As we mentioned last month, Charter One has been on a tear, introducing new state-of-the-art Web features at a breakneck pace. We gave the company a Best of the Web award last month for its new fyiAlerts. This month Gomez Advisors named Charter One the second best overall online bank, a seven-notch improvement from Q2. Charter One moved past Wells Fargo and Bank of America and now trails only Citibank (see Table 2, below):

Table 1

Gomez Rankings

U.S. online banking offerings, Q3 2002 vs. Q2 2002

Source: Gomez Advisors, 10/02
"arrow up" = Moved up at least 5 notches from the previous quarter.

*First Union score, Wachovia scored 5.08

Cleveland-based Charter One, with $39 billion in assets, is the 29th largest bank in the U.S. In September the bank had 330,000 online banking customers, more than 25% of its 1.3 million active checking accounts.

We first became aware of the bank’s prowess this summer after a string of product announcements including fyiAlerts. To get a better idea of how Charter One has quickly moved to the forefront of online banking, we signed up for an account and will detail our experience during the next few issues. Part 1 covers the online account opening process.

The online application is delivered through a popup screen that keeps users apprised of where they are in the process.

Account Opening Process

Although the fulfillment process appears flawed (more on that later), the bank’s online checking account application is well designed and easy to complete. Applicants need their driver’s license or passport number and an existing credit card or deposit account number to transfer the initial balance.

The application consists of 8 screens and about 50 pages of disclosures. It took us just under 9 minutes to complete the entire process including more than 2 minutes skimming the disclosures (time spent digesting the 50 pages of disclosures will vary widely). The initial deposit can be transferred from a deposit or credit card account at any bank. We chose the credit card option which has a $1,000 limit.

In our case, the application process was smooth until the last step. We completed the application on the evening of Oct. 14. We received an on-screen confirmation (screenshot, upper right) with a vague discussion of needing to conduct “certain security reviews” and putting our account on “post no debit hold pending receipt of the application/signature card.” It went on to say that a new account kit would be mailed within three business days. So far, it’s been seven days and we have yet to receive any word from the bank, not even a simple email confirmation of our online application, even though we were told one would be sent (top of screen, right).

To compound the problem, there is no online method of checking the status of your new account. You can’t set up online banking until you have an account number, and you don’t get an account number until the new account kit arrives by mail. We do know that Charter One tapped our credit card for the deposit amount, so presumably we just have to be patient. But this is no way to treat a new customer.

Being 2,500 miles away from Cleveland, we understand if the new account material arrives a week later, but the bank should be communicating via email and/or phone to assure the new customer that their account is being processed. Other than the credit card charge, we have no verification that Charter One even received our account application. At this point, customers may reconsider their decision to open an account. Luckily the bank provided a toll-free number to call with questions.

Analysis

Pros

•    Navigation in the upper left-hand portion of the application keeps users apprised of where they are in the process (see screenshot, facing page)
•    Allows initial deposit from credit card ($1,000 max) or ACH from deposit account
•    Allows new customers to set up overdraft protection from any credit card, even competitive ones
•    ATM access is optional
•    Allow passports to be used for new account verification in lieu of a driver’s license
•    Disclosures include a table of contents
•    Option to print disclosures from PDF file

Charter One needs to rewrite its closing “thank-you” screen. Really, what does “post no debit hold” mean?

Cons

Major

•    No email confirmation
•    No account access during confirmation process
•    Slow follow-up after initial application (should be within 24 hours)

Minor

•    Thank you is buried in final screen of application
•    No option for disclosures to be emailed

Continued next month