What's all this about BarCampBanks? From a North American premiere in Seattle almost a year ago, we've witnessed two more in the last few months, and eight more are either scheduled, or in the planning process.

Well, maybe not exactly “planned.” BarCampBanks emerge more than they are planned.

What’s a BarCampBank?
It emerged from the BarCamp movement, which according to barcamp.org, is defined as...

...an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos and interaction from participants.

It started as a technology summit, an un-conference where developers and technology geeks could share exploits, connect, and find like-minded companions to extol the virtue of open-source and emerging technologies over pizza and wine.

And then someone decided that this forum would be a perfect place to talk about banking and finance. Weird. And yet it works.

It started in Seattle
I was fortunate to learn about BarCampBankSeattle, the first North American BarCampBank soon after it was announced by the prescient organizer Jesse Robbins. I can’t quite call it a decision to attend - it was more a compulsion. Somehow I knew I had to be there.

Probably some of you reading this will feel that way too. And if so, I urge you to get yourself to one of the BarCampBanks spawning like saplings everywhere bank-geeks gather. The conversations initiated, the innovations surfaced and the relationships developed at these organic and loose events are truly inspirational and energizing. It really is something to be experienced, and at a cost of $20-35, it’s a fraction of the cost of a typical talking-head conference.

After BarCampBankSeattle in July of 2007, there was a long dry BCB spell, which wasn’t broken until the last few months when BarCampBankSanFrancisco and BarCampBankNewEngland emerged. Some dedicated BCB-heads even attended both in a cross-country banking-frenzy (you know who you are, my friends).

Coming soon, in Dallas
If you’ve read this far and feel the need to dive in right away, your first opportunity is BarCampBankDallas planned by my co-participant in Seattle, Brad Garland. It’ll take place 21-22 June at the American Bank of Texas Building in Frisco, Texas. Brad is excited about the attendees who have signed up on the wiki (each BarCampBank hosts) where people can add what they wish to contribute to make the event their own. They have people coming from in and out of the country, from banks, credit unions, and even companies like Microsoft. It should be a great conversation.

BarCamping in London
If you’ll be in London this summer, you can check out BarCampBankLondon on 5 July at Sun Microsystems’ offices on King William Street. London is being planned by the great blogger James Gardner, the head of innovation at Lloyds TSB. In his entry on the event’s wiki, James mentions that he is interested in talking “about innovation programmes and the economic reasons why *not* to give them too much money.” Intriguing.

July in Charleston
After London, look out for BarCampBankCharleston, taking place on 26-27 July at the First Federal Corporate Center in North Charleston. George Pasley is organizing, and it should prove to be a great, inaugural Southern event.

BarCampBankBC, just too many Bs and Cs
If you’re on the West Coast and want to save the planet from the carbon emissions of travel to London or Charleston, come to BarCampBankBC, 20-21 September, at the British Columbia Institute of Technology in downtown Vancouver (originally called BarCampBankVancouver, who could then resist the acronym BCBBC?). I am organizing this event, along with Gene Blishen and Tim McAlpine. I am humbled and excited by the diversity of the attendee list so far.

Coming to Charlotte?
But what if you work at Bank of America or Wachovia? With the credit crunch, you may not be able to get your supervisors to pony up cash for an event with the flaky name of BarCampBank. Well, fear not, BarCampBankCharlotte is in the concept stage, and you can help make it a reality. Click through to the wiki and lend Josh Street a hand in organizing.

Stay tuned for more BarCampBanks
The other two in the nascent stage are another BarCampBankSanFrancisco, hoping to coincide with MacWorld in January 2009; BarCampBankMadison, being planned by Christopher Morris from the National Credit Union Foundation; and BarCampBankChicago, 16 July, in conjunction with the FDIC's Interagency Minority Depository Institutions National Conference. 

With all the changes happening in our industry, the focus on relentless innovation, and so much uncertainty about the economy, it’s a good thing that there will soon be a BarCampBank near you.

