accommodation and quality homes, and sophisticated financing is driving this demand,” Michael Maxwell, a key management committee member of Babcock and Brown Ltd, told Mint in an interview. Continue Reading »
Angels Back A Bangalore Company That Converts Text To Reports
Exclusive: Textual Analytics Solutions(TAS), a Bangalore-based text mining company that promises to make the life of information intermediaries easier, has landed funding of $250,000 from Mumbai Angels and Harsh Saksaria (whose Mumbai based family is into construction business). Prior to this round, TAS received $650,000 from a group of angel investors which included Ashish Gupta and Kanwaljit Singh (both managing directors of Helion Venture Partners), Rajiv Sahaney (Managing Partner of New Vernon Advisory Services), and Silicon Valley Bank. Continue Reading »
DE Shaw To Provide Rs 100 Crore Convertible Debt To Amar Ujala
Investment firm DE Shaw is close to providing Rs 100 crore debt to Amar Ujala Publications, a Hindi language newspaper publishing company, reports Mint. The funds will be taken in as debt, and can be convertible into equity.
DE Shaw Composite Investment (Mauritius) Ltd Pcc already holds an 18 per cent stake in the newspaper company, which publishes Hindi daily Amar Ujala. As the Indian laws restricts Foreign Direct Investment in a newspaper publishing company to 26 per cent, how much of Rs 100 crore would be worth in future equity will only be worked out later.
DE Shaw had valued the publication at Rs 650 crore in July 2007. The 18 per cent stake came in for an investment of for Rs 112 crore. What is intertesting is while the stocks of listed media companies have slid along with correction in the stock market, the private equity firms still offer a premium to the firms in this sector probably because there are not many firms up for grabs.
Deal Roundup: Topsgrup, Actis Biologics, Phoenix Mills
In the first overseas buy from security solutions industry, Mumbai-based Topsgrup has acquired 51 per cent stake in a security solutions company in UK. The company has not disclosed any details in the equity buyout. The group has also bought out Banglore-based Guardwell Private Detectives Ltd for Rs20 crore. After the acquisition Topsgrup will become the second largest security provide in southern India, providing a wide variety security solutions under one roof. Continue Reading »
Educomp Acquires 51% In Learning.com For $24.5 Million
Educomp Solutions Ltd, the publicly listed IT-based learning company, continues with its aquisitive led growth. The Delhi-based company has acquired a 51 per cent stake in Learning.com, a US-based provider of web-delivered curriculum and assessment, for $24.5 million. The deal includes the purchase of existing shares as well as an infusion of new capital into the company.
Learning.com, founded in 1999, serves nearly 2 million students in the US. It has solutions like EasyTech, a K-8 technology literacy curriculum that helps students develop and apply technology skills in math, language arts, social studies, and science, and other products like TechLiteracy Assessment (a tech proficiency assessment tool) and Aha!Math (an interactive K-5 supplemental math curriculum). Continue Reading »
Buyout Funds Rush To India And China: Capital International Raises $2.25B Emerging Markets Fund
Capital International, the UK based buyout arm of the US-headquartered Capital Group, has closed a $2.25 billion emerging markets private equity fund to invest in countries like India, China, Russia and the markets in Latin America. The money has come in from more than 70 institutions, including the Pennsylvania Public School Employees’ Retirement System and Lockheed Martin Corp.
This is the fifth fund of Capital International (christened as Capital International Private Equity Fund V or CIPEF V), and is four times the corpus of its previous fund. The investments targeted will be in the range of of $50 million to $250 million in companies across various regions and industries. The fund has already committed more than 25 per cent of its capital in six companuies - including Arcos Dorados, McDonald’s restaurant operations across Latin America and Unimilk, the second-largest dairy products producer in Russia and Ukraine. Continue Reading »
RBS Realigns Top Talent From ABN Amro; Barclays Too Tap Into ABN
As India emerges as one of the top destinations for M&A practice in the world, there is a severe catfight going on for talent in the investment banking business. Royal Bank of Scotland (RBS), which acquired ABN Amro Bank last year, has hired three key people from the Dutch bank for Indian investment banking operations. At the same time, Barclays Capital poached five senior managers of ABN to head up their investment banking operations in the country and elsewhere.
RBS has appointed Manoj Agarwal as head of global corporate finance for India, Anjani Kumar as head of M&A operations, and Dilip Kadambi as head of equity capital markets business. This seems to be part of RBS’s integration process with the Dutch bank. So this is probably more like a realignment of work force.
Menon is currently based in Hong Kong, where he handles financial sponsors-led M&A advisory in Asia. Kumar moves from ABN’s M&A advisory group in London, while Kadambi currently works in ABN’s ECM business in India. Besides, RBS has also hired Varsha Valecha, who was a business leader in ABN’s India ECM team. Valecha has also worked with Enam Securities. Continue Reading »
Loss-Making Kinetic Motor Seeks Buyout Funds
Two-wheeler maker Kinetic Motor is talking to both strategic and private equity investors to raise about Rs 150 crore. News reports had earlier stated that M&M is in talks to acquire the two wheeler firm owned by the Firodias.
