Banking Review

Credit crunch drives savings innovation

The credit crunch and subsequent pressure on financial services marketers to raise deposits from customers is proving a real innovation driver.

Last month, we reported on ING DIRECT’s moves to enable online identity verification, and more recently we’ve seen a shift in the type of deposit products on offer, for example CommSec’s integrated trading and cash management solution.

Now a bank in the US has moved to take on the growing number of start-ups that are helping consumers integrate their personal finance information in one place.

PNC Bank has combined a fee-free transaction, savings and high-yield account in an online offering dubbed PNC Virtual Wallet.

This combination of products is not new, but it’s the added tools and services PNC has provided that makes the offering innovative.

The account comes with a calendar that allows customers to track their payday, bill payments and “danger days” when their account might be at risk of becoming overdrawn. Customers can also set up a wish list of items they are saving for and track their progress against the goal. Transferring funds between accounts can be done by sliding a visual “money bar” that does a good job of taking away account jargon and simply assigns funds to three categories – scheduled out, free, and reserve.

PNC has also introduced the term “punch the pig” for its tool that encourages customers to set up regular transfers to their high-yield savings account.

Start-ups Jwaala, Wesabe and Mint take the concept one step further by giving consumers insight into their transactions across all the institutions they bank with.

The difference is PNC has set about building loyalty to its brand by developing consumer friendly tools and a promotional website that is clearly targeted at Gen Y.

I wonder if we’ll see similar offerings from Australian institutions looking to carve out a new market for deposits?