“Security Freeze” is the New Buzzword in Bank Marketing

LockSecurity freeze is the latest buzzword in the world of privacy and online security. It was used today in the title of an article in The Wall Street Journal’s Personal Journal section, Freezing Out Identity Theft.

Here’s how it used in the first sentence of the article:

In an effort to combat the rapidly escalating outbreak of identity-theft crimes, a handful of states including California and Texas have passed legislation that allows consumers to put a "security freeze" on their credit history.

Action Item
Use this phrase in your marketing to reassure wary customers. For example,

  • "Once you report any fraud, phishing, or identity theft, we will put a security freeze on your bank accounts against any unauthorized withdrawals."
  • "If someone tries to guess your password, we’ll freeze your account against any more attempts."

And eventually as you develop more advanced security preferences, customers will have the ability to put their own selected security freezes or locks on their accounts. For example, users that always access from one computer, could lock-out any access attempts from other IP addresses (see Quova for tools in this area). Or the customer could lock their account against point-of-sale transactions in other states and countries.

To learn more about how to promote online security and customer peace of mind, check out Marketing Security: The sensitive issue of publicizing security and authorization enhancements from our sister publication, the Online Banking Report.

Security Applications may jump-start Mobile Banking

With the ubiquity of personal computers in the United States, the text messaging market has been slower to develop here than abroad. And since most banking interactions can wait until you are comfortably situated in front of your home/work PC, mobile banking applications have not been a high priority.

However, there is a new application that may jump-start mobile phone banking initiatives. Security.

With public confidence in the security of online banking waning, telephones, especially cell phones equipped with text messaging, offer an excellent option for secure two-factor authentication.

Here’s how it works:
1. Log in to the bank the old-fashioned way with username and password
2. A few seconds later, a four-digit number is text-messaged to your cell phone, or voicemailed to your land-line phone
3. Enter the four digits and start transacting

Text messaging can also be used for alerts, reminders, and other services.

But are U.S. users ready for advanced mobile phone features? It turns out the answer is a resounding YES. Would you believe 100 million U.S. users tapped into advanced features during the past three months. That’s a 58% penetration of all 174 million mobile phone subscribers. And two-thirds of the 58% sent or received text messages (37% of all subscribers) .

This fresh market data is courtesy of M:Metrics, a new Seattle-based telecom researcher who based these estimates from usage data complied across 35,000 U.S. mobile phone subscribers.

Not surprisingly, younger users embraced text-messaging the strongest. The penetration rate was above 50% in both the 18-24 year-old (68%) and 25-34 (52%) groups. The lowest penetration was 14% in the over-65 group.

Here’s more details on the advanced usage and percent penetration across all 174 million mobile phone subscribers:

Used at least one service          100 mil  58%
  Sent or received text message     65 mil  37%
  Used mobile email                      24 mil  14%
  Accessed news/info via browser   22 mil  13%
  Downloaded ringtone                 22 mil  13%
  Received text-message alert        15 mil  8%
  Used instant messaging                15 mil  8%
  Sent photo message                     12 mil  7%
  Downloaded display graphic          11 mil  6%
  Downloaded mobile game              6 mil  3%

Source: M:Metrics, March 2005, n=35,381 for quarter ending 31 Jan 2005

Read the full release.

JB

Virtual Open House for your Bank

Open_houseHow many times per month would you look at your bank’s website, other than online banking, if you didn’t work there?

Zero would be pretty close, I’d wager.

Case in point: I have far more interest than the average consumer, but I can count on one hand the times I’ve looked at my bank’s website during the past seven or eight years since its been online.

Sure I login most weeks, but my visit consists of finding the login button as soon as it loads, then moving into online banking to take care of my business. (Don’t tell my website usability collegues I said this, but it might be worth moving the login button around from time to time to "force" users become engaged with your homepage.)

Zero visits per month makes it tough to introduce new products, promotions, and features. Or to get customers to use self-service.

Action Item
To encourage visits, how about an old-fashioned Grande Re-opening or Open House celebration? Make it an annual event on the anniversery of your website launch. Publicize it with signs in the branch. Issue a press release. Drop a statement insert.

Decorate your homepage with balloons or something festive, and just like a real-world open house, offer virtual donuts (Krispy Kreme downloadable coupon), free coffee (Starbucks coupon), and door prizes after customer fills out an online entry form.