According to a report in Mint, the Firodia family is not averse to becoming minority stakeholders though they want to retain at least 26 per cent stake. This is to focus more on their auto component business which is now under another listed firm Kinetic Engineering. Promoters hold about 55 per cent of Kinetic Motor through personal holdings and group firms. Continue Reading »
Godrej, Videocon Weigh GE’s Move To Shed Its Appliances Business
Following General Electric Co.’s announcement to sell, spin off or seek a partner for its large appliance unit, Indian durable makers — the Godrej group and Videocon — have been narrowed down as possible bidders for General Electric’s appliances division, reports the Economic Times.
Leading investment bankers UBS, JPMorgan and Goldman Sachs, which have been hired to explore options and conduct an auction, have narrowed down the two leading players in the Indian consumer segment. Continue Reading »
Zeus Numerix, IIT Bombay Incubated Firm, Gets $500K Seed Funding
Zeus Numerix Pvt Ltd, an engineering design services company incubated at IIT Bombay, has received Rs 2 crore ($500,000) funding from a group of high-net worth individuals led by investment bank Saltrock Advisors Pvt Ltd. Zeus is founded by a group of IIT-B professors and students. The company has the backing of 10 years of R&D at Dept. of Aerospace, IIT Bombay.
Zeus was founded in August 2004, and it specialises in computational fluid dynamics (CFD) tools and services. It has a global customer base across a diverse set of industries, including aerodynamics, automobiles, missiles/rockets, nuclear reactors and buildings, electric fans & motors etc. The company owns a proprietary platform and series of intellectual property in this domain. According to a release issued by the company, Zeus Numerix had been profitable since its inception, and had risen from a revenue base of Rs 20 lakh in 2004-05 to Rs 2 crore in 2007-08. Continue Reading »
Mukesh’s Partnership Model: Vornado For Real Estate, Four Seasons Or Accor For Hotels
Mukesh Ambani led Reliance Industries is foraying into the real estate and hospitality sectors with a $1-billion joint venture with the NYSE-listed Vornado Realty Trust. The JV, which is likely to have a non Reliance man as the head, will set up a real estate fund that will develop a network of mega malls and highway shopping centres in India, not just for its in-house retail firm Reliance Retail but also for others.
The oil & gas and retail company, India’s largest company by revenues, is also in talks with the Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad, according to a report. Continue Reading »
Cobra Beer Uncorks Three-Year Exit Plan To Entice Investors. Any Takers?
Cobra Beer, the UK headquartered alcoholic beverages company founded and managed by the India-born British millionaire Karan Billimoria, may be sold lock, stock and barrel in the next three years, the UK’s Sunday Telegraph reported. This move was revealed in marketing documents of the company used to convince financial institutions to back the company. That would answer the question on exit route for private equity firms who are looking to invest in the firm.
According to the documents, a sale is expected in the next three years - a “full exit in 36 months”. And that could be a trade sale to one of the big brewers or drinks companies. The company has identified “obvious buyers” like South Africa’s SABMiller, Russia’s InBev (in which Delhi-based Sun Group is a shareholder), Molson Coors, Carlsberg and Anheuser-Busch, besides Heineken, and certain Indian-owned companies (Vijay Mallya’s Kingfisher, anyone?) also as “possible buyers”. Cobra has given the mandate to N M Rothschild and City Capital Corporation as advisors. Continue Reading »
KPMG’s Pradeep Udhas Joins Greater Pacific Capital As India MD
A leading UK-based private equity firm, Greater Pacific Capital, has hired an investment banking veteran to head up its India office. Pradeep Udhas, one of the founding partners of KPMG India, has quit the consulting firm to join the PE fund, according to a report in The Economic Times. He will be one of the five managing directors of the London-based fund, and will be located in Mumbai.
Udhas joins the likes of Amit Chandra, Rajeev Gupta and Munesh Khanna who all left investment banking careers to join various global PE funds. Continue Reading »
Three Indian Brokers Said To Be Interested In UK Broking Firm Arden Partners
Indian broking houses are now looking at overseas markets for expansion. Close on the heels of Religare’s acquisition of London’s oldest stock broking firm Hichens, Harrison & Co for £55 million, there is one more deal brewing in the UK. At least three Indian broking firms houses - Indiabulls Securities, Kotak Securities and Enam Securities - are reportedly in race for acquiring Birmingham-based stockbroker Arden Partners.
