It has come to this: A California community bank aiming to pick up a national customer base has started a Web bank for pet owners.
Instead of listing, say, its checking account rates or credit card products on its home page, Petloversbank.com shows a fetching photograph of its pet of the month, a Himalayan-mix cat named Honker (who likes to talk and greets his canine pals with a meow ).
In the past year or so several companies have come to believe that Internet banking can work if it is segmented the right way. Thus there are now Web banks for women, people who own BMWs or recreational vehicles, for gays, and for fans of the rock star David Bowie.
Some observers scoff at the more farfetched examples, but the bankers themselves say they can and will do good business.
These include executives at Petloversbank.com, a venture of $512 million-asset Foothill Independent Bank of Glendora, Calif., near Los Angeles. Petloversbank.com plans to bring in low-cost deposits beyond its branch area by becoming nationally known as the bank for pet lovers.
Pet Lovers Checking was introduced in March, and hundreds of accounts have been opened, said Dena Garvin-Smart, the vice president and director of marketing at Foothill Independent. The Web site went live in mid-July.
Ms. Garvin-Smart said consumer response to Petloversbank.com has been amazing. and that a number of Foothill Independent customers have signed up for the service, which links to Foothills Web site. Checks bearing a picture of the customers pet have been especially popular and have so far featured the likenesses of dogs, cats, exotic birds, and even an iguana but no llamas or potbellied pigs yet, she said.
The concept has its doubters.
Im struggling to see how people in the pet area, as a community, would have compelling financial needs that are unique, said James Van Dyke, a research director at the New York consulting firm Jupiter Media Metrix. This might be a fun endeavor for the principals of the parent bank, but as far as being a good business proposition, its hard for me to be convinced.
A report by Mr. Van Dyke released last month said pure-play Internet banks can better their odds of success by concentrating on affinity audiences with unique financial services needs. He pointed to BMW Bank of North America, a branchless institution that offers card products, insurance, and auto financing; and to Affinity Bank, which caters to retirees who travel in RVs, and offers telephone banking access and discounts on automated teller machines.
By contrast, Mr. Van Dyke said, Petloversbank.com has flaws similar to BowieBanc.com, a private-label operation run by USABancShares.com it targets people with shared interests but not necessarily common banking needs. Moreover, he said, trust plays a big part in peoples selection of a financial institution, and a strategy that counts on simply a shared taste does not have that foundation.
Foothill Independent, however, says the skeptics underestimate the strength of the sentimental value behind the concept.
People are looking for new ways to celebrate the love they have for their animals, Ms. Gavin-Smart said. We felt we could put together a banking program that addresses the joy people feel for their pets as well as their banking needs.
The bank cites statistics from the American Pet Products Manufacturers Association, which says the pet industry is expected to generate sales of $28.5 billion this year, compared with $17 billion seven years ago.
According to the American Pet Association, there are more than 136 million dogs and cats in 75 million U.S. households, and the number of pet owning households is expected to rise 10% by 2010.
Before establishing the pet lovers concept, Ms. Garvin-Smart said, bank executives visited pet industry trade shows. Seeing the range of products and services from aromatherapy to designer doggy duds helped sell them on the idea.
Foothill Independent is donating 25% of its yearly fee income from the Web site to nonprofit organizations that promote animal welfare. It bank has also hosted adoption events and struck partnerships with nonprofits in the community.
We were looking for a way to launch an e-commerce initiative, and we felt that the only way that we could compete, because we are a regional bank, would be to develop a niche strategy, Ms. Gavin-Smart said. The concept came from our own people just us being pet owners and doing a little research and development on the pet-owning demographic.
