So, I was headed home from work this evening and decided to stop at a local restaurant for some takeout.  After placing my order, I then paid with my handy-dandy First Federal debit card.  After receiving my food, I headed on home to enjoy my meal.

When I settled in to eat my dinner, I checked my phone to see what alerts came in from mobile banking.  I saw two debit alerts, one that matched a purchase I made earlier, and one that didn’t look familiar.  It seems that what I thought I paid for my meal was not matching the alert I received.

I then logged onto online banking and saw the debit description for the restaurant.  It seems that the cashier added a dollar tip that I didn’t remember giving.

I guess he didn’t know that: #1 I get SMS alerts on my debit card and #2 I work for the bank.  Tomorrow morning, they will most likely lose out on the transaction altogether.

So what have we learned?  SMS alerts can help protect you against fraudulent charges; and small business owners may want to be a little more honest with all this technology in consumers’ hands.

Update

The restaurant adjusted their credit charges at the end of night.  So I ended up being charged the correct amount.

Photo by Skokie

This past weekend I attended the first BarCampCharleston.  I must say, this event was as fun and enlightening as I thought it would be.  Thanks to all that put the event together.  And special thanks to the Lowcountry Innovation Center for hosting the event.  If I ever do a startup, I’ll be looking there for space.

One thing I discovered was, it really sucks that you can’t be in two places at once.  While I enjoyed all the sessions I attended, I regret missing a couple of the other cool ones.  I think my high school drum skills would have helped me in the Rock Band Challenge. Also, there were a few times that  I thought, “what the @*&% are they talking about?”  I really need to do a lot of tech reading in my spare time.  Apparently, there is a lot I need to learn about Github and Amazon Web Services.

In another session, I finally got to see how @jaredwsmith does his weather tracking magic.  Who knew there were so many free tools to track weather?  Also, thanks goes to @bank_daddy for sending the Google Wave invite.  Now I feel like a hip techie.

BaconCamp, the last session I attended, was a bacon lover’s dream.  Ted, from Ted’s Butcher Block brought in a couple hundred samples of bacon.  Let me tell you, that stuff you get at your local grocery store does not compare.  I still have applewood bacon flashbacks.

Now that I’ve attended a BarCamp, I can really see the need for BarCampBank.  I don’t know if we can get 130+ attendees, but I’d sure like to try.  So what do you think, BarCampBankCharleston in February 2010?

First Federal has now launched Mobile Banking for its customers.  I have to say, I am really excited about this new service.  While I was skeptical about the benefits of the service a couple of years ago, I have to admit that having my bank in my pocket is great.

Being a lead on the project was a lot of fun.  After looking at most of the vendors in the market, we finally decided on ClairMail.  We felt that text alerts was a very crucial piece to mobile banking and ClairMail fit our needs nicely.  One added bonus is that we are the first bank/credit union to offer mobile banking without requiring the customer to be an online banking user.

I believe this will allow the bank to tap even more potential users that may not necessarily want to use online banking.  Customers can use text messaging and/or mobile web for mobile banking.  Some of the features that are currently available are daily balance alerts, deposit/withdrawal alerts and transfers.  There is also a stylized iPhone version.  If you are a First Federal customer, you can register for mobile banking here.  Some screen shots are listed below.

Ok, who didn’t see this one coming?  The government is currently reviewing the whole overdraft policy that banks and credit unions have been enjoying over the years.  Consistent complaining and the current state of the economy have driven the issue to the forefront.

From a consumer standpoint, I wholeheartedly agree that the fees are a bit excessive.  But what gets my goat is charging me for transferring money from my secondary account to cover the overdraft.

While banks and credit unions made $24 billion last year in overdraft fees, I’d bet they waived at least that much, if not more.  I always felt that if they were more consumer friendly, they’d probably make more in fees.

So here’s my suggestion on what the industry can do to be more “caring” and keep a majority of that generated overdraft fee income.

1. Process all deposits to accounts first
2. Process check items, bill pays and card purchases in the order they are received OR from smallest to largest
3. If there is an overdraft, allow the draft to come from another checking, savings or ACR/LOC account, penalty free
4. If there is no account set up, or the draft account is used up, charge 10-25% of the amount per item, with a cap of $35 per item.