The UK firm is a research-led institutional stockbroker focused on small and mid cap firms, and listed on London Stock Exchange’s Alternative Investment Market (AIM), with a market value of £31.12 million. It has offices in London and Bristol, apart from Birmingham. Continue Reading »
IL&FS Investsmart: SAIF Partners To Exit; Edelweiss Missed Out On The Deal
Private equity fund SAIF Partners, which owns 12 per cent stake in IL&FS Investsmart, will exit the company through the open offer to abe announced by the acquirer HSBC Plc. The British banking giant, on Saturday announced that it would acquire 73.21 per cent stake in Mumbai retail broking firm IL&FS Investsmart for $241.6 million (at a price of Rs 200 per share). The sellers are the promoters of the company, E*Trade (43.85 per cent stake) and IL&FS (29.36 per cent). IL&FS will also get $19.4 million as three-year non-compete fee. HSBC is likely to announce the open offer for 20 per cent shares early next week. Sources told VC Circle SAIF Partners will participate in the tender process (open offer), which is expected to be announced next week.
SAIF Partners had acquired shares in IL&FS Investsmart at close to Rs 50 a share three or four years ago. The exit will give the PE fund about 4.5-5 X returns. Continue Reading »
HSBC Buys Out E*Trade, IL&FS For $261M From Broking Firm IL&FS Investsmart
In one of the largest M&A deals in the Indian broking space, HSBC has announced that it would acquire a 73.21 per cent stake of IL&FS Investsmart in an all-cash deal for $261 million (Rs 1,070 crore). IL&FS Investsmart is co-promoted by IL&FS and US online brokerage firm E*Trade, who have exited in the deal.
HSBC is acquiring the stake from both the key promoters. HSBC, via its subsidiaries, will acquire 43.85 per cent from E*Trade and a 29.36 per cent from IL&FS for $241.6 million at a price of Rs 200 per share. Besides the deal value, HSBC will also pay Mumbai-based IL&FS an additional $19.4 million as part of a three-year non-compete agreement. Since IL&FS Investsmart is a listed company, HSBC will have to make a mandatory open offer to acquire up to 20 per cent additional shares.
VC Circle was the first to report about E*Trade exiting the Indian broking house following a hit it took after the subprime crisis in the US. Continue Reading »
Infrastructure Investing Turns Fashionable: Latest Entrant KKR
As the global economy is still reeling under the subprime crisis, infrastructure investing is becoming fashionable globally. Soon after Morgan Stanley and Global Infrastructure Partners (a PE firm backed by Credit Suisse and General Electric) announced almost $10 billion worth funds for infrastructure, here is one of the largest PE firms in the world, Kohlberg Kravis Roberts & Co., announcing its entry into the business of investing in roads, bridges, ports and flyovers.
The New York-based firm said it would invest in infrastructure assets worldwide. It has also hired George Bilicic from investment bank Lazard to head up this initiative.
Bilicic has been quoted as saying by TheDeal.com that there is a need for deployment of capital in sectors including electric and gas utilities, water, transportation (including roads, bridges and tunnels), gas pipelines and airports. “Across the economy and across nations, there’s a fundamental need for this asset class,” Bilicic told the website. It’s not clear how much it will set aside for the infrastructure initiative. Continue Reading »
Sequoia-Backed Sai Advantium Lands $20M From MPM Capital
MPM Capital, the largest venture capital investor dedicated solely to healthcare, has made a $20 million investment in Hyderabad-based Sai Advantium Pharma, a chemistry-driven drug discovery and development service company. This is the first investment by MPM Capital in India.
As part of the deal, MPM Managing Director William Greene is joining Sai Advantium’s Board of Directors. In 2007, Sequoia Capital had picked up a minority stake in Sai with an investment of $12.5 million (as reported first by VC Circle) .
MPM intends to help the company tap biotech firms in its own network, besides big pharma companies with which it has strong relationships. The global preclinical discovery and development outsourcing industry is poised to grow to $20 billion by 2010. Continue Reading »
loan wala.com
Loan Origination Market Heating Up; Komli Launches LoanRaja.com
Probably this could be a wrong time to launch an online loan lead generation company like ApnaLoan.com. Interest rates are at the peak, and everyone is deferring plans to take on more debt. But that will not stop new such companies from entering the market. Online ad network Komli has launched LoanRaja.com, which collects loan leads from consumers and pass on to financial services companies at a fee. Early this month, BharatMatrimony (BM) Group also launched a company in this space - called LoanWala.com. This is the sixth website of BM, a consumer internet company funded by Yahoo and Silicon Valley-based venture capital fund Canaan Partners.
I asked Komli’s CEO Amar Goel why the company entered the consumer internet space through LoanRaja, while Komli is an advertising network that brings together publishers and advertisers. According to Goel, a good number of his advertising clients are financial services companies, and by launching LoanRaja, he will also get to sell them leads and not just eyeballs. “We are a marketing services company, after all.” Komli was recently funded by Helion Venture Partners and Draper Fisher Jurvetson.
While LoanRaja and LoanWala are the latest entrants, the space already has two other prominent players. Sometime last year, a Delhi-based startup had launched Deal4loans.com, which claims to be an online loan comparison site. Deal4Loans is, however, yet to make a splash about their presence.