William Azaroff has been an occasional contributor to NetBanker for the past year. His duties driving Online Strategy & Community Engagement at Vancity, Canada’s largest credit union, keep him from writing as often as he’d like. He blogs at azaroff.com/blog

This past weekend, NetBanker sponsored an event called BarCampBank in Seattle. It's an unusual name for an unusual event. The name derives from an international network of events, which Wikipedia defines as "open, participatory workshop-events, whose content is provided by participants." It usually refers to "early-stage Web applications, and related open-source technologies and social protocols." In this case it was a loose, collaborative unconference about "innovation in banking, credit unions, social lending, or finance." It attracted close to 40 people—credit unions, banking experts, consultants and suppliers across the United States and Canada. It was unfortunate that there was no representation from actual banks.

The topics discussed included the use of social media, credit relief for third world countries, branching strategy, expectations of Gen Y and Millennials, mobile banking, and open-source core processors. Over the weekend, as discussions opened and progressed, the ideas were distilled down to a few themes.

• Banks and credit unions don't really know what it means to be customer-centric.
• The disintermediation that the industry has been seeing on the horizon for years seems to be occurring, and financial institutions had better get on board or lose market share.
• Are social media (blogs, social networks, wikis) an effective way to market and promote banks?
• What would a bank look like if one was built from scratch today?

There was a lot of talk that banks and credit unions only look after their own needs and don't pay enough attention to serving their customers effectively. There is a lack of bravery and responsiveness to their customers' needs. To most consumers, banking is a chore like going to the grocery store or the post office (and in the worst examples, the dentist). People want easy access to their money and sound financial advice; in many cases, that is not what they receive.

There were some very interesting and disruptive ideas. One big one that kept coming up was the banking equivalent of local number portability. You get an account number the first time you create a bank account, and you can move it from bank to bank to bank. An amazingly customer-centric idea. You neither have to change your bill-pay info, nor your direct deposit or pre-authorized payments. This is one of the main factors that keep people where they are, and would force the banks to differentiate based on service and product innovation. The pain of switching would be eliminated and people could change banks when they found a better option for them and not wait until they get so frustrated with their existing bank that they overcome their inertia.

Another theme that emerged, which will come as no surprise to NetBanker readers, is the brilliance of Wesabe.com's model. There is real passion in the way the founder and CEO Jason Knight describes the mission of his organization, which helps consumers make better decisions with their money. With a focus on showing consumers where their money can get them the most value, he doesn't see himself competing with banks at all, but offering a complimentary service. I wonder how many banks see the value Wesabe adds, and will work with it to give customers deeper insights into how they spend their money.

The people in the room were keenly aware of the echo-chamber effect created by being surrounded by those who feel similarly about social media. We were mostly proponents of the relevant use of social media to further the goals of a financial institution. But adoption of blogging, social networking tools and Web 2.0 technology by financial institutions is slow at best, and the number of successful implementations of these tools is few and far between. That honesty was refreshing.

There was an overwhelming feeling in the room that banking is ripe for a revolution. Interesting to come back from BarCampBank and see this insightful article on GonzoBanker about the demise of the banking industry as we know it. Many of these same themes were reflected in our dialogue. Money is too crucial in our lives to avoid big shifts ahead in the financial services sector. BarCampBank demonstrated that this is definitely an interesting time to be in banking.

There’s a reason why everyone and their uncle are offering toolbar’s that plug-in to Internet Explorer. They are a convenience to customers and a tremendous branding opportunity. The latest entrant from GeoTrust’s TrustWwatch unit: a privacy toolbar. It’s similar to Ebay’s Account Guard function with a green light for “verified” websites, yellow for “not verified,” and red for “warning,” websites on their black list. If you are working on a bank-branded toolbar (see OBR 85), consider licensing this functionality from GeoTrust  http://www.trustwatch.com/  Also, if you haven’t already done so, make sure your website is verified by submitting it to one of the trusted third party certification authorities such as Entrust, Betrusted, or GeoTrust.

