Comparison-Shopping Sites Expose Banks' Digital Achilles' Heel
Later this month, a handful of lenders will lose a lead generator from Google, but could the lenders be part of the reason the service never took off?
The tech giant is shuttering its Google Compare service, which allowed consumers to compare credit card and auto insurance offerings online. The company has said it is focusing more intently on its AdWords, the primary way companies advertise on Google, and other innovations.
Those efforts "will enable us to provide fresh, comprehensive answers to Google users, and to provide our financial services partners with the best return on investment," Google Compare said in an email to its partners last month. The email was obtained by and published on Search Engine Land.
Free credit scores are so seven years ago. Credit Karma, an educational site for consumers that makes money from sending customer leads to lenders, is now publishing free full credit reports on a more frequent basis. The idea is to better educate borrowers who are in the market for credit while collecting better leads for its bank partners.July 30
Manilla was a hit with technology critics and had a loyal base of customers, but what it really needed to gain widespread acceptance was a bank partner.May 13
Many banks will need to invest in making their websites render nicely on smartphones after Google started to favor "mobile-friendly" pages in determining what content comes up first on its search pages.April 28
The comparison site had its challenges — it didn't offer a particularly innovative product to differentiate itself from the other comparison sites. Nor did it take full advantage of its advanced data analytics capabilities to distinguish itself, observers say.
"Google Compare was an interesting idea that really did not go anywhere," said Donald Light, a director in Celent's North America property and casualty insurance practice.
Nonetheless, lenders may share some of the blame in the difficulty in making a comparison site compelling because of the disparity between the user-friendly experience on sites like Google Compare versus the drop-off in quality users could face once they were directed to some lenders' sites. Google declined to comment on questions about lenders' sites.
"There's a real disconnect there," said Tansley Stearns, chief impact officer at Filene Research Institute.
In September 2012, Filene, the think tank for credit unions, ran a test that featured 44 credit union credit card offers on Amazon.com in a similar way lenders featured credit cards on Google Compare. After consumers clicked on a product featured on Amazon, they got redirected to a lender's website. But that's where things got ugly. Lenders advertising their credit cards on the site could still require consumers to pinch and zoom their way through the process, or worse, send in physical paperwork if not come into the branch to finish the process.
"It was sort of a wake-up call," she added.
The test uncovered other hurdles, too, said Rob Rubin, who worked on the Filene pilot and is a managing director at Novantas. Not all leads qualified for the credit product they clicked — a challenge any lender paying for leads on comparison sites could encounter. By the end of the 14-month pilot, Filene found less than two applications were approved on average for every 100 leads from Amazon's credit card marketplace.
This problem is only intensifying as consumers increasingly research financial products on their phones. Mobile Strategy Partners, a firm that sells mobile account opening technology, estimated in April that digital abandonment rates are upward of 80%.
Yet mobile searches for financial terms related to products like mortgages and credit cards are growing 48% year over year, according to Google data from January 2015.
For some financial services comparison sites, mobile is already their main source of traffic.
Take Credit Karma, a Google Compare competitor that consumers visit to obtain their credit scores and view offers, for example. It is among the recommendation services that already claims the bulk of its traffic on mobile devices.
"Most people don't sit down an hour a night to figure out their finances," said Ken Lin, chief executive and founder of Credit Karma.
Instead, they search for things on their phones while, say, waiting to buy a coffee or get a car repaired.
Credit Karma, which is ranked as one of the top free finance apps in iTunes and spits out leads to banks, is mobile friendly. But that does not mean its partners necessarily have mobile-optimized loan applications yet.
Ultimately, Lin hopes his personal finance service, which counts more than 50 million members, will continue to help people figure out the best products for them in a more streamlined way than banks can offer.
As the tech company continues to work toward what Lin calls the "next frontier," institutions have been simplifying some of their cumbersome online applications.
Filene's Stearns said financial institutions have made some progress since the Amazon pilot. Yet, there's certainly work ahead, including refining the basics.
Stearns urges institutions to stop listing their credit cards under loans — consumers don't regard them as such — and to make the application call to action easy to understand via big and bold application buttons on their websites. She also recommends banks adopt a technique from Domino's Pizza: display a tracker that visually shows how much longer it will take to get something. Rather than a pepperoni pizza, institutions will show applicants where they stand in the application process.
"We've got to make it fast, simple and easy," Stearns said.