Tag Archives: FinTech

Finally! Innovation attacks the mortgage lending process with GoRefi!

We recently refinanced our house to take advantage of a rate one point lower than our current mortgage.  Wow, that’s a big chunk of money each month. However, the process to realize that savings was PAINFUL!  We worked through a broker, Finet Mortgage, who we’ve used for several transactions.  The team at Finet does a great job finding the best rate and is very helpful in managing the laborious document submission process.  Unfortunately, despite Finet’s best efforts, the refinance process is still not pleasant due to the lender’s processes, document requirements and lack of communication… that results in frequent rush requests to find certain pieces of paper.  All the back and forth frequently results in a longer time to close…and frequently in increased fees to get the work done.

There is so much room for improvement here.  EVERYONE has similar painful experiences.  There has got to be a better way!

GoRefiThere IS a better way and the innovation is coming from GoRefi.  I spent some time with their leadership and learned more about their product and value proposition.  Banks, be ware, GoRefi is well positioned to turn the mortgage lending process on its head…and can pass savings off to consumers at a lower interest rate.

GoRefi takes the friction out of the mortgage lending process by focusing on the major frustration points my wife and I complain about: poor lender communication, long times to close and elimination of exorbitant fees. GoRefi positions itself to:

  • Provide an interest rate .25% lower than most banks
  • Provide a 30% savings on closing costs
  • Close the transaction in 14 days…instead of the industry 60

Wow, this sounds great.  So, why did we use our broker and NOT GoRefi?

My wife and I have managed between us over 10 real estate transactions and I have to admit I’m a little hesitant to use GoRefi.  I’m sure many others experienced and inexperienced people may be hesitant as well.  I think the hesitancy can be appeased if GoRefi:

  • Articulates their legitimacy as a lender. I’d like to know if GoRefi is the loan originator…or if they also shop around to other lenders for the best rate. If they do make the loan, where does the money come from?  Where do their rate quotes come from?
  • Communicates their stability as a company.  Most people don’t care who originates the loan.  However, I personally find it frustrating when our loan is resold…and resold…and resold.  This is concerning for it means we need to revise our bank’s bill pay tool to submit payment.
  • Defines how they treat and protect all the data submitted.  At this point GoRefi does not clearly define what precautions they take to protect our identities and PII.  How do we know GoRefi is not a lead gen site that resells the information provided to legitimate and not-so-legitimate companies?  Yes, GoRefi does provide this information on a Security and Privacy page…but the links are in the breadcrumbs at the bottom of the home page.  This information needs to be FRONT AND CENTER.

Having met these guys it is clear they will have responses and processes in place to address each of my reasons for hesitancy.  However, consumers will not ASSUME this and need to be directly informed….or “spoon fed” this information.

Now assuming these concerns are addressed and a consumer does apply for a loan refinance, GoRefi must treat any customer like the Queen of England. GoRefi closes their refinance process definition with a bold statement:

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I think this is where GoRefi will win (and win BIG) customers or will crash.  As soon as the customer starts submitting the required documents, a GoRefi rep must become the customer’s best friend.  The rep must be available to answer any questions and must keep the customer informed of where they are in the process…at all times.  GoRefi must over communicate.  If not, consumer trust in GoRefi will quickly erode and lender will seem like all the others.

The big question that pops into my mind is can GoRefi afford the headcount needed to bring on these high touch reps? These reps are important hires and they each need to deliver an exemplary customer experience.  After all, GoRefi is striving to transform the lending process with consumers…and I think they are well positioned to do so.


Can Apple Benefit from a Strategic Partnership with PayPal?

The fact that Tim Cook hinted that Apple might be getting into payments is no surprise.  It’s more of a “duh.” Apple has the user accounts, consumer credit cards on file, and millions of iPads and iPhones in market.  The launch of Touch ID and the iBeacon sensor only connect the dots even further.