To encourage visitors to click further into your site, you could sprinkle freebies deeper in the site, or use an online scavenger hunt. And the great thing about this open house is there’s no cleaning up afterwards.

If you’d like to explore more about the interactive bank marketing ideas, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.

HSBC Right-Sizes Website Fonts

Hsbc_fox_utility_boxDo you get complaints that the copy on your website is too small?

First, make sure that you have not disabled the customer’s ability to control font size from their browser toolbar. This allows your savvier customers to easily change font sizes whenever necessary.

However, for the rest, who haven’t a clue that it’s even possible to change font size, consider adding a utility to your navigation menu that automates the process.

HSBC’s UK website features the above utility box on most interior pages, with the exception being the homepage. Not only can users easily increase/decrease text size (note the use of user-friendly language), they can also print the page or click through to the customer service contact center (itself a model of user-friendliness).

JB

Southwest’s Ding Marketing Direct to the Desktop

Southwest_ding_icon Southwest Airlines, the cheeky U.S. discounter, has just launched a desktop alert system, aptly called Ding, that bypasses the entire spam-clogged email system and delivers alerts to the Windows system tray. It works much like WeatherBug, the popular weather application with more than 10 million users. Southwest_desktop_alerts

When a new fare becomes available, Southwest plays an audible tone and inserts an envelope over the Ding icon in the Windows system tray (see graphic right–click to enlarge). Users can click on the icon to launch the Southwest website and act on the special offer.

Analysis
You’d have to be a real Southwest frequent-flyer nut to want the airline dinging you with messages every day. But since most companies make 80% of their profits from 20% of their customers, this is probably a savvy move from the airline.

Certainly, Southwest knows what it’s doing. And since they do not sell tickets via other online travel services, they especially need this unique corridor to their best customers.

This approach could do wonders for a bank’s online delivery. Instead of trying to wind your way through your customer’s clogged in-box with alerts and marketing messages, drop an account balance alert onto their desktop every day. See Online Banking Report #85, Grabbing Desktop Mindshare, for more information on delivering financial services directly to the desktop.

JB

More Online Fraud Statistics from Gartner

Fruad_solutions_grid_from_gartnerFraud-fighting vendors, Quova and Cyota hosted a webinar today featuring Avivah Litan, from Gartner.

A couple interesting Gartner stats that you can use in trying to gain additional resources to boost your authentication procedures:

  • Within 3 years (YE 2007), 60% to 75% of U.S. banks will use more than username/password at login. That’s up from zero today.
  • In the year prior to Gartner’s April 2004 consumer research, a projected 1.8 million consumers gave up their account info to phishers; this group was three times more likely to have been victimized by online fraud.

You should be able to view an archived version of the webinar at Quova within the next day or two.

JB

More on E*Trade’s Two-Factor Authentication Launch

Etrade_two_factor

Today’s American Banker (subscription required) reported that E*Trade will give security tokens to its high-roller customers, those that trade more than 5 times per month or who have more than $50,000 in their accounts.

As we reported in January, E*Trade has been testing the service with several hundred customers.

The quote of the day is from famed Gartner analyst, Avivah Litan:

However, banks face little risk from trying the technology, which has significant potential, she said. "If they get low adoption, they’re not spending very much money. If they get high adoption, they sell a lot more services. I could see people switching to E-Trade if they offer this type of security."

Analysis
The days of simple username and password access are numbered. Don’t be the last one on your block to install a security system, that’s a sure way to become the target of cybercriminals, and even worse, scathing press reports when customers are victimized.

JB

Quantifying Online Interbank Transfer Volumes

We’ve been tracking the developments in account-to-account transfers closely, in preparation for an upcoming Online Banking Report on the subject. It’s tough to get a handle on the actual dollar volumes, so we were pleased to see American Banker’s quantify the market size.

In Friday’s article (subscription required), MasterCard’s TowerGroup payments analyst, Beth Robertson is quoted as saying that in 2004, $730 billion was transferred via account-to-account transfer (i.e., a funds transfer from an individual’s account at one financial institution to the same customer’s account at another). That amounts to more than $7000 for each of approximately 100 million U.S. households. All but a billion or so was initiated off-line.