But India’s first loan lead generation company was ApnaLoan.com, a product of 1999-2000, but now jointly owned by its founder Harshvardhan Roongta and Sequoia Capital India who bought out the earlier investors in the company. ApnaLoan - which sells leads for all financial products like credit cards and not just loans - had gone through a rough patch post-dotcom bust. The company is now back in the game. The loan origination market (including insurance products) is estimated at about Rs 1,500 crore currently. As for loans, the lead generation commission could be anywhere between 0.5 per cent to 1 per cent, while for health and auto insurance products it could be 5 per cent.
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Jalsa (Pawan Kalyan's)
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Bharatheeyudu
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Bombay
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7/G Brundavan Colony
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carportal site i like
Carazoo.com: Buy, Sell New & Used Cars in India Online
21 Aug 2007 | Company & Markets| Gear & Gadgets
Now it is time to buy/sell cars online in India through web portal. Bangalore based Logix Microsystems (owner of izmocars USA) launched an interactive car portal called Carazoo.com
Now car buyers can get individual car prices, technical specifications and features, it has tools to compare different cars of choice, e-brochures, car reviews, car accessories, financing and insurance tips. You can take a car for a spin, experience a virtual touch and feel.
You can request for an unlimited number of no obligation, hassle-free car quotations, whenever you like, from Car Dealers in your city. You can choose among the various Dealers trying to avail the best offers along with Free Test Drives.
Used cars (second hand cars) can also be purchased through the Carazoo.
Carazoo currently gives information on cars of 17 makes, in 77 models and 300 variants. It is tied with 38 dealers in South India and 12 dealers in else where.
What are you waiting for.. Visit Carazoo.com to have an online car buying experience.
New York Life Insurance swims against the tide
At a time when most financial services organisations are seeking to not only generate leads, but also to actually conclude sales online, providing the quickest possible online quote is considered de rigeur for any Insurance website.
Not so, says New York Life Insurance. Swimming against the tide, NYLI proudly announces that it does not provide online life insurance quotes. It goes on to explain that Life Insurance solutions need to be customised for each individual's needs and is best left to its well-trained advisors. The landing page then goes on to collect the customary lead.
It is a well known fact that while internet users are getting more comfortable transacting online, an significant number prefers to use a combination of online as well as physical interaction in high-value, high-involvement purchases. A slightly dated Forrester Research report found that of all US households that bought financial products, while a significant portion researched online, only a few consummated the transaction online (see chart below).
Certainly makes a case for measuring online initiatives not just basis online leads generated, but also tracking those that conclude offline.
Labels: Financial Services, Insurance, Lead Generation, Life Insurance, New York Life Insurance, Online Marketing, Personal Finance, website development
Friday, November 16, 2007
Reserve Bank of India launches Financial Education Site for Children
Alootechie reports:
Reserve Bank of India has launched a financial education site RBI.org.in/FinancialEducation that aims to teach basics of banking, finance and central banking to children. According to RBI, the website will soon have information useful to other target groups, such as, women, rural and urban poor, defence personnel and senior citizens.
To explain complexities of banking, finance and central banking in a simple and interesting way, Reserve Bank of India has created two special characters Raju and Money Kumar. While Raju tries to learn all about banking, Money Kumar attempts to explain subjects dealt with by RBI, such as monetary policy, bank regulations and currency notes.
The website uses comic books format to make the learning process easy and fun for children. The Reserve Bank has already launched two comic books ‘Raju and the Money Tree’ and ‘Money Kumar and Monetary Policy’ on the site. While the former deals with basic banking the latter explains the role and relevance of RBI’s monetary policy for the common man.
The website also has films on security features of currency notes of different denominations and an educative film to persuade citizens to not to staple notes. The site also has games especially designed to familiarise school children with India’s various currency notes.
According to RBI, its financial education site will soon be made available in Hindi as well as in 11 regional languages such as Assamese, Bengali, Gujarati, Kannada, Malayalam, Marathi, Oriya, Punjabi, Tamil, Telugu and Urdu, besides English.
Labels: Banking, Financial Services, hindi, Online Marketing, Personal Finance, RBI, Web 2.0, website development
Friday, October 26, 2007
Advanta launches into social media with Ideablob
In among the best marketing applications of Web2.0 we have seen, Advanta, a large issuer of business credit cards in the US, recently launched Ideablob.com. Its a site where anyone can post a business idea and others can vote and comment on it. Igniting the fires is the $10000 prize every month for the best idea.
The site itself is built around the Digg concept - view posts, comment on them, vote for them, the highest rated ones come up tops. Adding relevance and value is an "advise" section that allows users to ask (business and business lifestyle related) questions which others can answer.
What we loved is the execution. Beautiful interface, complete with a "dashboard" which includes a daily graph showing how many votes the idea has received over the last week.
One month after launch, the site is generating a fair amount of activity. The eight October finalists showcased on the homepage have received the following:
* 691 total votes (must be registered to vote, can vote on more than one idea)
* 216 total comments (must be registered to comment)
* 10,300 total views (anyone can view the idea)
What's in it for Advanta?
- Initiating and associating with such a Web2.0 initiatives immediately makes it hip.
- At least some of the contributors and participants could be prospective leads.