Apple’s Passbook paves the way for expanding the wallet beyond loyalty cards and into the ability to make online and offline payments. The launch of the Touch ID addresses security concerns and helps prevent unauthorized payments should the phone, or “wallet”, be lost.

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In the online world, it’s not a far stretch to imagine a consumer using their Apple ID to authorize a charge to their credit card for a purchase made on an e-commerce site.  However, competitive pressures from Visa, MasterCard, and PayPal may make convincing e-commerce sites to accept Apple payments that much harder.  One recent article points to Apple making payments as part of the iOS developer kit…which would easily provide code needed for a developer to add a payment feature to their mobile commerce app.

However, the opportunity for Apple gets more challenging in the offline retail world.  Yes, iBeacon creates a network to enable mobile payments through detecting and authenticating a mobile device.  Cool. However, Apple faces the challenge of convincing merchants to adopt the payment processing hardware, dongles, etc.  Google, Stripe, Square, and Dwolla also face this problem, among others. Even with its big brand recognition and marketing strength, Google was not able to grow offline retail adoption of its wallet.

So what are the opportunities for Apple moving forward?  Apple could build its payments business through acquisitions, or strategic partnerships.  Square has been a leading innovator in the payments space, is building merchant adoption and has a strong focus on UI/design given their recent hardware release.  While a Square acquisition may be expensive, Apple would quickly acquire payments processing technology, a growing user base of merchants and a design focused group of developers.  Bloggers have also identified Stripe as a potential, less expensive acquisition.

I think Apple can benefit the most, however, from a strategic partnership with PayPal.  Recently a LOT has been written about PayPal feeling the heat from Apple and pitching to help build out their payment network.  Some people see this as a signal PayPal is feeling threatened.  Yes, the competitive threat is there.  However, PayPal has many elements that Apple needs to be a leader in this category.  I think together, PayPal and Apple can create a break through wallet that defines the mobile wallet.

First of all, PayPal has addressed many of the cross-boarder (currency) trade challenges that Apple will eventually face.  Remember, Apple products are ubiquitous and they face hurdles in every new market they enter. We all know that Apple will not want to limit payments to the US market.

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Secondly, PayPal has a merchant program in place and is regularly improving the product feature set. This in market learning will only improve PayPal’s ability to deliver a solution merchants actually want and can easily adopt.  PayPal is also co-marketing with merchants to drive consumer adoption.

Lastly, PayPal is seen as the “most trusted” mobile wallet brand as defined by a 2013 Javelin study. Why is this important?  In light of the recent data breaches, mobile security will be a big factor for not only consumers, but for merchants.  Yes, Apple’s fingerprint ID is fantastic to access the device and authorize transactions.  However, there is a lot happening in the payment processing back-end that PayPal has focused on securing for almost 20 years. A partnership with PayPal will enable Apple to address this hurdle and avoid a dreaded data breach.  Should the unthinkable actually happen, culpability would most likely NOT fall squarely on the shoulders of the world’s number one brand.


Banks, are you paying attention to what T-mobile just announced?

 

T-mobile just announced that they plan to provide mobile banking services to their customer base.  These services include a pre-paid debit card, a mobile banking app, and a basic checking account.

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Clearly T-mobile is continuing to offer value to their customer base that has signed up for a phone using a pre-paid contract…. and it’s working.  T-mobile is quickly winning customers in the coveted 18 – 35 target market…the segment that is most likely to engage with mobile banking.

T-mobile is partnering with The Bancorp Bank to provide this customer value.  Sprint was the first carrier to partner with Boost Mobile to provide similar banking features to its customers.  These strategic partnerships provide a great deal of value to both partners in the mobile and banking verticals. Many T-mobile and Sprint customers have pre-paid contracts so it’s not a far leap to understand this segment would also see value in a pre-paid debit card and low fee banking products.  The banks providing these services gain access to a mobile savvy customer base that is not being well served by the Top 100 banks.