Now I haven’t seen any industry statistics, but from what I’ve seen here, most items that cause an overdraft are for less than $100.  Charging $2.50 for a $10 bounced check will get you a lot less calls and irate customers than charging $35.  Also, most people won’t even argue over a 10-25% fee.  They will probably look at it as a foreign ATM charge, a convenience fee.

The big news today was Mint.com being bought by Intuit.  My guess is Intuit was worried about this new upstart that had astronomical growth in an area they assumed they had on lock.  It makes you wonder whether the threatening letter Intuit sent to Mint was just a way to gauge Mint’s success.

I see this as a great move by Intuit.  FinanceWorks is, well, not as good as the other web PFMs that are available.  A year ago, Mint, Wesabe and Jwaala all had features that I don’t think FinanceWorks has to this day.  From what I’ve seen in my usage, Mint really gets the whole web PFM space.  With Intuit, I see the small business demographic really being helped.

A court has allowed a suit to be brought against a bank for lax security with their online banking.  I guess one could say it was only a matter of time.  As financial institutions keep encouraging their customers to use electronic channels, security has to be a top priority.  There have been more than enough security breaches in the credit card industry to serve as a warning.  Software glitches, such as the one suffered by Rudder, hasn’t helped either.

Customers want to feel that their money is safe, which is a primary reason that people use banks.  With online banking, bill pay and PFM usage growing, lax security is not something the financial industry needs.  In some cases I’ve read, lower levels of security seems to be a choice because of the associated costs.  Everything sounds expensive until you have that first major breach.

With Citizens Financial, I don’t know whether their online banking vendor didn’t have a more secure option, or they chose to not  add a more secure service.  If they chose a less secure option because of cost, I bet that choice looks a lot less expensive now.  If their vendor didn’t offer a more secure option, I imagine that will come to light very quickly.

Hopefully, FIs have come to the conclusion that security is just included in the cost of doing business.  If they decide to roll the die and take a chance, the odds are some hacker will find out about it.  This is even more so for smaller FIs because they don’t have the resources.

With mobile payments on the horizon, security is something that can’t be skimped on.  A little more customer confidence in the industry wouldn’t hurt either.

Picture from The Lockhorns

Last week Best Buy inadvertently began selling flat panel TVs online for $9.99.  The Internet lit up with news of the “too good to be true” offer.  After correcting the price online, Best Buy said that they would not honor the purchases.

Best Buy isn’t the first company that this has happened to, and I’m sure they won’t be the last.  However, they missed out on a wonderful marketing opportunity.

Imagine if Best Buy, or another company, offered easter egg products on their website.  This would help drive even more traffic to their sites and help increase sales for other products.  It wouldn’t have to be something they did every month.  By keeping the timing and products random, it would help the customers go deeper into the website and hunt for those bargains.

It would have been so much better if Best Buy had instead announced that the first 100 TVs that were sold at $9.99 would be honored. And please keep checking the website for more special bargains.

Sheesh. Who knew that it’d been so long since I’d written a post? Now that our conversion is just about over, I plan to get back to it. Stay tuned. Same Kismet time. Same Kismet channel.

As you all know, Friday has become known as Bank Failure Friday.  While I was getting ready to leave for the weekend, I got the news that my employer, First Federal, had acquired Cape Fear Bank of Wilmington, NC.

Over the coming weeks, I’m sure that we will be in a controlled state of chaos, putting these two bank systems together.  While I am sad that circumstances forced the closure of Cape Fear Bank, I am excited to be working with a new group of coworkers.

Hopefully this transition will go smoothly and we can grow and become an even better bank.  So, to the Cape Fear Bank family, I say, “Welcome to First Federal”.

First Federal has now added their social media links to their Contact Us Page.  So far, the Twitter account has mostly been used to announce workshops that the bank has sponsored.

