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The Eight Core Functions of Online Banking

By Jim Bruene on August 5, 2010 6:06 PM | Comments (11)

image What could be more fun on a gorgeous summer day than boiling down online banking to its core functions?

From the consumer's perspective, banking is pretty simple. You stash away some money in the bank and then you spend it. Rinse. Repeat.

The online/mobile banking experience should echo that simplicity. Here are eight key things users should be able to do: 

  • See: View balances, checks written, purchases made, images, and so on
  • Sort: Interact with the data by rearranging, categorizing, tagging and so on
  • Save: Store all data, images, and reports for future reference 
  • Share: Allow other authorized users to view/receive selected info
  • Send: Move money to pay bills, transfer funds, pay down loans and so on
  • Select: Choose account options, change service plans, modify settings, and so on
  • Service: Investigate and fix issues
  • Secure: Batten down the hatches for all financial matters

I believe the industry is only about 10% to 15% of the way towards delivering on these eight items. Most online banking services are pretty good with See. And there's been a lot of work done with Secure and Send, but they are not nearly perfected yet (I spent 40 minutes in the branch Tuesday sending a $3,000 wire, and I still don't know if the recipient got it). But the other areas are wide open.

Did I miss anything?

Note: Photo credit -- Adonis Hunter (Flickr)

Comments (11)
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11 Comments

Jim,
I think you touch on an interesting topic and you have the right intention. However, I think your list actually defines what the "ideal" online/mobile banking experience should entail. I don't think online/mobile banking at its core and most simple terms would include all that you have listed.

In my opinion, online/mobile at its core should hit on: See, Save, Select & Secure. I think the other info you list are premier/additional benefits of a more advanced system.

I agree with your assertion that banks are 10%-15% to where they should be.

Kasey
@kmskala

Very good simplification of the important matters in online banking. However I would add "Stocks" as well for investment related features.

Jim,
This is the good point of view.
If you want to see good online banking solutions go to Europe, to Poland.

There are few very good examples of online banking: f.e. www.inteligo.pl, www.mbank.pl

More important is that there is no any bank in Poland without online banking.

Sounds like you covered more than most would expect from mobile app - but there is still one thing missing. Simple, secure login. Who is working on a password safe for mobile banking app? These strong password rules are very difficult to master - and entering (fat finger frustration) wrong characters 3 times (easily done) locks your account. Why not go to a password safe for mobile phones, copy login credentials from there to clipboard, and go back over to your mobile bank app and paste it in? you still have to get into the password safe, but at least you don't risk locking yourself out of your accounts so you can't even find a PC and get access there. By then, you need your FI to step in - or go through some other verify ID and account purifying routine.

I think Jim is dead on here actually. I would add something like notifications/ alerts/ OFM type stuff. I cannot think of a word beginning with "S" for that - perhaps someone creative can.

re @kmskala: with regard to the mobile part I believe we have to get over that concept of mobile banking as a standalone. Rather customers (ideally) have an electronic relationship with the bank, and some functions are managed on the web and some mobile. The key is that they should be multiple views (web, ATM, mobile, branch) into the same 'engine'. I get it that the technology may not work that way entirely but that ought to form the basis of the business design.

Then the strategy is to develop each channel appropriately for customer experience and needs of the bank. e.g. specific functions for branch, sleek and fast for mobile, rich for web, etc etc depending on the banks strategy.

This approach provides a better template to achieve a consistent multi channel experience rather than the usual attempts to stick web functions into a mobile screen. It may be that See, Save, Select & Secure are right for mobile but how they are done may not be the same.

I like the list too, but I disagree that it can be shortened into core and premier services in the way that Kasey describes. I believe that the cardinal benefit, the whole reason for being, is having the ability to take some action. At this point in the evolution of online banking, passive observation, or "See", is meaningless without the action steps of "Send, Select, Service". In other words, the "View" must have the "Do".

The next evolution, the one that will really change the game, is that in which users get more value from online tools than they could have from other channels. So I propose another "S" as an aspirational goal for the industry - "Synergy"

Strategize is missing. Online advice and guidance can help people plan long-term for their financial success. Seeing how one compares to others in similar situations can help as well.

Another key component is "receive" - not an "S" word, but isn't it important to be able to bring money in too? Consumer P2P will become a more and more important part of online banking (and by online, I mean electronic as @thebankwatch.com put it) as it becomes more convenient. Small businesses have always had the need to invoice and receive money electronically.

A stretch might be "spend". Online banking doesn't generally include this, but PayPal's certainly done a great job of providing this as a service. I see this as different than send, which doesn't imply all the functionality you'd need to serve a person wishing to make a purchase.

I think to debate about what's core and "ideal" is somewhat irrelevant, as this would seem to change over time. Why would you exclude "send" for example? Paying my bills online is core to me - I would not sign up for an electronic banking system without it, though this is obviously different from 20 years ago. Today's ideal is tomorrow's core - ask any 10 year old in 20 years whether "Share" is core and they'll look at you like you once lived in another century ;-)

Jim, this is a great list. I think it's a great snapshot of where online banking is today, and agree that the industry has yet to fully nail down all of these functions.

I would throw in the intelligence that can be provided by solutions that prioritize PFM/OFM (can't think of something that starts with an S). This would move the user beyond the basic "sort" and "see" functions.

An additional area to add would be "Sign Up." Allowing new and existing users to enroll and open new accounts online.

Jacob (@jjegher)

Would agree that it is a great summary list of functionality for online/remote services. Maybe the OFM/PFM 'S' that several people mentioned could be 'Supervise' as more and more consumers/businesses want to take more control and management of their money. Using Supervise as part of your core brings into account OFM/PFM/SBFM and actionable alert functionality.

Good post, as always Jim.

Brad Leimer
@leimer

Agree with Greg that something like 'Strategize' is missing. Maybe 'Analyze' is more appropriate; the possiblity to assign categories and relations to transactions, see how much is spent on these in certain timeframes.
Beyond that 'Planning'; see what transactions are coming up, what those will do to the balance, based on that maybe decide you can buy those shoes today.

'Spend' is a nice one too. I can see banks helping us to see where we spend our money using PFM concepts, and based on that make offers for better ways to spend our money.

Three other concepts to add/modify:
- Gathering in $$ via other than online transfers, such as (eventually) chip cards of some sort, and (today, for some) taking a picture of a check. Don't have a good "s" word for that.
- I'd suggest "smart" for the "intelligence" element that Jacob mentioned. Keeps the "s" thing going.
- One could also consider "strategize" (a synonym for plan), using online tools (a la mint.com and certainly others) to map out future spending plans, both for cash flow planning and longer-term planning as well.

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