Electronic messaging is wide-open for innovation. The content, delivery, and style of your electronic messaging provide numerous points of differentiation, and the business case is positive with potential retention, cross-sale, and cost-reduction benefits (see OBR 91/92 for a complete analysis).







Source: Online Banking Report, 9/04
 

Although not as robust as Barclays, Washington Mutual is the only top-10 U.S. bank with prominently targeting startups. Through its partnership with StartupNation, the bank has posted several articles on its website, and also sends users to a cobranded www.StartupNation.com  website to sign on for more tools and resources including webinars, resources, and coaching. We don’t know the terms of the relationship, so we can’t judge the cost effectiveness. However, we definitely like how WAMU is positioning itself as a supporter of
small business. 

Innovators in small business online delivery

Today much has changed. Everywhere you look, banks are innovating to serve the small business market more effectively. According to Watchfire’s GomezPro unit the best small business banking sites are Bank of America and National City, tied for first place in its year-end 2003 scorecard (see Table 55, right). 

Other online innovators in the small business market:

•          Barclays Bank (London; $800 billion) uses its website to target startup businesses with a broad array of support services that many startups would find essential, including a free business checking account for the first year. It’s so impressive, we’ve given it our second Best of the Web award this year
  (see next page).
•          PNC Bank (Pittsburgh, PA; $70 billion) and NetBank have both announced plans to offer remote check deposits, something most U.S. banks will support within a few years. One of the last reasons to visit the branch will be eliminated when clients can feed paper checks into a scanner instantly depositing the cash into their account and storing the image into their online banking archive
  This service is a shoo-in for an OBR Best of the Web once it goes live.
•          NetBank (Alpharetta, GA; $4.1 billion) which launched a new small business initiative a year ago, has attracted 1,600 businesses with $38 million in deposits ($24,000 average deposit). If it keeps to the announced third-quarter launch, NetBank may be the first bank to offer remote paper check scanning

Barclays provides valuable services for startups

Why do the U.K. banks do a better job serving small businesses online compared to their U.S. counterparts?¹ Perhaps U.S. banks are underestimating the value of services targeted directly to small business owners. Or maybe they’ve found it too difficult because business owners won’t bother switching bank accounts to save a few bucks a month. That’s why it makes so much sense for Barclays Bank to focus on startups at its business website <business.barclays.co.uk>. After all, if you succeed in being a startup’s first bank, you have the inside track to retain its business over time.

Barclays business homepage (see below) is dominated by a shaded area asking the important question, Starting a business? Even though the vast majority of visitors already have a business and a banking relationship with Barclays, those most likely shopping for services are startups. The bank also offers Pain relief in a box, a proprietary business management and accounting program targeted for tiny businesses or startups that haven’t settled on an accounting software system.

¹Two out of three of our Best of Web winners for small businesses are headquartered in the U.K.

Barclays’ small business Starter Accounts consist of the following features and benefits:

•          Current account (checking) with an overdraft facility; free for the first 12 months, 18 if you also maintain personal accounts at Barclays
•          Savings account
•          Loans, subject to credit approval of course
•          Insurance
•          45-minute free consultation with a business/marketing consultant
•          45-minute free consultation with an accountant
•          30-minute free consultation with an attorney

NetBank and PNC to offer remote deposits

According to recent press reports, both NetBank (American Banker, May 20) with 1,600 small business clients and PNC Bank (Wall Street Journal, June 8) with 200,000, will launch remote deposit service for their business customers. Although details of the yet-to-be-launched services are sketchy, it is expected that business customers will be able to scan paper checks into a remote device that transmits images to the bank for immediate deposit. PNC estimates the scanners will rent for $15 to $25 per month. No word on pricing from NetBank. The NetBank service is expected in late third quarter and PNC expects to roll-out by yearend. Alogent http://www.alogent.com/  is the technology provider for NetBank.