- Sheer word-of-mouth that this could generate (helped in generous doses by $10k) would be worth it.
Labels: Banking, Credit Cards, Social Marketing, Web 2.0, website development
Monday, October 22, 2007
Are you a Super Parent? asks Max New York Life Insurance
Max New York Life Insurance has recently launched a new interactive campaign on their website that targets parents. Taking a lighter route to planning your children's future, the campaign, christened Super Parents, features a simple game that positions you as a "Super Parent" out on a mission to secure your child's future. To do that, you have to fly across the urban skyline to collect salaries, bonuses and other treats, while avoiding the dark clouds of inflation, impulse purchases, and other losses. The game is in multiple levels so the difficulty keeps increasing as the savings target goes up.
Its quite interesting and fun to play - you can select your avataar (mom or dad) and the increasing difficulty level keeps you challenged and engaged. The site also features information that helps plan your child's future, including a needs calculator.
We only wish the game itself had more educational value. Right now it only keeps you entertained. For instance, could the needs calculator and the game have been linked so the targets for the game are actually based on what your needs are? Similarly, certain items of profit and loss could be left to chance (random factors) - e.g. inflation, stock market dip, or windfalls, thereby making the challenge more realistic. It would also help if the banner on the MNYL home page is more catchy and engaging.
All in all, however, it is certainly an innovative and more approachable look at insurance planning and utilises the strength of the internet as an interactive medium.
Labels: Insurance, Life Insurance, Max New York Life Insurance, Online Marketing, website development
Wednesday, October 17, 2007
Most Visited Financial Websites
Alexa.com can throw up some interesting stats. We did a look up to see which were the most visited financial websites in India. Here is a summary:
At 15 is Moneycontrol – everyone is interested in the stock markets.
At 25 is ICICI Bank – ICICI bank has a strong Internet presence and advertises strongly via the net.
At 31 is ICICI Direct - arguably the most popular stock trading site in India.
At 48 is HDFC Bank - no other bank website made it to the top 100.
BSE follows at number 50.
Here is the big surprise - when we searched the top banking sites worldwide ICICI Bank came out at number 5.
Labels: Banking, E-Broking, Financial Services, HDFC Bank, ICICI Bank, ICICI Direct, Online Share Trading, Research, website development
Sunday, October 7, 2007
Australia Leads India - in Hindi language banking too!
Australia's Commonwealth Bank has always had a fresh approach towards their marketing, including their beautifully designed website. We recently discovered they are now showing us the way in addressing the banking needs of migrants coming into the country.
Their (sub)site Moving to Australia provides help on organising your finances before moving. So it comprises information on relevant products and services, as well as useful links that would be relevant to an immigrant. However, what is interesting is that this information is available in five languages - Vietnamese, Chinese, Indonesian, Korean and apna very own Hindi.
Although the content is relatively basic, it does acknowledge the increasing importance of the migrant Asian population. Their Press Release says that approximately 50% of Australia's population growth comes from immigrants, and as many as 1 in 4 Australians are born overseas.
The quality of (Hindi) translation is not bad, with the only concern being that some of lead-on pages (like specific product information or account opening) have been left in English.
However, the attempt to attract non-English-speaking audiences doesn't stop at the website. The Bank actually employs multi-lingual sales and service representatives, and even provide toll-free numbers from several countries including India.
In India, while some banks have started providing sites in Hindi, multi-lingual sites targetting NRIs are still not in common. In fact, we haven't come across a single banking website addressing NRIs in a vernacular language.
Labels: Banking, Financial Services, hindi, multi-lingual websites, Personal Finance, website development
Wednesday, September 26, 2007
Bajaj Allianz Launches New Website
Bajaj Allianz General Insurance has revamped its website and launched a friendlier and more accessible site.
The new launch has lighter colours and on first look seems clutter-free. The main product propositions are well laid out in the main content body, allowing users to quickly choose their area of interest. The Right Hand Side is well structured towards calls-to-action including a prominent invitation to buy online/get a quote.
The inner (product) pages though seem a bit disappointing - too "texty" with very little graphic relief or illustrations. Highlights of key policy benefits and icons for key next steps would have made these pages more user-friendly.
The "sales" orientation of the site is reinforced with a live chat functionality allowing users to "discuss" their needs here and now with a sales agent - a useful feature that could have been better highlighted on the site.
The primary navigation menu could also have been a bit bolder.
All in all, it seems like a well structured, no-nonsense, functional interface which should give users what they need pretty easily.
Labels: Bajaj Allianz, Insurance, Online Marketing, website development
Friday, August 31, 2007
Cyber Attack on Bank of India Website
Alootechie reports:
"The Bank of India website, bankofindia.com, has reportedly suffered a cyber attack that dumps malware onto a visitor’s system. Although it is believed that fully patched IE and Firefox browsers should be safe from the corrupted Bank of India website, “it’s probably best to avoid the site until a massive malware problem has been corrected,” writes WebProNews.
Alex Eckelberry, president, Sunbelt Software, has told WebProNews that his company has found more than 20 pieces of malware being delivered through an IFRAME on the Bank of India’s website."
