A Granting of Grace

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Jeff Dennes has crafted a customer-friendly mobile alert system that helps people avoid overdraft fees.

Jeff Dennes
Huntington Bank
Chief digital officer, online and mobile services director
Latest breakthrough: The bank is tying text and mobile alerts to its 24-hour overdraft grace period program, counter to the strategy of most banks

Huntington Bank's 24-hour overdraft grace period has drawn a lot of attention as a contrarian move - it's a way for the bank to counter the perception among some consumers that financial institutions are itching to collect overdraft fees. What's probably lost on the public is the staggering path that's required to deliver the mobile alerts that help drive the overdraft program.

"If you're on an ATM network and [overdraft], that transaction hits a legacy system at the bank. That system triggers an overdraft message that's sent to the alerts engine, which gets transmitted to the cellphone network, which then sends the text message with the alert to your phone. And all of that happens while you're on the phone at a point of the transaction," says Jeff Dennes, chief digital officer, online and mobile service director for the $54 billion-asset Huntington. "It's hard to produce real-time alerts. Generally you have different systems that have to be queued as the transaction is occurring, and the transaction has to be sent to the system that's generating the alerts."

Tying mobile and text account alerts to the 24-hour grace period - the bank gives customers a day to fix account overdrafts before charging fees - requires tight integration and messaging between different transaction systems and the bank's database and mobile platform. The goal is to produce the overdraft alert close to the transaction that sends the account into overdraft, within a minute if possible, and give the customer options to avoid the overdraft. "If we didn't have a real-time alert it would be hard to enable the product," Dennes says.

Ensuring the smoothness of that integration is one of the challenges facing Dennes and his team. It's a task that has to be done well, since the bank is marketing its grace period as a good-will differentiator. It's giving up some fee income, but reports a decrease in customer attrition and an increase in new accounts in the year or so that the 24-hour grace period has been active. "Our customers are looking to the idea that we're practicing fair play in making sure that we aren't charging overdraft fees," Dennes says.

Brad Strothkamp, a principal analyst at Forrester Research, says while most banks have adopted mobile alerts for balance queries and other basic financial information, Huntington's use of alerts to warn of overdrafts, while giving consumers an option to escape the overdrafts, is a great example of the power of digital alerts to give customer service a boost. "It's fantastic and it's innovative because there are a lot of banks that don't do it because they don't think about it, or they think it may have a negative impact on revenue," he says.

Mobile overdraft alerts are one of a number of mobile banking initiatives that have been undertaken by the bank in the past year, or are planned for the coming year as Huntington ramps its digital banking game into high gear after a slow start. Dennes joined Huntington from USAA two years ago to develop a road map for mobile and other remotely accessed financial services. The bank has since launched the alerts; apps for iPhone and Android; an iPad app, optimized for iPad users; and a redesign of the bank's website. "We came out with the iPad and Android apps with just a few days apart, it was a far cry from 2010 when not a lot of work was done," he says.

In less than a year, the iPhone app got more than 80,000 downloads, the Android app was downloaded more than 75,000 times and the iPad app got nearly 30,000 downloads in just a few weeks this spring. A mobile remote deposit capture app is in the works in the coming months.

Dennes is also working on speed to market for new digital banking products. The bank is using code from Kony to create a single interface that can create a single application for a financial activity, then repurpose that for various Web and mobile channels. "It's all about making it work on a three, nine or 12-inch screen," he says.


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