First Federal Contact Us

Here are the links to their sites:

Twitter: @firstfederal

Facebook: First Federal FB

YouTube: First Federal Online

Well, it’s that time of year again.  You know, when we are bombarded with articles of how much time is wasted in the workplace because of March Madness.  Those wonderful tales of how much productivity will fall until April.  Statistics of how bandwidth will be brought to a crawl because of employees watching live streams of the games.  And let’s not forget the $8 billion that will be lost over the coming weeks.

Now, I admit that I love March Madness.  It’s pretty hard not to when you grew up in ACC country.  Like most people at my company, I’ll be checking up on the scores as much as possible.  But will my productivity fall off?  Maybe a little, but I doubt it.  With everything going on, March Madness will bring some normalcy back to the workplace, push the economy woes to the side just a little.

One thing I’ve always wondered was, if businesses know that March Madness will cause a distraction, why don’t they embrace it and turn it into an advantage?  Now would be a great time to run that “Madness” product special.  Perhaps you could run a March sales contest for your employees.  Or maybe you could have a “Madness Customer Appreciation Day” where they are invited to wear their team colors and win a prize or get a special promotion.

The point is, March Madness comes every year.  Fighting it will not change that fact.  By taking advantage of this time, you can promote and grow your business.  Right now, any advantage you can get needs be seized.  Otherwise, next year you could be watching those games from home, and not by choice. Oh yeah, GO SCSU Bulldogs!!!

Thanks to my nephew Darris for letting me use his basketball picture.

Well, First Federal is starting to tip its toe into the pool of social media. After securing our Twitter account last year, I began having occasional lunch meetings with our webmaster and our contact in Marketing, @tompolk.  We’ve been discussing some strategies and have looked at what other banks and credit unions are doing.

Needless to say, with everything happening in our industry, tools that can provide free marketing are starting to look pretty good.  Also, permission marketing seems to be a better way to connect with our customers and market.  It doesn’t hurt that one of our local competitors is also embracing the web in their business strategy.

With that said, I’d like to invite you all to follow us on the following sites:

Twitter: @firstfederal

Facebook: First Federal FB

YouTube: First Federal Online

Also, you can follow me on Twitter at @gpasley.

Lately there has been a lot of angst about banks not lending their new found TARP funds.  Admittedly, I haven’t really been paying close attention to who these loans are supposed to go to.  But I’ve heard discussions about increasing the amount of consumer loans.

Now maybe it’s just me, but it seems that most people have drastically cut back on their spending habits; even more so when it comes to big ticket items.  I mean, the Super Bowl was at the beginning of the month, so there’s no reason to go out and buy that 72 inch plasma now.

Most people are worried about keeping their jobs and homes.  They aren’t going to take out an EAL or ACR just to spend it.  They’re going to hold on to it for emergencies, not go on a spending spree.   What banks have been seeing is a lot of refinancing.  I imagine that people are using the cash they receive to pay off bills or put into savings.

So if consumers aren’t spending money, who is?  My guess is the thousands of small and medium businesses out there.  SMBs don’t necessarily need a million dollars to execute their business plan.  Actually, loans for less than $50K can do wonders for them.  Also, if you look at the news, the big companies seem to be having layoffs while the SMBs are hiring.

Maybe we need to do all we can to help out small business so that they can keep hiring and producing, which will help put money back into the economy.  Making loans just for EALs and refinancing just allows people to have a cushion.  Lending to profitable businesses will have an exponential effect on all of us.  It will certainly help more in the long term.

A few weeks ago The Bank Channel posted an article about banks getting their internet banking in order.  In the article they broke down the various barriers that banks face in upgrading their current offering.  While the list they had was thorough, there was only one problem, it didn’t include “know-how”.

There are 16,000+ banks and credit unions in the US.  I’d be surprised if more than 1% built their own IB system.  Also, going by what I’ve seen, most banks and credit unions don’t have much of a technical staff.  At most, a majority that do have technical people on staff have people that handle their core system and/or their servers and desktops.  Some may actually have a webmaster on staff.  I seriously doubt most have a software development team.

My current employer is one example of a bank that does have an in-house team.  Our E-Commerce department was formed from a software company subsidiary that was dissolved.  If not for owning that company, we wouldn’t have the expertise in-house to develop web applications.