End of report.
For those interested in digging deeper into the technicalities of preventing a cyber attack on your website, here's a decent take.
http://www.sheshunoff.com/ideanet/index.php?itemid=488
Labels: Bank of India, Banking, Online Security, website development
Saturday, August 18, 2007
Comparison of Loan Supermarkets
Online Loan comparison has got a step up in India. A new site www.ecompare.co.in has set its sights on giving the consumer a fair picture of the financial products in the market. The concept is not new in the market since Apnaloan.com has been around for some time now. In addition, other Loan Origination sites like loanmela.com, loanraja.com and deals4loans.com have also sprung up (see cashcow.in's previous post on this)
We decided to do a quick comparison between the two sites (Apnaloan.com and ecompare.co.in).
• The home page of apnaloan.com is well designed and attractive. Ecompare has a simpler look though not unattractive, it is without frills.
• The load time of apnaloan.com is longer that than that of ecompare. Ecompare was exceptionally fast with a comparison loading in barely 5-8 second….impressive.
• Apnaloan covers only the borrowing side of the business whereas ecompare takes a swig at the investments side as well.
• Apnaloan.com has plenty of content by way of articles, tips etc, ecompare definitely lacks there.
• Now to down to the actual rates. When we put in some figure to churn out home loan rates, we got a better choice of loans with ecompare than apnaloan. However, apnaloan has taken into account a very important aspect of the Indian market – negotiation. It gives you a benchmark rate and tells you have much leeway you can get by way of negotiating it down. It claims to help you with the negotiations too.
The real test of the effectiveness of the sites will lie in the quality and quantity of leads they are able to deliver. Apnaloan is a seasoned player, having weathered the dotcom storm, and presumably ironed out many rough edges. Ecompare on the other hand has the advantage of hindsight wisdom and leapfrogging the learning curve. However, funnily, the ecompare site did not give any clue as to who the promoters are, despite a google search.
Labels: Banking, Lead Generation, Loans, Online Marketing, Personal Finance, Web 2.0, website development
Wednesday, August 1, 2007
ICICI Bank "first round winner" in "World's Best Internet Banks"
Global Finance magazine has announced the First Round winners in the “World’s Best Internet Banks” competition in Asia and ICICI Bank has emerged the "First Round" winner from India. First Round winners include Best Corporate/Institutional Internet Banks and Best Consumer Internet Banks at the country level. The Regional and Global winners for these categories will be announced at an Awards Ceremony in New York City in November and published in the December issue of Global Finance.
Besides being the winner in the country category, ICICI Bank also takes the bow for best Bill Payment and Presentment category. In Asia, the presence of HSBC and Citigroup looms larger than life. Many of the country-wise winners in the best banks category are the local branches of these two stalwarts. Cashcow had recently reported the possible imminent redesign of the ICICI Bank website.
This is the 8th year Global Finance has named the World’s Best Internet Banks. Details on all First Round winners will be published in the September issue. The Regional and Global winners for these categories will be announced at an Awards Ceremony in New York City in November and published in the December issue of Global Finance.
Winners were chosen among entries evaluated by a world-class judging panel consisting of representatives from Tata Consultancy Services Ltd. Global Finance editors were responsible for the final selection of winners in the First Round. Only banks that entered the competition were considered for awards, and awards were only given in those regions, countries and categories in which there were entries.
Winning banks were selected based on the following criteria: strength of strategy for attracting and servicing online customers, success in getting clients to use web offerings, growth of online customers, breadth of product offerings, evidence of tangible benefits gained from Internet initiatives, and web site design and functionality. Category winners, such as “best online cash management” were selected based on the relative strength and success of those web products and services.
Source: IndiaPRWire.com
Labels: Bill Payment, Citibank, HSBC, ICICI Bank, Online Banking, Online Marketing, website development
Thursday, July 19, 2007
ICICI Bank Redesigns Home Page
In an interesting and innovative twist to banking websites, ICICI Bank has recently replaced its earlier home page (see image 1) with a new one (see image 2). The agenda of the new home page is to specifically draw the visitors' attention to current priority communications. At the moment, these include account safety, transparency and customer care - perhaps reflective of their ongoing offline campaigns. Users are also given the option of going to the old home page, in case they feel lost, which we thought is a very user-friendly move.
What we like about the new home page is its simple and uncluttered approach. Its refreshing to see that 200 things are not screaming out at you for attention and the user can pick where he/she wants to dig deeper into. From the bank's point of view, we believe it also makes the communication more effective with better chances of OTS and clickthrough.
What we didn't like (apart from the aesthetics) was the lack of internet banking access on the home page. It requires customers to click once more before they can get on to the log in page.
Having said that, this is clearly a temporary move (in fact, the copy clearly calls it a "special edition" home page), perhaps in advance of a site revamp. Yet, with a bit of fine tuning, this could be an interesting new trend for banking websites. Have a look at ING Direct's home page if you really dig minimalism.
