Have you ever wanted to order just one favorite channel from your
cable provider? Fat chance-you nearly always have to take a package
stuffed with channels you'll never watch and don't want to pay for. But
Union Bank's Art Smith thinks his bank has learned from cable's
obstinate approach, and says consumers seem to appreciate a program
unveiled last October: "Banking By Design."
marketing officer at the $87 billion-assets national bank, says its
research indicated that consumers wanted transparency, control, and
choices in their bank products. For a long time, banking products,
especially on the retail side, have tended to be combinations of
products, with all-in-one pricing.
Union, which does business in
multiple states but is based in San Francisco and covers much of
California, launched a website, www.bankingbydesign.com, as the first
stage of a new approach. The website permits retail customers to tailor a
checking account to their own needs, preferences, and habits. They do
so by picking "tiles" representing pricing options and account features.
If they don't want something-paper statements are a $1 per-month
option, for instance-they can leave a tile unpicked. In some cases,
where features go best together, or are often chosen together, the page
will prompt the customer to add a choice. Prompts also suggest
money-saving choices that the customer might have missed.
told, there are 16 options, and once customers make their final
selection, they receive a "Banking By Design" code that allows them to
go back in and make changes. Smith believes that giving customers
choices synchs well with the bank's relationship-banking approach, and
stresses that while the website is very interactive, a banker can still
be reached to render human assistance.
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After the customer designs
the checking account, the expected monthly fee-if any-is computed and
displayed, along with a features summary. Some combinations don't
involve recurring charges, while others do. (The base price of $3 is
waived if the customer makes at least one direct deposit of $250 or more
While he won't reveal specific results since the
fall 2012 launch, Smith says, "it's done really well so far," both among
newcomers as well as established customers.
Over 2013, the bank
will develop the next stage of "Banking By Design," a group of services,
including credit products, for the mass affluent. And in 2014, the bank
plans to bring this approach to business banking.
customers who don't fit the target market-the kind of people, say, who
don't like diner menus that offer too many choices? Or people who are
fine with pre-packaged cable service? For them, Union Bank plans to
continue to offer bundled accounts. Smith says the bank aims to please
all customers and prospects.
— Steve Cocheo, executive editor & digital content manager
[This article was posted on February 1, 2013, on the website of
ABA Banking Journal, www.ababj.com, and is copyright 2013 by the
American Bankers Association.]