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.”

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.

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.

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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.

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.



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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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