The Envelope, Please: BankInnovation Awards of 2009

Banking innovation? In 2008? Was there anything but the credit crisis last year?

In turns out there was, in fact, innovation in the banking world last year, with some of that innovation coming in the face of a daunting banking market. We proudly present the first annual BankInnovation Awards of 2009 to recognize those achievements.

Our goals are your goals: to improve banking for industry professionals, consumers, and the U.S. economy. We hope that these awards shine a light on the positive efforts taking place within banking – particularly when there is so much negativity surrounding the banking industry.

We offer six categories of BankInnovation Awards, in order of importance: Best Community Service, Best Innovators, Best Marketing, Best Strategy, Best Blogs, and Best Technology. We are sure there are other initiatives or accomplishments that deserve notice. In fact, we hope you’ll shine a light on them in comments to this post.

Congratulations to all the winners. Each of you, in your own way, rose above the tumult of the credit crisis to do something noteworthy. We hope those efforts bode for a better 2009 – for everyone.

Best Community Service

Bank of America’s Center for Future Banking

The whole industry is in a pickle since the credit crisis intensified last September. The majority of banks look like paupers taking government handouts. It is perhaps the ultimate understatement to say banks need fixin’. That’s where the Center for Future Banking at MIT comes in, a Bank of America-funded project launched last year. The Center is charged with the job of figuring out tomorrow’s banking paradigm. So far, the Center has been enlightening. Whether the center’s scholars will truly tell it like it is remains to be seen. Meanwhile, the Center for Future Banking merits a BankInnovation Award for 2009.

JPM’s Guns for Debit Cards Program

Reach for the sky, er, debit card. JPMorgan Chase last year started an innovative program to trade debit cards of up to $200 for guns. The bounty: nearly 700 guns off city streets. Ridding those guns from the streets will literally save lives. Kudos, JPM.

Amex’s Members Project Charity Competition

American Express’s Members Project really hit its stride in 2008. Members Project is essentially a competition, with visitors to MembersProject.com voting on the charities that should receive a total of $4.9 million of donations from American Express. About 1,500 projects joined the competition last year and tens of thousands of people voted. The 2008 winners were certainly meritorious, as is Amex for this charitable community effort that truly got people involved. We proudly present American Express a BankInnovation Award for 2009 for its noble effort.

Best Innovators

Sheila Bair, Chairwoman, Federal Deposit Insurance Corp.

At least she is trying. The chairwoman of the Federal Deposit Insurance Corp. was an early advocate for action when the credit crisis hit, and she has certainly displayed a great degree of expertise and determination, even if we see her loan-modification program as incorporating a degree of Pollyanna hopes. She may be a government official, but she has acted like she cares – and for that alone we award her a BankInnovation Award.

Timothy Geithner, President, Federal Reserve Bank of New York

Like Sheila Bair, Geithner obviously cares. He has emerged from the credit crisis as perhaps the lone member of the Bernanke-Geithner-Paulson troika largely unscathed from criticism. His nomination to head the Department of the Treasury exemplifies his centrality to the government’s response to the credit crisis and the high regard he is held among the upper echelons of the banking industry. We applaud his achievements in 2009 with a BankInnovation Award.

Best Marketing

Umpqua’s “Wish Upon a Star” program

Lani Hayward, executive vice president of creative strategies at Umpqua Bank, sums up the bank’s mantra this way: “If you lead with service, the sales will follow.” Umpqua’s “Wish Upon a Star” program is a perfect example of that, which is why we award the bank a BankInnovation Award for 2009. The program grants holiday wishes to those in need. By focusing on service, Umpqua is creating a profound and very much customer-focused marketing dynamic. That’s no wish; just reality.