Benefits for small business owners:

1.   Saves time/money: Frees business owners from the daily/weekly trek to the branch, something 80% of online self-employed households reported doing during the past 30 days according to Javelin Strategy

2.   Improves cash flow: Checks can be deposited immediately rather than collecting dust waiting for the owner’s next trip to the branch

3.   Streamlines record keeping:

i.    the original check can be filed as a paper receipt if desired

ii.   a back-up electronic image is stored at the bank if questions arrive

4.   Improves customer service: Check images can be quickly retrieved and emailed if
a dispute arises

5.   Saves storage space/cost: Paper checks can be destroyed much sooner, eliminating storage and security issues

6.   Improves management control: Owners can spot-check deposit activity by looking at actual check images, rather than staff-entered accounting entries

Speaking as both as a small business owner and an industry analyst, this is a great service and a strong candidate for a Best of the Web award once it becomes operational.

Innovating in online marketing and delivery

Credit cards have always fascinated me. From my first card in 1982, through my stint as a card product manager in the late 80s, I’ve been a student of the industry, watching and learning from the best: American Express, Citibank, First USA, Capital One, and others.

As we entered the Internet era in the mid-to-late 90s, I fully expected the credit card issuers to lead the financial services sector online. For a while, it looked like a good prediction. Many of the early online banking pioneers, NextCard, Providian/GetSmart, Wingspan Bank, C2it, Juniper Financial, had their roots, and business plans, centered on credit cards.

But a funny thing happened as that story was being written. Recession. Whether it was an unseasoned portfolio (NextCard), problems at the parent (Wingspan), or an over reliance on sub-prime (Providian), these pioneers lost their funding and retrenched (Providian, Juniper) or disappeared (NextCard, Wingspan, C2it).

But as card companies recover from the beating they’ve taken during the past three years, we are seeing renewed innovation from the sector. For example, after a decade of struggling to get traction, the card companies have put online bill payment on the map with their convenient card-payment options. As a result, card issuers have some of the largest registered user bases in the financial services arena (Table 1 below):

Table 1

Top 5 Online Cardholder Bases, Year-end 2003
number of online cardholders

Source: Companies, (e) Online Banking Report estimates, +/- 25%, 2/04

We still believe that long-term you are better off wrapping your direct banking efforts around plastic rather than paper ( “Will that be Paper or Plastic?”). If NextCard had been more patient in building its portfolio, they could have been a powerhouse today. So who will take their place as The Internet Credit Card? It’s one of the more intriguing opportunities of the decade.

Table 2

Top 5 Online Cardholder Bases, 2000 to 2003
number of online cardholders

Sources: Companies except, (d) Dove, (e) Online Banking Report estimates, +/-25%, 2/04

Online Card Usage

According to a recent Forrester report,¹ 75% of U.S. credit card customers have online access, and of those 36% (20 million) access their card statements online. More than 60% of those users (12 million) accessed their account regularly. Fisite Research, a company founded by ex-Gomez payments analyst, Paul Jamieson, found even higher usage; with 57% of online cardholders saying they manage some aspect of their card online² (see Table 3, right). Whether the true number is 20 million or 30 million or somewhere in between, we do know that the use of online credit card management has exploded. Three years ago (year-end 2000), fewer than five million households accessed cards online (see full details, Table 5, opposite). Now, at least five individual card issuers have online user bases of five million or more (see Table 2, above).

There is even a greater disparity in estimates of the number of cardholders paying their card bill online. Forrester found that just 36% of online card statement viewers
(7 million HHs) pay their bill online, while Fisite reported 74% of online card managers paid online.² Gartner estimated that 22 million adults pay their card bill online, either directly or through third-party bill pay.³ Based on these estimates and usage numbers from individual card issuers, we estimate 16 and 18 million households pay their card bills online directly at the issuer, up nearly 20-fold since less than one million users at the beginning of 2003.

