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Gold Credit Report Package from Equifax

By Jim Bruene Posted on November 30, 2004
Categories: Credit Reports & ID Theft Protection, Premium-level Products

If you are looking for ideas on how to create a steady stream of fee income from your online presence, look at how the credit report marketers have continued to command premium prices even as the government mandates annual free credit report access.

We like Equifax ‘s approach. A laundry-list of features and benefits divided into a GOLD and SILVER offering. Gold, at $100 per year provides little more than Silver at $50 per year, but with a 30-day free trial, why not give it a try. Cleverly, the cheaper Silver plan does NOT have a free trial period. Many consumers will check out the Gold and never remember or bother to switch back to Silver.

By the way, we first heard about this offering through a banner ad on eBay in June.

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Easy Anti-Phishing Defense for Banks

By Jim Bruene Posted on November 26, 2004
Categories: Security & Privacy

With phishing reaching epidemic proportions (see chart), you need to look for ways to reinforce the authenticity of your website. Few banks have adopted one of the simplest trust building tools: greeting customers by name. This is simple to do through site registration and cookies. Online retailers have been doing this for years, it's time banks jumped on the bandwagon. Once registered, when accessing your website, either through an email link or via direct surfing, users will know they've come to the right place.

For more information on anti-phishing defenses, read OBR 102, No Phishing: Enlisting users in your battle against fake emails

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U.S. Bancorp’s Stingy Email Storage

By Jim Bruene Posted on November 25, 2004
Categories: Alerts & Messaging, Service, US Bank

Usually we discuss innovations, this is an exception. We’ll call this a non-innovation, non-ovation for short.

In a time where all the huge Web-based email providers, led by Google’s free 1 GB of storage, U.S. Bank decides to delete emails sitting in customer in-boxes (within their online banking platform) after just 30 days. This includes estatement notifications.

Assuming the average customer gets one message per month, and each message is 2k in length, that saves about 20k in storage costs per customer, compared to keeping the messages for one year. Assuming the marginal cost for disk space is $10 per GB, that policy change will save an awesome 2 one-hundredths of a cent per customer per year, or $200 per 1 million customers.

Extensive online archive space is one of the biggest benefits of banking online. Don’t be pinch pennies on one of the lowest-cost aspects of your online Usually we discuss innovations, this is an exception. We’ll call this a non-innovation, nonovation for short.

Assuming the average customer gets one message per month, and each message is 2k in length, that saves about 20k in storage costs per customer. Assuming the marginal cost for disk space is $10 per GB, that policy change will save an awesome 2 one-hundredths of a cent per customer per year, or $2,000 per 1 million customers.

Extensive online archive space is one of the biggest benefits of banking online. Don’t be pinch pennies on one of the lowest-cost aspects of your online presence.

— JB

——————————————————–
The full text of the message is repeated below:
——————————————————–

Date: 09/14/04
To: Jim Bruene
From: U.S. Bank

Subject: Messages now refreshed after 30 days

In an effort to populate the message center with current information, all messages, including ones related to online statements, will be deleted after 30 days. However, online statements will continue to be available for up to 90 days and can be accessed in the Recent Statement area at the top and bottom of each account Transaction History page. Online statement customers will continue to receive a message in the Message Center when a new statement is available.

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If you’d like to learn more about the future of online bank messaging, check out the Online Banking & Bill Pay Forecast: Current, future and historical usage: 1994 to 2016 from our sister publication, The Online Banking Report.

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ComputerWorld Op-Ed on Phishing

By Jim Bruene Posted on November 17, 2004
Categories: Security & Privacy

Phishy e-mails and Web sites: What’s your responsibility? – Computerworld

Larry Ponemon, founder of the Ponemon Institutute, and new IT ethics columnist for ComputerWorld, writes about phishing this week.

His accout is unusual in the detail. His company surveyed 411 customers of a major retail bank that claimed to have clicked on a phishing email in May 2004 and who contacted the bank’s customer service department seeking help. Of the sample, 65 (16%) provided account details in the scam. Of those, 5 (8% of 65) reported account losses totally $50,000. Doing the math, that means a little more than 1% of those clicking on the fake email lost money, averaging $10,000 per loss, or $120 per customer who clicked. Pretty good money for the crooks if you don’t get caught.

More interesting is that 310 (75%) felt that the bank’s service reps were unprepared to deal with the problem. Nearly 60% of the total sample, a whopping 243 customers, said they would close their accounts at the bank. Even if just a quarter followed through, that’s 61 lost customers (15% of 411). Assuming each customer represents a NPV of $1000 to the bank, that’s another $60,000 in losses, bringing the total to more than $100,000.

Dr. Ponemon closes with five ideas for fixing the problem.

If you have been trying to convince senior managment to approve funding of additional security measures, by all means forward this article to them.

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GeoTrust’s TrustWatch Toolbar

By Jim Bruene Posted on September 12, 2004
Categories: Innovations

There’s a reason why everyone and their uncle are offering toolbar’s that
plug-in to Internet Explorer. They are a convenience to customers and a
tremendous branding opportunity. The latest entrant from GeoTrust’s TrustWwatch
unit: a privacy toolbar. It’s similar to Ebay’s Account Guard function with a
green light for “verified” websites, yellow for “not verified,” and red for
“warning,” websites on their black list. If you are working on a bank-branded
toolbar (see OBR 85), consider licensing this functionality from GeoTrust http://www.trustwatch.com/
Also, if you haven’t already done so, make sure your website is verified by
submitting it to one of the trusted third party certification authorities such
as Entrust, Betrusted, or GeoTrust.