Labels: Banking, Financial Services, ICICI Bank, Online Banking, Online Marketing, website development
Monday, July 2, 2007
Centurion Bank of Punjab launches innovative integrated campaign.
In a bid to break the clutter, Centurion Bank of Punjab and Arc Worldwide, the integrated marketing services agency of Leo Burnett, came together for a novel approach to promote the bank’s new branch. The agency used outdoor, direct marketing, activation, ambient, SMS and retail for this initiative at Mumbai’s Marine Drive.
Elaborating more on the initiative, C V S Sharma, Senior VP and Director, Arc Worldwide, said, “Even traditional media was used judiciously to support this unique integrated promotion. At the two points of entry to Marine Drive (JJ flyover and Choupatty) hoardings and banners were put up. Direct mail was sent to select housing localities announcing the treasure hunt. We set up the website www.banknextdoor.co.in, integrated mobile engine and launched the programme.”
With a shoe-string budget of Rs 2 lakh-Rs 3 lakh, about 60 per cent of morning walkers were given the keys and about 30 per cent of these key recipients visited the bank. About 70 per cent people logged on to the website, while 75 per cent sent SMSes. The bank also saw a significant number of new customers walking into the branch, and several of them ended up opening not only the treasure chests, but also an account with the bank.
Labels: Banking, Centurion BOP, Financial Services, Online Marketing, website development
Thursday, June 7, 2007
DSP Merrill Lynch Mutual Funds launches redesigned website
DSP Merrill Lynch Mutual Funds has recently launched a redesigned web presence. In terms of content the site carries standard information that would be required for any mutual fund website. The site also features an interesting layout with secondary navigation sandwiched as a second column between the main navigation on the left and the content pane on the right. It takes one by a bit of a surprise at first but as it turns out, its pretty easy to use, and in fact makes for an interesting change.
Labels: Mutual Funds, website development
Wednesday, May 30, 2007
Website targets NRIs investing in India
Yet another report from the Times of India today talks about a new website launched by the Ministry of Overseas Indian Affairs in association with the Confederation of Indian Industry. The website at www.oifc.in targets persons of Indian origin seeking to invest in India.
"The Overseas Indian Facilitation Centre (OIFC) would act as an one-stop-shop for enhancing partnership with the Indians residing abroad by giving authentic and real time information," Minister for Overseas Indian Affairs Vayalar Ravi said while the launching the centre.
Besides providing a data base of investment opportunities, the centre would also offer advisory services to Non-resident Indians like consular issues, financial services and their stay in India, he said.
There are about 25 million Indians living abroad and according to Ravi India received about US$23 billion in remittances in 2005, much below the potential.
Read the full article here.
NRI's have always been a significant target group for marketing financial services products. This move by the MOIA may just provide a boost to their efforts.
Labels: Banking, NRIs, website development
Saturday, May 26, 2007
Use of Rich Media in Retirement Planning
We have long heard the predictions of the huge marketing challenges and opportunities to be posed by convergence of TV and the Internet. With broadband and IPTV now upon us it, is high time we cracked it. Here are two award-winning, envelope-pushing campaigns from the US that, in our opinion, well nearly do.
Wachovia Securities, the securities and investment arm of Wachovia Bank, launched a Retirement Planning microsite that features a video host who guides users through an experience that enables them to choose how they want to live in retirement and provides tips for getting there. The users’ experience is centered on three building blocks of preparing for retirement: Design, Build and Live. Users can view several web shows that provide helpful information about planning for retirement, accumulating assets toward retirement and living on income once in retirement. Users also have the opportunity to use engaging interactive tools to help them learn more about preparing for retirement.
The other campaign, from Genworth Financial (a personal finance company), is also about retirement planning and speaks to the boomer generation’s need to think about financial security in later stages of life. Using rich video and animation, the microsite communicates the experiences of actual Americans that are 100 or older. The site enables visitors to navigate through the lives of people like Roberta Smith, 100 who helped Lucille Ball and Desi Arnaz when they built their hotel in Palm Desert, California. Or hear how Leonard “Rosie” Ross, 100, still goes out dancing once a month. In true Web2.0 style, it also invites users to post their 100+ stories, thus starting a conversation.
A critical feature of both campaigns is that they take the discussion away from finance and money, and focus on the quality of life. With only an estimated 11% of India's working population having any kind of old age social security, some high-quality, interactive dialogue of this kind is perhaps in order for the many insurance and personal finance companies setting up shop here.
Both microsites are a must-see.
Labels: Genworth Financial, Insurance, Online Marketing, Pensions, Retirement, Social Marketing, Viral Marketing, Wachovia, Web 2.0, website development
Saturday, May 12, 2007
ICICI Bank Goes Green, Promotes E-Statements
In an effort to promote e-statements and go the green banking way, ICICI Bank has come up with an interesting promotion in collaboration with The Bombay Natural History Society. As part of the campaign, a website called Go Green has been launched. On this website, customers of ICICI Bank can sign up for receiving their bank statements by email in lieu of which ICICI Bank will plant a tree in lieu of the savings they make by not having to send you printed paper through the mail.