¹How To Right-Channel Credit Card Customers, by Catherine Graeber, Forrester Research, Jan. 2004, $675, http://www.forrester.com/ , fielded, Q2, 2003
²The TSYS Summer 2003 Executive Online Credit Card Survey, Finite Research, $2495, http://www.fisiteresearch.com/  fielded May/June 2003; the numbers may be higher because respondents included pay-anyone third-party payments in their answers
³EBPP Future Blends Direct Bank Aggregation Models, Jan 13, 2004, by Avivah LItan, Gartner, http://www.gartner.com/  $95, fielded May ‘03

Table 3
U.S. Online Credit Card Usage Estimates

Source: Companies, Online Banking Report, 2/04
*OBR estimates, Fisite reported usage as a percent of cardholders responding
to its online survey fielded summer 2003, household extrapolations by OBR
**Includes online payment direct at card issuer or through third-party bill pay

Table 4
Online Card Evolution

Source: Online Banking Report, 2/04                                                      

Forecast

The convenience and reliability of paying card bills online will continue to drive online credit card growth. For 2004, we project overall growth of five million new online credit card households (range: 4 to 7 million), the same number of newcomers as in 2003. However, the rate of growth will slow slightly to 25% compared to 33% last year. Ten years from now, online credit card penetration is projected to grow to 47 million, 40% of U.S. households, compared to 19% today.

Table 5
Online Credit Card Forecast

U.S. households using online credit cards at year-end*

Source: Online Banking Report projections based on industry data (+/- 30%), 2/04

Table 6a

Consumer Households Using Online Credit Cards: U.S. vs. Worldwide
millions of households actively using online banking and/or online bill payment

Source: Online Banking Report estimates 2/04, accuracy estimated at plus or minus 30% U.S., 40% worldwide

Table 6b

Annual Growth Rate of U.S. Credit Card Households

millions of U.S. households and percent change from previous year

Source: Online Banking Report estimates, 2/04; accuracy estimated at plus or minus 30%

Table 7

OBR Definition: Online Credit Card Household

•         Someone in the household must have done at least ONE of the following during the past 6 months:

•        Viewed balance/available credit or transaction data online¹ for a general purpose² credit or charge card

•        Authorized a card payment at the site of the card issuer (not at a third party such as a bank’s pay-anyone bill-pay service)

Does not include:

•        Online point-of-sale transactions using a credit card

•        Debit or prepaid card account management, application, or purchase

(1) Any connection from home, work, school, or other place where data can be viewed through any device (Web phone, browser, proprietary software, Quicken, Money, etc.)

(2) Visa, MasterCard, American Express, Discover

Table 8

Gomez Top Card Companies

Q3 2003 Scorecard

Source: Gomez, 1/04

Looking back at 2003, we selected 10 industry developments that provide the best glimpse at the future of online financial services delivery.

Innovation of the Year

Premium Online Banking: Money HQ from Online Resources

Money HQ from Online Resources earns 2003’s Innovation of the Year and number 15 on our all-time list for its innovative packaging of several advanced features into a fee-based premium service. The new service, powered by CashEdge, combines account aggregation and interbank payment services. It’s accessed via a tab (far-right) on Online Resources Internet banking platform (see screenshot below left). 

The premium service offering is optional for client financial institutions, but with zero out-of-pocket costs, the company expects widespread adoption. Currently, 40 out of 500 clients are live with the service, including First Command Bank (Fort Worth, TX) and Pinnacle Federal Credit Union (Edison, NJ).

Suggested retail price is $5/mo plus transaction fees for certain A2A transfers. Revenues are shared between the financial institution and Online Resources.