These strategic partnerships should raise the neck hairs of executives at the remaining mobile carriers and at the Top 100 banks. Yes, Verizon and AT&T are big guerillas.  However, similar to bank sentiment, mobile carrier sentiment is low too.  Consumers are tired of paying high fees for mobile service. However, by providing additional value to a high life time value audience, these carriers can attract customers away from the larger carriers…even if it’s a slow and steady rate.  Remember the tale of the tortoise and the hare?  AT&T and Verizon should consider opportunities that may be available with yet “un-wed” mobile banking providers like GoBank, Moven or Simple. I’m wonder if the pay as you go mobile provider, Ting, is talking with any of these similarly minded banking providers? There could be an interesting partnership there.

From the banking perspective, executives are aware that it’s all about mobile.  Contrary to recent articles touting that top banks are aware of the importance of mobile, it’s well understood that most banking technology innovation will occur OUTSIDE of the banking industry.  I’ve heard this big bank mobile focus described as a mobile arms race.  However, I think banks may need to buy their “arms” from outside the banking industry providers, to continue the metaphor.

Over time, maybe within just 5 years, a young and frustrated segment of customers will be evaluating and switching to banking providers who meet their needs in the most cost effective way through a channel that is most convenient.  It’s no secret that this channel is mobile.

Banking executives must quickly evaluate how they can meet the needs of customers beyond banking and providing special offers that can be found already in a Penny Saver. Because of the negative sentiment towards banks, financial institutions may consider being an unbranded, silent partner where they provide the banking back end and rely on a partner to provide the branded consumer facing front end.  However, could a big financial institution that is used to being the “alpha male” in a relationship be open to playing a more balanced role with an innovative partner?  Over time, the bank’s future as a leading financial institution may depend on this as the coveted 18-30 population ages and mobile banking becomes more ubiquitous. *

* The use of the word “ubiquitous” is brought to you by Starbucks, a brand with retail locations everywhere. 🙂


What Can Bank Social CRM Teams Learn from Ford? A lot!

Last year my wife and I began our search process to find a new SUV. Our consideration set included Toyota, Ford and Chevrolet. I tweeted out one evening that we were considering the Ford Explorer and asked for feedback from my community.  Within 24 hours I received a reply…not only from friends, but also from Ford.  The response included a link to the Explorer’s features and an offer to schedule a test drive. Color me impressed. (Tweet me at @ericdunstan with the 80s movie reference)

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I responded that we were interested in a test drive. A Ford rep quickly responded and offered to schedule a demo and to provide incentives.

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Ford is effectively using social media as a lead generation tool and quickly acquired my information to schedule a test drive.  I used all natural language text with no # or handles. Clearly Ford is monitoring the social media channels and has an effective strategy to capture the information and act on it.   Nice work.

I recently blogged about my frustration with the mobile deposit feature of the Wells Fargo mobile application.  I tweeted my frustration as part of a theraputic venting processes.  Within 24 hours Wells Fargo replied with a tip to address the mobile application #fail and a request for me to call a 1-800 number to address any further issues.

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I applaud Well Fargo for capturing or “hearing” my frustration on Twitter and responding.  However, given the importance of social media as a marketing channel, Wells Fargo’s response is almost a given.  I would imagine that almost all of the Top 100 banks have similar processes in place to monitor and manage the social media channel.  However, I believe Wells Fargo’s response falls short of meeting my customer needs and their social media team could learn a lot from what Ford is doing.

The Wells response was very generic and made me do the heavy lifting.  “Try closing the app and restarting your phone.  If the problem persists, please call 800….”  Duh. Wells Fargo, I’ve been an iPhone user sense the iPhone 3 and know that restarting an app is a quick fix.  However, given the Wells app recent reviews, I think this functionality fail is an application problem.  Additionally, the LAST thing I want to do is call your 800 number to then have to dial through a myriad of prompts to eventually talk with a representative after a several minute wait.