Not only does the customer receive a Go Green certificate from ICICI Bank and BNHS, but the customer's name is also featured on the Roll of Honour on the site - a nice way to publicly acknowledge the customer's initiative.
It is an attractive site which also includes some interesting tree facts thrown in for good measure.
The idea itself, however is not unique. In 2005, SBC (now part of AT&T) had launched a similar campaign to promote e-statements among its telecom customers. The campaign was even featured on the Marketing Sherpa Hall of Fame 2006, and featured a very interactive microsite where you could actually explore virtual trees planted by various people.
Most banks promote e-statements and online banking as a part of cost saving campaigns. This takes it a step further and gives a feel good factor to the customer by encouraging him to do the right thing and save the planet. Green Banking has taken many forms worldwide…from e-statements to reducing carbon emissions from servers in banks.
According to an MSNBC Report, Citibank has recently stepped up its green banking efforts. As part of the group-wide plan, Citigroup's markets and banking group expects to invest in and to finance more than $30bn in clean energy and alternative technology during the next 10 years, with current commitments already approaching $7.5bn.
This is one call that hopefully should not hassle customers.
Labels: Banking, ICICI Bank, website development
Thursday, May 10, 2007
UTI Bank launches redesigned website, sees surge in leads
UTI Bank recently launched its revamped website at www.utibank.com.
The website features a completely new user interface as well as an XML-based backend which makes the site easy to maintain. According to the Bank, the new site has resulted in a huge jump in traffic and leads.
With a majority of bank website visitors logging directly on to their accounts, most banks are faced with the challenge of cross-selling and promoting products and generating leads. In such a scenario it has often been observed that critically examining and redesigning the navigation and user experience often allow visitors to get a better understanding of the bank's products/value propositions, resulting in increased leads.
Of course, simplified and user friendly application procedures, straight-through processing (read our previous post on STP here), and decision making tools are must-haves in any successful financial services website.
Labels: Banking, Lead Generation, Online Banking, UTI Bank, website development
Tuesday, April 17, 2007
Website Development is a Business Expense
In a recent order in favour of a tax assessee (indipreneurs.com), the Income Tax Appellate Tribunal (ITAT) has ruled that expenses incurred for developing websites are revenue expenses in the normal course of business, and not capital expenditure. (Source: M Padmakshan, Page 13, The Economic Times Mumbai Edition, 16 Apr 2007)
This means that websites are not assets that need to be part of a company's balance sheet, and all expenses incurred for their development and maintenance can be included in the income and expense account of the business.
Although this may seem obvious to most, the Income Tax Department did not think so. The ITAT upheld the appeal of indipreneurs.com and observed that "a common sense approach to the Web site expenses is that they are in the nature of revenue expenditure, particularly as the expenses do not result in the creation of a permanent asset. A website is basically a means to disseminate information. The only thing permanent here is the unique address".
The ITAT's differentiation between a website and a web address is significant. The web address or domain name is of course an asset for any business, but the website at that address is just a dynamic medium that helps the business interact with all its stakeholders.
Over to the Tax Department.
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Monday, 18 April, 2005, 11:19 GMT 12:19 UK
Germany's new 'great depression'
Record numbers of Germans are suffering from depression and other mental illnesses, a new report says. According to the research, by a German health insurance firm, cases of depression among Berliners have risen by 70% since 1997.
Up to 70% of Germans also say they are prepared to seek professional help for psychological problems.
Mental health experts blamed the rise on Germany's faltering economy, which has seen unemployment rise to over 5m.
German insurance firm DAK surveyed 2.6m employed Germans in an effort to discover the impact depression is having on modern working patterns.
"How will someone ever get better when they know their boss is just waiting to fire them?"
Burghard Klopp
Charité Hospital, Berlin
Among the respondents were 90,000 people working in Berlin, where treatment is widely available.
In contrast, fewer people reported feeling low in Germany's eastern states, where jobs and security are increasingly scarce, but mental health treatment is rarer and some taboos still exist.
Vicious circle
Workers in Germany's capital, regarded as one of Europe's most vibrant modern cities, emerged as an unhappy bunch more likely to miss work through depression than for any other reason.
Nationally, mental health problems were the fourth most common cause of absence from work, behind back pain, colds and flu and personal injury.
"In times of economic insecurity, young people in particular tend to develop psychological problems in response to professional and private obstacles," said DAK's Chief Executive Herbert Rebscher.
The report also blames modern working culture for the rise, especially among young people, although increasing numbers of elderly Germans also say they suffer from some form of psychological illness.
Psychological problems in men between 25 and 29 and women between 20 and 24 have doubled, the DAK reports says.
Nevertheless, most respondents said they would rather be depressed with a job than unemployed and happy.
"How will someone ever get better," Burghard Klopp, a depression expert at Berlin's Charité hospital, told German broadcaster Deutsche Welle, "when they know their boss is just waiting to fire them?"
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