June 20th, 2012 – In 2008, when Wells Fargo announced their vsafe product, it was met with little fanfare. The same held true when they announced four years later, that they were dropping vsafe for good due to a lack of consumer interest. The banking giant was charging customers $4.95 a month for the ability to upload and store electronic documents. In a 2008 blog written by John Stumpf, President and CEO of Wells Fargo, touted the advantages of the virtual safe deposit box. “While grandmother’s diamond ring can’t be physically placed inside Wells Fargo vSafe, a photograph of it can be uploaded for insurance purposes-along with 1000s of electronic copies of other important information.” I thought they were on to something.
Too bad this did not prove to be a winning solution for Wells Fargo, but I give them credit for going out on the skinny branches to try and generate additional fee income. Now, more than ever banks and credit unions need to go out on the limb to remain competitive. The banking industry is certainly at a crossroads. The digitized world does not necessarily need the physical world of branches to survive, yet the branch continues to be a must have for individuals when considering where they bank. Most bank branches no longer have large, expensive vaults for consumers to store their valuables. Perhaps because nowadays people can store most valuable information electronically, then purchase fairly inexpensive home safe’s to store jewelery and other physical items. But this does not mean that the branch can not play a integral part of the multi-channel experience nor does it mean that the banks can not profit from helping customers organize their important documents.
If we look at the book industry, it might serve as an example for banking. The book industry built out these large superstores, replacing the corner bookstore. They attracted people with the lure of hot coffee smells, a huge selection of modern and classical novels, and an affinity programs for loyal customers. It then all went wrong when Amazon started selling books online, and people were able to bypass the bookstore and have their books delivered directly to their homes. Then, when the eReaders came into existence, it changed the landscape even further. We went from having a physical book, to reading electronically – physical to digital. While one can argue which is better to have on the beach, there is no denying the push is on to digital content. Barnes and Noble, like most banks and credit unions, has lots of money invested in stores and real estate. The met the digital match head on by launching their own eReader and integrating the physical and the electronic experience in their locations and online, providing a true multi-channel experience. The banking industry, like the books industry, should look long and hard at their current business models and determine how best to offer digital and physical to their customers.
It is a shame that Wells Fargo had to give up on this service, perhaps they are just too far ahead of their time. I do believe at some point people will be looking for ways to store all their digital content in the cloud with a trusted advisor. No better place for most to turn than the highly regulated banking industry. The solution however would need to be easy to use and provide a true value add. Many people for example would not be comfortable or understand how to turn paper documents into electronic ones. This is where this service could be offered by having individuals come into the branch for assistance with converting their documents in their local branch. After all, would you rather trust and store your tax documents, your last will and testament, and your cherished baby photos with a 100 year old bank with a physical presence or with a 3 year old Silicon Valley start up firm with a website and a toll free number?
Article found here.