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.

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


Adding Sales Punch to Bank Homepages


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.


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


  • 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.


“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.

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.


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.

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.


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. 

Making Online Chat Pay for Financial Websites

Aol_chat_xsell_click_to_enlarge After giving AOL for Broadband a try, we decided to switch back to our old $4.95/mo plan we’ve been on for the last 5 or 6 years. Since it wasn’t listed as a choice in the normal pricing plan area, we clicked on the "live chat" button.

Within in few seconds we were live with an AOL rep, and within another minute or two, the rep had us switched back to our old plan. It was a very satisfactory experience.

Action Items
During the chat process we noticed two things that financial institutions should consider adding to their live chat functions:

1. Copy/print button in the lower-right allows users to print or save a transcript of the chat session. A great tool for satisfying the finicky customer who wants a record of their customer service interactions.

2. End-of-the-session cross-sell: After fixing our problem, the chat session automatically presented us with an opportunity to purchase an ancillary service at a special discount. The offer was delivered both in text in the chat window and through a banner above the chat area (click on the screenshot above to see more detail). This could be an effective sales technique so long as it’s delivered in the spirit of helping the customer.


Competitive Comparisons of Services (e.g. Mortgage Rates)


There is one marketing technique that is much easier to do online than through other media — competitive comparisons.

In the old print world, you might be able to update your brochure or ad once or twice per year. Online you can do it in near-real-time.

We’ve long been a fan of IndyMac’s mortgage comparison, first writing about it in Online Banking Report #72 (June 2001). The mortgage lender shows the total mortgage cost at various major competitors, even daring to include examples where it’s not the lowest overall price.

These competitive price comparisons are great, and if you consistently have lower prices, then you should use this approach.

But what about companies that compete on service more than price? After all, most consumers aren’t going to choose a bank, simply to save a buck a month on fees.

If your service is markedly better than your competition, create a comparison chart showing your service standards and capabilities stacked up against the competition.

Even better, hire an independent researcher to document search times, wait times, response times, resolution times, and so on, and post them to your website on a frequent basis. Not only will this impress prospects, its excellent reinforcement to your current customers and employees that you are measurably better than the rest.


Quicken-izing Your Finance Website

Mvelopes_logo Looking for ideas to appeal to the Quicken segment? Personal Mvelopes, an online personal financial management system from In2m Corporation, stitches together account aggregation and bill payment into a $9.95 per month offering.

The company has recently attracted some good PR (Kiplinger’s, Boston Globe, that may translate into some accounts. But unless In2m partners with stronger financial brands, the finance site will struggle to attract paying customers.

Consumers are wary, make that VERY WARY, of online financial services offerings, especially from unknown entities. But if a bank were to license the system and operate it under its own name, it might become moderately successful. (We say moderately, because budgeting is not a mainstream activity, and many of the budget-minded are already locked in to using Quicken or Money.)

If nothing else, the system demonstrates good customer advocacy. The bank could bundle additional services, such as long-term transaction archives, to help justify the $10 per month. Also, bundled revolving credit could boost the business case substantially.

If you’d like to learn more about the how personal finance 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.

Instant Online Bank Account Opening – Banks Speed Process For Opening Online Accounts

The Wall Street Journal reports today in its Personal Finance section on the plans at Citibank, Wells Fargo, Bank of America, Wachovia, and HSBC to offer instant online checking account signup later this year.

While it makes sense for these national powerhouses to enable instant account signup, smaller financial institutions needn’t feel they must follow suit.

Bank accounts, especially checking, aren’t impulse purchases like the consumer goods sold at other online retailers. Most bank customers won’t mind if their checking account is opened by the end of the week.

More important than instant signup are clear explanations of what happens next, email status reports as the process progresses, and clear privacy and security guarantees. A personal telephone call or email followup from a new account rep wouldn’t hurt either.


Mortgage OneAccount from the Royal Bank of Scotland

Rbs_one Speaking of combined accounts (see Higher One), why isn't anyone in the United States offering a combined mortgage/deposit account, a product that's been quite popular in the UK ever since Virgin pioneered the concept in 1997.

The OneAccount, now wholly owned by The Royal Bank of Scotland, has grown to 160,000 accounts with US$20 billion in loan commitments ($125,000 per account).

