That was fast. Just two weeks after my latest appeal to the industry to provide small business owners with more security options, a new product launched today aims to do just that. And it’s packaged as a turn-key, fee-based service that could be sold by banks at a $10+ per month profit (MSRP is $25/mo).
That all sounds too good to be true. When I was first contacted by Greenway Solutions last week, I was more than a bit skeptical. But after speaking with CEO Jerry Tylman and Managing Consultant Jon Meyer, I was convinced they had something that as a business owner, I’d definitely buy.
- Helps banks meet “UCC requirement for commercially reasonable security and their FFIEC requirement for customer education and awareness”
- Provides peace of mind to bank clients
- Protects both the bank and each client up to $500,000 in unauthorized online transfers
- Helps differentiate checking and deposit offerings
How it works
EFTGuard provides protection against fraudulent online-account withdrawals of $100,000 per account (with no deductible), with a maximum of $500,000 per customer. And because it’s not true “insurance” (it just behaves like it), there is no underwriting hassle and the product can be purchased in just a few minutes via online form (demo here). There is, however, the usual list of coverage exclusions; for example, it doesn’t cover insider theft.
The catch? To qualify, business customers must download and install anti-malware software from Trusteer, Iron Key, or Webroot. And every computer accessing the business account must be running these protective software programs. For the time being, that appears to leave out any mobile access.
Initially, banks looking to offer EFTGuard will need to work with one of these three malware-protection vendors in order to qualify their clients for the fraud protection. Other than that, EFTGuard is turn-key and comes with marketing support, a co-branded signup page, and full claims management.
The $500,000 coverage is backed by Chartis Specialty Insurance Company.
Your business customers are rightly concerned about fraud. Offering them an option to protect themselves is a great way to differentiate your deposit offerings while preventing you from getting bogged down in messy litigation with your customers.
I still have questions about how often the list of exclusions will invalidate claims when actual fraud occurs. But the company assures me that the protections are very real.
Assuming EFTGuard delivers on its protection promise AND creates a small profit center, what’s not to like? I, for one, will be the first business owner in line to buy it.
EFTGuard homepage (24 April 2012)
1. I believe insurance is one of the best growth areas in retail banking, especially in niche lines that can be explained and delivered online (see our December Online Banking Report for more about banks delivering insurance online).