Posts by Ed Kountz from May 23, 2008

Ed Kountz | May 23, 2008, 11:58 AM
Pariter a Shakeup

Wells and BofA shook up the online payments world this week, announced joint support for Pariter Solutions LLC, which will process ACH originations for both institutions, as well as ‘on-us’ ACH transactions between the two.

The size of both firms in ACH volumes indicates that such a move would impact in the total volume handled by the existing ACH networks, giving Pariter leverage against the current players, as well a purported advantage over small banks. That talk was reinforced with the news that Pariter’s principals are considering pitching the service to other banks, potentially altering the current environment even more.

It’s not clear that that will happen…certainly not guaranteed. Both Wells and BofA would still need the Fed and EPN networks for non-on-us transactions, which is growing business in itelf. Still, what seems clear to me, is that Pariter has an opportunity to participate in an unusual way. With two major backers—and potentially more in the future—the firm could develop a branded online payment alternative around ACH, particularly targeting the increasing online usage of debit and PayPal, which we've noted with US young adults.

Ed Kountz | May 23, 2008, 11:28 AM
Widgets - What is the Appropriate Unit of Production?

A few thoughts this morning.

I’ve had several inquiries recently regarding the appropriate role for widgets in financial services applications. JR will be publishing a report on the topic a bit later in the year…and in the interim, looked at consumers’ interest in what we believe will serve a similar purpose--watching financial videos online.

LINK

Most we see still tend to be horizontal (focused on networking applications like adding videos or other content to a social networking site). Still, some have made a marketing and information-delivery appearance elsewhere, including in financial services. Beyond the downloadable American Express account-update applet piloted about a year ago, the PayPal payments plug-in is now on the market. And in terms of web widgets, leading institutions are exploring use of interactive web tutorials for card selection (Citi) and DDA account choices (Wachovia) which meet the strict definition of web widgets.

--By way of definition, we define “widgets as both the “web widget” variety (small self-activating applications accessed online) and the “downloadable widget” type (applets that must be downloaded to a user’s computer, and updated via the Internet, to be usable).

It’s still difficult to get a bead on what constitutes a positive campaign result, in terms of Click-Through Rates. We’ve spoken with firms who considered CTRs of 5% as quite respectable, and a few (such as the pre-ATT Cingular Sounds campaign) which was quoted with a CTRs of greater than 10% on its “Show Your Movies” widget. But the ball is very much in play, as is the search for a definition of what IS the appropriate measurement metric (Momentum vs. CTRs...you know the story).

Tell us what you’re seeing. If you’ve experienced similar, or different, results with your financial industry widget, update me – ekountz@jupiterresearch.com

What is clear is that both widgets and online video can fill an interactivity gap quite effectively, and should be used in tandem. Appropriate targeting of consumer segments, and topics, is essential.

Topics centering on security/ trust on the one hand, and interactive primers on / strategies to succeed with retirement, savings, mortgage and other products on the other, are essential. Banks have an opportunity to assist consumers with understanding the changes in today’s market, and to become their point of contact when reallocating assets to do so.

Monday is the Memorial Day holiday. Reflect.