The Ford response was very personal, responded to my specific question, and provided a channel to connect with a representative directly.  Ford made me feel personally taken care of, listened to and treated as a desired customer.  Wells could have worked harder by…

1. Offering to collect my information so an online/mobile customer service rep could contact me directly

2. Having the rep present the option of contacting him or her directly through a Twitter DM to help trouble shoot

3. Providing me a link to their website with a list of known issues

4. Acknowledging my frustration and offering an incentive as a “mea culpa” for their failed application

I feel like my concerns were heard by Wells Fargo, but I don’t feel personally taken care of to ensure my issue was resolved and that I’m a valued customer.  This is an example of the difference between just listening to the customer and engaging with the customer.  By engaging with the customer, Wells has the opportunity to personally respond to my need to show that my customer relationship is valued.  Ford did this so well that we bought an Explorer from them.

Moving beyond just listening to and engaging with the customer may require rethinking how customer support teams are trained and incentivized.  Additionally, companies should consider implementing a social media analytics and engagement software solution.  These solutions go beyond functionality of Tweet Deck that enable users to track multiple accounts and listen for mentions of their company or brand.  The more robust solutions, like Attensity or Nimble, for example, enable companies to listen to the customer, analyze the need and then act on meeting the customer need.

Consumers are increasingly frustrated with their banking relationship. There are a few Internet and mobile only banks, like GoBank or Moven, which take the mobile experience and customer service seriously.  Leading banks, including Wells Fargo, will quickly lose customers should they not learn how to actively engaged with their customers through all channels of customer support, including social media.


Mobile must remain a priority for large banks to retain customers

My family and I received several checks from family members as gifts and as payback for gifts purchased.  My wife typically handles the day-to-day checking account and generally handles making deposits at the nearest Wells Fargo ATM.  I suggested that she try using the mobile deposit feature on the Wells Fargo mobile application.  Being the wife of someone who works in FinTech, she agreed to try out the feature….despite all the negative feedback about the application. Unfortunately,  she successfully validated the negative comments splattered across iTunes.

The biggest disappointment came through the application crashing after each attempt to deposit a check using the mobile deposit feature. What I found most interesting were my wife’s comments after the 3rd attempt. “Well, Wells Fargo, I guess you REALLY don’t want me to use this feature,” was the first comment.  The second comment was “What happened to the pics of the checks I took before the app crashed? Are they stuck in the app or are they with Wells?  Can someone steal the money?”

Three interesting thoughts came to mind as I digested her valid complains.  One, when it comes to getting customers to try new features that involve their money, banks better be sure the feature works for the customer the first time.  Yes, app crashes can happen for many reasons.  Unfortunately, several reviews reflected the same frustration and experience my wife had…which implies that improvements need to be made to the application. From my wife’s point of view, Wells Fargo implicitly told her mobile deposit is not ready for prime time and to keep using the ATM.  Wells needs to track that these customers are and target them with a “mea culpa” CRM program to win back their trust with new technology. After all, according to a recent study, 49% of consumers will change banks for a better mobile experience.

Secondly, I think my wife’s concerns about where the check pictures have gone after the application crashes point to an engrained reaction that stems from frequent e-commerce transactions.  I think similar “where’s my money now?” concerns come up when a consumer enters in a credit card number online, presses submit and the site crashes. “Did my credit card go through? Do I need to re-enter my credit card? If I do, will I get double charged?  Is my card number safe?”  All are common questions following an e-commerce site crash.  I think it’s only natural for my wife to ask similar questions after a mobile banking application fails.  In-application messaging must be delivered immediately to consumers to quell their anxiety when things don’t go as planned.

Lastly, the low application star rating and poor review indicate that mobile is NOT a big priority for Wells Fargo. In an effort to win customers, I would imagine that the mobile team would quickly iterate and redeploy an application as quickly as possible. Unfortunately, Wells Fargo is not the only major bank that appears less focused on winning customers through mobile.  Chase and Bank of America have similarly low rated mobile applications. If these major banks do not step up their focus on mobile, the door will remain WIDE OPEN for innovative mobile banks like GoBank and Simple to entice customers through compelling mobile banking experiences.


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