TD Bank’s Affinity Program

TD Bank’s Affinity Program is cut from the same cloth as Umpqua’s “Wish Upon a Star” effort. TD Bank invites charities to solicit customers for the bank in exchange for donations that amount to a cut of the action. If the charity scores more than 50 accounts, TD will give it an annual donation. Specifically, TD Bank gives the charities 50 basis points of the average balance on all checking accounts and 25 basis points of the average balance of all savings, money market and retirement accounts, as well as other interest bearing instruments. In this one effort, TD Bank is doing good and doing good business. What could be better?

Best Strategy

PNC Bank & US Bank for In-Store Retail Strategy

PNC Bank and US Bank share this BankInnovation Award for equally pressing forward with their in-store retail strategies. For example, PNC in October inked a 10-year in-store deal that puts it in about 220 Giant supermarkets in 2009. US Bancorp, meanwhile, has fallen – in the words of its chairman, president and CEO, Richard K. Davis – “in love” with in-store banking. By the end of this year, there will be nearly 740 US Bank branches in stores across the country, a 23% increase over the yearend 2008 total. There’s plenty to criticize about in-store branches, particularly their customer usage levels and the reality of their cross-selling rates, but how can you criticize getting paid to promote your brand in perhaps the most central commercial exercise for human beings: where they shop for food? Richard, we love it, too. Enjoy your BankInnovation Award for 2009.

Best Blogs

InstitutionalRiskAnalytics.com

Like scotch, I want my blogs to have character, a bit of I’ll-tell-you-the-real-deal to them. InstitutionalRiskAnalytics.com has that, and then some. Yes, I know IRA uses its blog to sell its risk data. Who cares? The ideas Chris Whalen, IRA’s author, offers up are so insightful and consistent (if a bit short) that I’ll forgive the marketing aspect of the blog. The real complaint I have about IRA is that the site is ungainly to navigate. But that’s cosmetics. The blog’s insights are sound and they more than deserve a BankInnovation Award for 2009.

Alea

When you think of blogs, you often think of fleeting rants on Britney Spears and motherhood. Alea is the exact opposite. With almost remarkable calm, Alea consistently conveys the reality of financial services using hard, cold – and very real – numbers. It is this calm and collected approach that makes Alea almost frightening to read. Often, Alea will post nothing more than a graph as a blog post. You look at a graph of say, CDS outstandings, and think immediately of the future of your children. Often, Alea, which is written by someone who goes by the nickname “jck,” will just let the facts speak for themselves. Consider this blog of Dec. 9, under the heading “Negative Rates for T-Bills”: “U.S. sold $32 billion in four-week bills at a record low yield of 0%. Reports of trades at negative 5 bp on the 3-month bill, currently negative 1 bp.” That’s the whole post, and there doesn’t need to be another thing said.

Best Technology

BankSwitcher.com

We applaud any web service that aims to make it easier to transfer consumer banking data from one institution to the next. There is not a thorny challenge to true consumer shopping than data entrapment. We can’t say BankSwitcher.com is perfect, with security being a big question mark. Nevermind that. BankSwitcher.com is the Knight in Shining Armor for every banking consumer, which is why we bequeath thee a BankInnovation Award for 2009.

FinanceWorks

The accolades that have rained on Mint.com since its launch seem to imply that no personal finance web site could be better. But what if every banking site could be Mint.com? That’s the central idea behind FinanceWorks, and we think that is super cool – certainly cooler than just one Mint.com. The service comes from Intuit (or, for all you old-timers, the former Digital Insight), and it is a fine attempt to universalize the community aspects of Mint and the like. FinanceWorks represents a good first step for traditional banking.

MyMobileMoney.com

Much of the mobile banking revolution has been occupied by fringe players that have gained mainstream acceptance, more because no other apps were available from the big-time mobile companies. Sprint is changing that with its offering of MyMobileMoney in 2008. MyMobileMoney’s central advancement is a cash transfer feature. It’s not just balance notices via SMS anymore. Verizon, can you hear me now?

Again, we offer our congratulations to all the winners. We look forward to more innovation — but perhaps a bit less “excitement” — in banking in 2009.

Sincerely yours,

The Editors