But the online portion is growing. CashEdge the leading supplier of online account-to-account transfers, expects to process $6 billion in 2005, that’s about $200 annually for each of the 30 million or so U.S. online banking households. However, fewer than 50% of those households have access to online account-to-account transfers.

JB

Phishing Vaccine for Email in UK

Uk_safe_word_click_to_enlargeIn the United Kingdom, the government has launched an initiative to inform its citizens of phishing and other fraud dangers. One of its key services is an email and/or text message service that informs users when new fraud threats are identified.

To fight the problem of having their own emails spoofed, they require users to select a "safe word" that will be used in the subject line of all emails.

Analysis
Not only is this an effective way to fight phishing, it helps personalize your messages, improving their chances of being read.

JB

Adding Sales Punch to Bank Homepages

Alliance_home_page

UK-based Alliance & Leicester doesn’t accept the premise that banking websites should be drab and colorless. Their orange-and-blue effort shouts "pay attention," perhaps a bit too loudly.

But there are more things to like in this homepage than there are to criticize.

Like

  • Prominent login on left side
  • Strong benefit statements in headlines, for example, 50 times more credit interest than other banks
  • Interactive loan calculator

Dislike

  • Too much animation competing for the eye, for example, four of the banners feature animation, three of which continue to endlessly cycle (if you use animation, make it stop after one or two cycles)
  • Overwhelming, where do you look first?
  • Everything looks like a come-on, where’s the content?

But whether one likes the design or not, the proof is in the results. And I bet the bank pulls in more new business from its home page than its more staid competitors.

However, a bit more restraint might make it work even better.

JB

“My Spending Report” from Wells Fargo

2005 is off to an innovative start, first the launch of Billeo, a toolbar-based bill payment manager. Now, Wells Fargo puts a little sizzle into its online banking steak, with a preformatted spending report, ala Quicken, appropriately named, My Spending Report.

The bank's press release says its patent-pending, which we can only hope is a marketing gimmick.

Here's how the bank describes the service:

…combines spending transactions from a customer's check card, credit card, checking account and bill pay in one convenient place, accessed through a secured, online banking session and updated automatically each day. Electronic and bill payment transactions are organized by familiar categories such as gas/automotive, groceries, ATM withdrawals, etc.

Analysis
We will see more and more innovations around data delivery as banks try to differentiate their online services and add value. The stream of banking data available online is begging to be organized, analyzed, flagged, and reported.

Quicken has been doing it for 20 years, but it's more appealing to many users, especially younger ones, to integrate personal financial management right into banking websites.

Slightly Off-Topic Rant
Despite a well-crafted press release, don't bother visiting Wells Fargo's website today to learn more about My Spending Report. Not only is there no homepage link, the site-search function contains no relevant links either. So much for integrating PR with your website.

JB

If you'd like to learn more about the how personal finance functionality is penetrating online banking, check out Personal Finance Features for Online Banking: Why “My Spending Report” trumps free bill pay on the subject from our sister publication, the Online Banking Report.

Bill Payment Toolbar from Billeo

Billeo_click_to_enlarge Just when you thought the banks were gaining an upper hand in the electronic bill payment battle, up pops a newcomer with a fresh approach. Take a moment to check out Billeo. An odd name, but so is iPod, and it seems to be working pretty well.

We haven’t used it yet, so these comments are preliminary, but "on paper" this company and its approach appear to be winners. (One caveat: the business model is unknown, and the privacy policy is a bit ambiguous when it comes to the issue of adware. We’ll keep you posted on what we find out.)

Billeo is a free toolbar-resident application that plays "virtual assistant," enabling more convenient and controlled direct bill payment at vendor sites. The toolbar also serves as an e-wallet simplifying online point-of-sale transactions.

Analysis
The toolbar contains several unique features, one of which is extremely impressive, the ability to save screen captures of transaction receipts. The application also includes payment reminders, a payment register, and a personal "bill payment" email address for users.

There are several familiar names associated with the startup. Nancy Langer, a former exec at Metavante, is the president. The advisory board includes Eric Dunn, formerly with Intuit, Shankar Srinivasan co-founder of Cyberbills, and Scott Loftesness of Glenbrook Partners.

We’ll dissect the new service in Part 2 of our upcoming Electronic Payments Report in Online Banking Report.

JB

Editor’s Note: Billeo was named "OBR Best of the Web" in the second part of its series on E-Payments (OBR 119) published in June 2005.