As for developing an IB system, we have kicked that idea around.  But to be honest, we’re all working on so many other things that we don’t have the time to sit down and develop an IB system.  It was decided that the current vendors are “good enough”.  The same thing goes for new PFM systems.

One good thing about have web experience in-house is that we know, smell and can see “BS”.  Vendors’ excuses of how impossible a feature/function is to implement gets them an email of the pseudo-code of how to do it.  FYI, vendors don’t like it when you send them pseudo-code.

Now, because most banks and credit unions don’t have web developers, they are locked in to whatever their chosen vendor offers.  The best that they can do is make recommendations for features.  Ultimately, they are beholden to their vendor; and vendors know that banks don’t want to go through a lengthy conversion process.  As time goes on, it only becomes harder.   Changing your IB provider is now just as hard as changing your core because single sign-on is gaining in use.  Now if you change IB vendors, you have to make sure remote deposit capture, mobile banking, payroll systems, and PFM still works correctly.

One thing that I’ve seen is, it is really hard to develop these complex systems without a dedicated staff.  Sure, we could write the best IB and PFM system in the market, but we can’t dedicate our small staff to support these projects.  There is a reason that the majority of banks and credit unions buy their software.  In the greater scheme, an IB or PFM system is no different than the online account opening, online mortgage or commercial loan software.  In the end, all you can do is purchase the software that will best fill your needs and stay on the vendor to implement the features your customers want.

Well, what a year 2008 was.  Right now, a lot of people are wishing they could just do the ol’ three-finger salute on the whole banking industry.  Between the sub prime crisis, close to 30 bank failures and Big Daddy Madoff, it’s no wonder.  Getting back to basics is what is needed to turn everything around in 2009.

I’m really looking forward to seeing what this year brings.  For one, I believe SMS will emerge as the standard in mobile banking.  Last year, a lot of banks started researching this channel.  This year, we will begin to see a lot of rollouts.  In our market, we’ve already seen a few banks launch a mobile banking product.   I’m sure there will be even more announcements by the end of the year.

Seeing how the receivers of TARP funds use their new capital will be interesting also.  I suspect that a few banks will use their excess cash to pick up a competitor or two.  Also, will we lose one of the big three this year?  Citi is looking kind of shaky right now.  Bank of America still has to integrate Merrill Lynch.  If the next fallout happens in credit cards, both could be in even more trouble.

All in all, I’m excited about what this year may bring.  With a new administration, I expect to see some major changes.  Here’s to brave and exciting New Year.

Earlier this week, local bloggers/tweeters were invited to Coco’s Cafe, in Mt. Pleasant, for a food tasting event.  This was all setup by Lyn Mettler of Step Ahead Web Strategies.  I’d never heard of Coco’s and had never eaten at a French restaurant.  I must say, the food was great, especially the desserts.  Normally, I feel chocolate and mint are a bad combination, but Coco’s has definitely changed my opinion in that regard.

By inviting local bloggers, I’m sure Lyn hoped that we would blog about our experience.  From what I saw that evening, I’m sure most did.  There were a couple of people that even posted pictures on www.brightkite.com.

This get-together made me think about how banks could do something similar.  Commercial customers are more profitable, on average.  Arranging bank sponsored get-togethers would be beneficial to both the bank and their customers.  Normally, bank customers are invited to events that showcase the bank’s products.  Events that showcase the customers would be a welcome change.

Commercial customers offer a diverse line of products and services.  Getting a group of them together would be a win for them and the bank.  With the economy in the dumps, any way that could help drive new business to commercial customers would be greatly appreciated.

Imagine it, the bank invites restaurants and caterers so that they can provide and showcase their food.  Other companies could give five minute presentations about what they offer. Afterwards, more networking could be done.  The bank would be seen as a partner, not just a money lender.  In this economic crunch, banks need to do everything they can to get more customers on their side.  This would definitely be a step in the right direction.

