www.safe2bank.com

Fed by media reports, often wrongly implicating online banking in fraud problems the public is becoming exasperated with the growing assault on their computing. Spyware, adware, spam, viruses, worms and phishing are enough to drive consumers back to that comfortable spot on the couch where all they have to worry about is what show’s on next.*

At Online Banking Report, we’ve watched the growing backlash with great concern. Although we’ve written about it, we want to do more. We’ve been telling reporters for years that overall online banking is safer than the paper processes it replaces. To get that message out to a broader cross-section of consumers, we are launching the Safe Banking Initiative (SBI) to foster education and awareness of safe online banking practices within the industry and to educate the marketplace, especially the media, as to the real risks of various banking and payment options, both online and off. Its business model will be similar to the Underwriter’s Lab in the electrical appliance field. The SBI website (under construction) will contain educational information along with a database of certified banks.

One of the first efforts will be the deployment of the Safe2Bank Online Certification program that will allow regulated financial institutions to apply for a safe banking logo that can be displayed on their websites. The idea is help consumers know when they are visiting a financial institution that adheres to the Safe2Bank guidelines. We plan to make the scorecard criteria open to the public via the Safe2Bank website, but the weightings, actual scores, and score cutoffs will remain confidential (although participating financial institutions will receive a full copy of their weighted scorecard and comments).

The guidelines are still in development, and we are looking for your input. The first draft is listed on pages six and seven. To become certified, financial institutions must achieve a yet-to-be-determined minimum score across the 80 items. Financial institution will not have to pass all 80 guidelines to become certified, although there may be certain required items such as a visible privacy policy, secure password-reset procedures, and so on. Certified financial institutions will have their names, Web addresses, and contact info listed on the Safe2Bank website. They also have the option of licensing the mark to display on their own websites and marketing material  .

To become certified, financial institutions must answer a questionnaire on their online banking features and processes (all questions related to publicly available material). Answers will be verified by an SBI employee and scored using the criteria in Table 2 . Each factor will be weighted, and partial credit will be available on certain guidelines. The resulting score and comments from the evaluator will be shared with the participating financial institution. The audit deals only with publicly visible features and processes: it is NOT a back office or network security audit like the SAS 70 or other regulatory reviews.

*As we were going to press, another story ran on The NBC Nightly News about $90,000 lost by a small business apparently aided with information obtained from a personal computer (reference: msnbc.msn.com/id/6713753).

Financial institutions are encouraged to apply now for certification. The first wave of certified financial institutions will be announced at the launch of the consumer education campaign, currently slated for second quarter 2005. Financial institutions will be certified in the order of application, so the earlier you return the reservation form, the sooner you’ll be eligible. The cost for the certification audit is $500 payable with your reservation form (see enclosed). The fee is not refundable, but those not passing may reapply within 12 months for half price.

Financial institutions passing the S2BO audit will have the option of licensing our Safe2Bank Online logo for inclusion on their websites and marketing materials. Licensing cost will be no more than $1000 annually during the launch period. Final pricing will be announced in first quarter 2004.

As the certification process unfolds, we will initiate a far-reaching, consumer-awareness campaign. Part of that effort will be to help each certified bank make a splash in their home market. SBI will assist in issuing a joint press release and will participate in other media events as well. Online promotional efforts will also be used to raise awareness of the Safe2Bank designation.

We have enclosed a signup form with this newsletter. Receive one via email by sending a request to anita@onlinebankingreport.com   

The SBI is a wholly owned division of Financial Innovations, publishers of Online Banking Report since 1995. The managing director is Kate Schultz who brings to SBI a long track record of organizational leadership in the nonprofit sector along with 10 years of contributions to Online Banking Report. All guidelines will be reviewed by an industry advisory board (below) before being finalized.

We consider every OBR subscriber to be an unofficial SBI advisor. So please provide your input on the S2BO scorecard and any other aspect of the initiative. We are also assembling a more formal advisory panel from the industry to review the criteria and submit comments. If you would like to be on the official panel, please email kate@netbanker.com . The position is voluntary and unpaid with a relatively small time commitment**
(no meetings!). Membership is limited with preference to financial institution employees.

Although all the information obtained in the audit will be publicly available, we understand the sensitivity of the industry to the threat of hacking and leaks. Therefore, all audit results will be kept in password-protected files on computers not connected to the Internet.

*Financial institutions are encouraged to obtain an opinion from their compliance and legal staff on the ramifications and implied liabilities, if any, of using the Safe2Bank logo.
**The time commitment should be no more than a few hours each quarter.

Safe2Bank Online Scorecard Beta Version 1.0

Table 2

Safe2Bank Online Scorecard

Source: Online Banking Report, 12/04

References: Security and Privacy Report, OBR 93/94