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Banking By Design: Unbundling Checking Accounts

Customers of Union Bank can build their own checking accounts from a menu of a la carte options. A simple point-and-click interface give customers total control with transparent pricing.

Most contemporary fee models in retail banking rely heavily on the concept of “bundling” checking products — blending a balance of features that consumers want against the institution’s profitability.

Union Bank has decided to shirk convention however, and has completely unbundled its checking account. With “Banking By Design,” customers are free to create a checking account that fits their needs. Customers can pick from a range of optional features, each with explanations and associated costs clearly visible.

Consumers can design their account at, and after customizing it, they can call, visit a branch, or continue online to open the account. Accounts can also be tailor made in a Union Bank branch with the help of a personal banker.

The minimum balance to open is $100, and the base cost of $3 per month can be waived if the customer makes one direct deposit of $250 or more each statement period.

Customers are free to change the options on their account at any time.

Banking By Design was created in direct response to consumer research and demand for control and transparency in their banking,” said Pierre P. Habis, Senior EVP at Union Bank. “Today’s consumer expects the ability to customize the products and services that are important to them. They made it clear that they want a fair value exchange. They only want to pay for what they need.”

( More on Banking Product Innovations: Cool Bank Microsite: ‘Card Artist’ )

CO-OP Financial | eBook: Payments Disruptors, Innovations & Trends

Menu of Account Options

Union Bank’s Banking By Design menu has 15 options. Most are tied directly to the design of the checking account, but a couple options are more about cross-selling (not that there’s anything wrong with that).

If you choose the most expensive option every time, you’d be paying $21.25 per month for your account, but that would include a large safe deposit box, unlimited premium checks, a money market account and some other perks — and that’s only if you didn’t make the $250 minimum direct deposit to get the $3 base fee waived.

1. Debit or ATM Card (both free) – It seems a bit strange that consumers would even want a pure ATM card these days. A better choice would be Debit vs. Prepaid — those are the two popular options these days. Then at least the bank would get interchange revenue with either card a customer chooses.

( Read More: Checking vs. Prepaid Cards: Threat or Opportunity? )

2. Expedited Card Delivery – They charge $1 per month for this service, which seems like a strange way to bill. It’s a one-time service so it should be a one-time fee. What happens in a customer’s second or third year? Would they still pay $12 for a card they had delivered in their first year?

3. Express Phone Customer Service – For $1 per month, customers can get priority access to a live banker whenever they contact the call center during normal business hours.

4. Account Statements – Free online statements or paper statements for $1 per month. This is a good way to transition from free to fee with printed statements, and a great way to force consumers to enroll in online banking (also known as “right channeling”).

union_bank_banking_by_design_ad5. Online Banking (free)

6. Online Bill Pay – If you want online bill pay, it’s free only until the end of the year, then it costs $1.50 per month.

7. Mobile Banking (free) – You have to sign up for online banking first before you can get mobile banking.

8. Email Alerts – Free, but requires enrollment in online banking.

9. Text Alerts – Free, but requires enrollment in online banking.

10. Use of non-Union Bank ATMs – For $3 for month, Union Bank will waive its fees and rebate other banks ATM surcharges for the first two transactions per statement period.

11. Add a Savings Account – Choice between a regular savings account and a money market account, both for $1.50 per month.

12. Unlimited Checks – Regular checks cost $1 per month, while an unlimited supply of “premium” grade checks costs $1.75 per month.

( Read More: Should Banks Charge Fees For Check Writing? )

13. Money Orders, Traveler’s Cheques and Cashier’s Checks – You can get an unlimited number of these more exotic old school payment tools for $1 per month.

14. Safe Deposit Box – A small box will run $2 per month, a medium box is $5 and a large box is $6.50.

15. Wire Transfers – Unlimited inbound wire transfers to your account for $1 per month.

CO-OP Financial | eBook: Payments Disruptors, Innovations & Trends

The Interface

The interface at the Banking By Design microsite is fairly intuitive — just point-and-click, with little “information” links if you have any questions along the way. Once you’re finished, you can choose to continue to open your account online, in a branch or over the phone. The whole process is pretty smooth.



( Read More: Bank Switchers Who Love Checks Willing to Pay More Fees )



( Read More: Consumers Confused By Checking Disclosures Riddled With Landmines )

TV Commercial by Design

Union Bank asked people to help design TV spots to help promote their new checking account. Participants could select from a collection of pre-shot video clips — all very zany. Users picked the clips, where to edits and set their production to the music of their choice. There were over 40,000 possible video combinations in all. Once they were finished, they could upload their video where others could vote on it. Three winners had their versions of the commercial aired on TV.




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Digital Banking Report | Challenger Bank Battlefield


  1. What a great example of how Union Bank has aligned people, product and process ( As I discussed in this recent webinar, we are living in a “Me” economy (

    It’s all about the products I want when I want them… not the products the bank or credit union offer. Remember people wake up and say I need a car, not I need a car loan.

    Seth Godin expands on these thoughts in his book “We Are All Weird: The Myth of Mass and the End of Compliance”. He goes onto to explain that in today’s environment, we have the ability to choose what we want and don’t want.

    I like how Union gave people an opportunity to take ownership in creating and crafting the TV spots. This helps the community be part of the product positioning and reinforces aligning people and product together.

    Lastly, the UX on the microsite is highly simplified. Now when shopping for a checking account I can customize it just like I can when shopping for a car. It’s all about simplifying the solution:

  2. Providing options for consumers is always important. The concept of designing your own bundles can be very attractive for some consumers; however, the financial institution would also satisfy other consumers if they also had some foresight to use analytics and consumer behavior data to anticipate needs. If the idea is to acquire as much of the consumer relationship as possible as a means of creating loyalty, bundles are quite effective!

  3. Mike Branton says:

    I totally concur with the concept of giving the customer what they want and providing options, but Sean is exactly right – bundle the right stuff and they will buy it.

    A la carte pricing was tried before in the 1980s and failed because banks charged “nickels and dimes” for nearly every basic service and/or had weird pricing like what was mentioned above.

    Maybe this time will be different, but it seems that the banks that are trying it (and publicizing it) aren’t getting the results (fee income) that consumers say they want and will pay for, but rarely follow that up with action. Here’s an example of this:

    The specific excerpt from this article addressing this:
    “Officials from Frost and Union Bank said they rolled out the new pricing (a la carte) to provide customers with more transparency and control, not generate additional revenue. They said that they expected the new accounts to be profitable, but declined to say by how much.

    Since introducing its version of a la carte checking earlier this year, called Banking By Design, Union Bank has signed up 7,500 customers. The account has a base monthly fee of $3, which is waived with at least one direct deposit per statement period of $250 or more. The company has about one million customers with consumer-checking accounts.”

    It will be a real challenge to get consumers to pay for traditional banking services, bundled or a la carte. I would say that Frost’s “no comment” about its a la carte profitability and Union’s .75% account penetration (7,500 out of a million accounts) of this type of account is early (but revealing) evidence that it will be an uphill climb to make this type of checking pay off when it relies solely on traditional bank services.

    A la carte or bundled, you have to give the people what they want and will actually pay for.

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