Ken Lewis says that “two of the struggling Detroit automakers should combine and prove to the government they are worthy of a $25 billion rescue package.“  It’s statements like that, that make me worry about Bank of America pulling through this financial crisis.  Mr. Lewis is proposing that two failing companies combine so that they can be an even bigger failing company?  I am unable to comprehend how this is a good thing.  US automakers have been in trouble for years.  There’s a reason that foreign cars are the best sellers in this country.

I’m sure most people know that US automakers have fallen woefully behind.  A bailout isn’t going to help very much, it will just slow down the inevitable.  Some fundamental changes have to be made in the US auto industry.  Megan McArdle gives a very good explanation of one problem that the auto industry needs to overcome in order to survive.  Chris Yeh has another perspective on helping banks but letting automakers fail.  Perhaps failing may be the best thing for the auto industry.  Certainly, funding a failing industry that is unwilling to change should not be an option.

Speaking of funding failing companies, I’ve seen news blurbs about financial companies, such as GMAC, wanting to convert to banks.  One thing that some of these companies have asked for is to be considered for part of the bailout package if they buy a struggling bank.  In case you missed that, let me repeat.  By buying a struggling bank or converting, certain financial companies want a piece of the bailout package.

Personally, if someone brought that proposal to me, I’d have them unceremoniously kicked out of the front door.  People are already leery about the bailout package in general.  Now these other companies want us to fund their poor investment choices or give them a handout because they want to become a bank?  If they want to buy a poorly leveraged company, that’s their choice.  But expecting US taxpayers to kick in is just wrong.

Frankly, just bringing that proposal to the table makes me leery of their business sense.  Also, if you’ve decided to apply to become a bank after TARP was announced, you should be automatically excluded from receiving those funds.  It’ll be interesting to see how all this plays out.

Well, BarCampBankCharleston is over.  Unfortunately, we didn’t get the expected turnout.  John Buchanan and Tom Polk, from First Federal, along with George Kelley, from ClairMail, were able to make the event.  I knew that attendance would be low because of traveling budgets being cut in the last few months.  The intense rain we had here at the end of the week didn’t help matters either.

Because there was only four of us, we pretty much talked about projects that our bank was looking at.  We also discussed some things that we heard other financial institutions were doing.  Recent bank closures was another topic discussed.  After a couple of hours, we decided to move our get together to Buffalo Wild Wings and partake in some wings and college football.

Although I was disappointed with the low turnout, I still think the BarCampBank concept is something we need.  Hopefully, I can participate in BarCampBankSF2 in April and really see how BarCampBank works.  Perhaps we’ll try this again in Charleston next year.  One thing that I know we need to do is get the word out sooner.  This way people can save the date and plan accordingly.

We also need to take a grass roots approach.  From what I’ve seen, not too many bankers in South Carolina know anything about BarCampBank.  Getting the word out to local bankers and explaining the concept will be better in the long run.  It’s not all about talking about using Twitter and Facebook in your bank.  Now, more than ever, we need to come together and help each other restore confidence in our industry.  Sharing ideas and collaborating is the best way to do that.

Hopefully, we can get a huge turnout the next go round.  Until then, see you at the next BarCampBank.

Recently, I needed to transfer some money into my cousin’s account.  Because we both have a Bank of America account, I stopped by a local branch.  After being directed to a teller window, I noticed a debit card reader.  The teller asked me to swipe my card and punch in my pin so that she could pull up my account information.  After my transfer was completed, I asked how long had they been using card readers.  She replied that it had only been a couple of months.

I thought the use of card readers was pretty cool because it avoids the whole “may I see your license please” whenever an unfamiliar customer comes into the branch.  Also, the tellers don’t have to look up an account number.  Using the card reader brings up the customer information for them.  I assume this makes the transactions faster but I can’t be certain.

It does make me think that maybe Bank of America is doing okay.  They are still investing in technology and improving their processes.  Now if they would just get that mobile banking application so that I could wave my phone instead of using my debit card.

Picture by Auntie P

There’s word of mouth marketing, and then there’s word of mouth marketing. These pictures of a kitted up Crown Victoria were sent to me. For some reason, I don’t think Bank of America has sponsored this car. But hey, is there a such thing as bad publicity?

BofA car

Money in headlight

Money in night deposit

Card in Grill

Pictures from CarDomain