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Boosting E-statement Enrollment at Schwab

By Jim Bruene Posted on September 11, 2004
Categories: Charles Schwab

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Electronic Messaging Opportunities and How to use for Cost-Reduction Benefits

By Jim Bruene Posted on September 10, 2004
Categories: Innovations, Service

Electronic messaging is wide-open for innovation. The content, delivery, and
style of your electronic messaging provide numerous points of differentiation,
and the business case is positive with potential retention, cross-sale, and
cost-reduction benefits (see OBR 91/92 for a complete analysis).

Source: Online Banking Report, 9/04

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Online Banking Benefits: Consumer Needs Pyramid

By Jim Bruene Posted on September 9, 2004
Categories: Online Banking Report

Before embarking on new product and marketing strategies,
perform a reality check on users’ expectations.

Source: Online Banking Report, 9/04 Notes: 1We call it the illusion of real-time
processing, because users don’t so much care whether a transaction is processed
in real-time, what they care about is that they can SEE that you have accepted
their transaction and have adjusted balances accordingly; the actual
debiting/crediting can occur behind the scenes in batch mode. 2It’s extremely
difficult to describe what’s “right” in words, but we know it when we see it.

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Making Money the Old-Fashioned Way: Fees

By Jim Bruene Posted on September 8, 2004
Categories: Fee Income

In the U.S., online banking fees have all but disappeared. Online account
access fees went by the wayside at the beginning of the Internet era (circa
1995) and bill pay fees have been disappearing in the wake of Bank of
America’s highly advertised strategic decision to give away bill payment
beginning in 2002. However, as we discussed last month, do not give
up the notion of charging for online services. On the contrary, as more
users go online, there is a much bigger market for premium services along
the lines of American Express and Federal Express. Following is our list of
potential fee-based services and the range of potential charges. The “Low”
column lists the range of fees geared towards consumers, while the fees in
the “High” column are more appropriate for small businesses, which are much
less fee averse, and other high-end consumers.

Note: Commentary applies to the U.S. market only. Other international
markets have much different appetites for or against various fees.

Source: Online Banking Report, 9/04
Notes:

*The fees in the Low column are more appropriate for average consumer
users; the fees in the High column are more appropriate for micro and
small businesses, and some consumers with complex finances; for simplicity, we
have rounded most fees to the nearest whole dollar; however, common retail
pricing practices are to set prices below natural price points such as $9.95
instead of $10

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Online Strategy Matrix Designed for your Business Planning Process

By Jim Bruene Posted on September 7, 2004
Categories: Strategic Planning

The following matrix is designed to assist your business planning
process. Consumer strategies are divided into three broad categories:
product, general marketing (on- and off-line), and customer
satisfaction/service. Each broad category is further divided into groups of
tactics aimed at a common goal. Finally, every tactic is categorized as
either:

· Best Practices (column 1): Required
features that every competitive financial institution should support

· Competitive Advantage (column 2): Top-rated
features that differentiate you from the competition

· Others (column 3): Other optional features to
help set you apart and/or support other company objectives

Source: Online Banking Report, 9/04
Notes: (1) Features to put you at parity with the best online banks; (2)
Differentiating strategies that provide either a competitive advantage,
incremental profits, or both; (3) Other optional tactics to create competitive
advantage and/or support other company goals.

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Small and Microbusiness Strategy Matrix

By Jim Bruene Posted on September 6, 2004
Categories: Small Business

In theory, small and micro businesses represent one of the most lucrative,
and relatively untapped, sources of incremental business. The reality is that
most small and even mid-size businesses are too busy to spend much time changing
banking relationships, unless they are a pre-startup¹
and/or shopping for a credit line or loan. As we outlined in OBR 107/108, a
product offering optimized for business will differ somewhat from one built for
consumers. The following chart summarizes the product options for small- and
microbusinesses. See our prior report for more detail on each feature. The
options are divided into nine categories:

1. Statement data: viewing and organizing balance

2. Customer service: customer care delivered over the Internet

3. Accounting services: financial management tools

4. Payments and billing: e-checks, bill pay, email payments, ACH,
wires, invoicing, card processing

5. Security/privacy: privacy, security, permissions, guarantees

6. Lending: business tools, news, information

7. Website content/features: non-financial tools and information

8. Alerts: email, fax, telephone, and mail activity- and balance-level
alerts

¹Pre-startup: The time immediately preceding business startup
phase. One of the first things an entrepreneur will do is open separate bank
account(s) for a new business venture; it helps keep records straight for
tax-reporting purposes. So it does little good to target any startup, since
most will already have business banking relationships established; you
really need a foot in the door in “pre-startup” mode, when the kernel of an
idea is just forming (see OBR 107/108, for ideas on how to target
pre-startups).

Online Services for Microbusinesses
checkmark = must have feature; R = recommended feature; O = optional feature