While a combined mortgage/deposit account probably won't appeal initially to mainstream consumers, it's a potential PR and marketing gold mine. Using deposit totals to offset mortgage principal balance creates significant savings when compounded 30 years.

For example, a $1000 average "deposit" balance used instead to offset the mortgage balance, returns 5-to-1 in interest savings over the life of the loan (using 6% rate), e.g., a $5000 savings. The savings are more if interest rates increase.

Deposits used to offset the mortgage balance provide a rate-of-return equal to the mortgage rate. For example, your customers with 6% mortgages, earn 6% by using their deposit totals to offset the mortgage balance.

The Business Case
At first glance, the combined account seems to have a challenging business case. Every dollar used to offset the mortgage balance is one less dollar earning the spread between deposits and loans.

If you already have the majority of your customer's deposits AND loans, forget about this offering. Enjoy your success!

But if you are looking for ways to increase your home-secured lending business, this product has real potential to bring in new outstandings. 

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

The Future of Banking is Direct

In 1999, we published a report entitled Virtual Checking Accounts: On the Web it’s the plastic that matters (OBR 50/51, July 27, 1999). Our hypothesis was that web-based access, electronic transfers, and a Visa or MasterCard were really the primary transaction tools going forward.

It has happened as fast as we thought it might. Two early proponents of this strategy, WingspanBank and Juniper, really never got off the ground, though Juniper did create an impressive credit card portfolio that was recently sold to Barclays.

Fast-forward to six years, HigherOne is working with 13 college campuses to offer its OneAccount, combing college ID, MasterCard debit, financial aid depository, electronic funding, and of course, website access.

It’s a trend worth watching. As today’s teens and twenty-somethings move through their inevitable financial growth, they are going to think less about the bricks-and-mortar of THEIR BANK, and more about the website and plastic.

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

ING Direct Fundraising ($320,000) for Tsunami


ING Direct posted a Tsunami Relief Fund button on its main account view page (see above). So far, customers have kicked in $320,000. It’s less than a buck an account, but it’s still a sizable contribution in total. ING as a company has also pledged more than $1 million.


  • The donation function is completely integrated, so it couldn’t be easier.
  • A link is provided to learn more about the organization that will administer the donations.
  • Customers get feedback on results, in this case $320,000 raised, so that customers can take pride in the total amount raised.

Note also: The pitch in the middle of the screen (above) to sign up for electronic statements to be entered into prize drawings including a plasma TV. Refer to our Jan. 18 article for more on that sweeps.


Identity Theft Statistics from Javelin Research

Building on last year's FTC study, Javelin Strategy & Research and the Better Business Bureau, released the latest study of financial fraud and identity theft in the United States. A similar level of fraud was found in the late-2004 polling compared to the FTC survey fielded in mid-2003.

How_personal_information_stolen_click_toBoth studies found that just under 5% of U.S. adults, around 10 million, had been victimized in the prior 12 months, with total losses, primarily to financial institutions, of about $50 billion.

One of the major conclusions is that consumers are more likely to be victimized through offline methods compared to online methods, leading Javelin to conclude in their press release:

Internet-related fraud problems are actually less severe, less costly and not as widespread as previously thought.

However, this conclusion that is disputed in Bob Sullivan's MSNBC article by both Gartner's Avivah Litan and FTC attorney, Lois Greisman.

Here are the key findings:

How was your personal information obtained (i.e. stolen)?
     6%  via online methods
     36% via offline methods
     58% don't know

There are two ways to look at those numbers.

The Javelin take: Of those that know how it happened, offline identity theft outnumbers online identity theft 6-to-1, so let's not overstate the online threat.

The Gartner take: In consumer research, much of the online fraud will be self-reported in the "do not know" category, so the data is inconclusive. Avivah Litan says in the MSNBC article:

The general population doesn't really know how the information is stolen especially, with credit card fraud. If you do have a good guess, it usually is because you are in a fight with family member or neighbor. The study is biased towards people who know how it happened.

Our Take
Anytime you have a survey where the majority of participants select, "don't know," it is difficult to draw precise conclusions.

We think these results are promising for the fraud-fighting potential of the online channel, but they don't vindicate it either.

If you assume that the same 6-to-1 offline/online ratio applies to the "don't know" category, that means about 10% of last year's identity theft occurred via online methods, or 1 million cases costing $5 billion dollars.

Regardless of what the analysts say, that's a problem that needs fixing.