Two

Phishing undermines trust (for now)

Not coincidently, just when mainstream users were beginning to trust online financial services, along comes the mass phisher, spamming the world with hundreds of millions of fraudulent emails purporting to be from the user’s bank, credit card company, or ISP. Unfortunately, the problem is going to get worse before it gets better. Anti-phishing.org, a non-profit bankrolled by Tumbleweed Communications, identified 60 unique phishing attacks in the two weeks before Christmas, which unleashed an estimated 60 million fraudulent messages. Not until an authentication protocol is widely adopted (hopefully, by early to mid-2005) will the onslaught of fraudulent emails slow. 

Long-term, as techniques such as digital signatures eliminate most casual phishing efforts, it will be a non-issue. In fact, these scares tend to be good for existing financial institutions whose customers are even less likely to venture to a new provider .

Three

Banks move to boost security perceptions

After a quiet first half of the year, banks were hit with a number of highly publicized security intrusions. First, the South Africa press had a field day with a keylogging incident that became public knowledge in May
. Other incident in the UK and New York were also publicized, but at a far lower level than the South Africa incident. Then beginning with two Wall Street Journal stories this summer (July 22 and August 19) and continuing until year-end, the endless phishing attacks garnered a significant amount of press, nearly 500 articles in the past six months contained the word phishing. 

Banks, understanding what’s at stake, took decisive actions to reassure online banking users and prospects. For example, within weeks of its keylogging breach, ABSA Bank installed numerous new authentication tools to virtually eliminate the threat. Its most visible change: an optional virtual keypad allowing wary users to “type” in their PIN codes (see inset). This defeats most keylogging since the hacker would have to map mouse coordinates to determine which digits were selected. In addition, the bank instituted a rotating secondary password requirement for users to move money out of their accounts or change personal information.

Four

Citibank launches interbank transfers (A2A)

Five years ago (Oct. 1998), when the ill-fated CompuBank first launched its online services, it included an innovative interbank funds-transfer system (A2A). At the time, we expected it to become common within a few years. But other than the Internet-only banks such as ING Direct and E*TradeBank, the service has not caught on in the United States. In fact, no major U.S. bank offered it until the fall of 2003 when Citibank added interbank transfers to its online banking program. CashEdge, which also powers Money HQ from Online Resources operates the transfer system behind the scenes.

Citibank, which for several years has boasted a top-rated online banking service based on ranking
by Gomez, Forbes  www.forbes.com/bow  and others, may earn a new round of kudos by being an industry leader in A2A. Just this week Forbes bestowed its Best of the Web on Citibank once again (see Table 15, right), specifically mentioning the A2A functionality.

Table 15

Forbes Favorites: Personal Finance & Investing

Source: Forbes, 1/04

Five

Press turns positive online banking and other online financial activities

A year ago, much of the mass media was negative or neutral on the overall benefits of online banking. Reporters were still looking for examples of dot-com excesses and often invoked the names of Wingspan, CompuBank, and Citi f/i as examples of online banking’s failed promise. Never mind that the service was growing faster than ever in terms of net new households. During 2003, the negative reporting gradually gave way to new stories about convenience, ease-of-use, and good value (especially with the elimination of bill pay fees). In 2004, we expect a mini-backlash as the press focuses on the phishing threat, but overall we expect the media to embrace online banking for years to come.

Six

Bank of America hits seven million users

Table 16

BofA Online Banking & Bill-Pay Users Trend

active users (past 90 days)

Source: Bank of America, 2001-2003
DDA = demand deposit account (checking)

Table 17

BofA Online Banking & Bill-Pay Metrics

November 2003

Source: Bank of America, 11/03

*average monthly rate past 3 months

Seven

The decline of paper statements begins

Although it will take the better part of the decade before even 50% of online banking customers turn off their paper statements, 2003 marked the beginning of the inevitable decline in paper statements.

Table 18

Market Share: Paper Statements vs. Electronic Statements

U.S. checking/share draft accounts

Source: Online Banking Report estimates, +/- 50%

¹Percent of all online-enabled demand deposit accounts (DDA) receiving monthly paper statements, can also be receiving an electronic statement

²Percent of all online-enabled DDAs with no paper statement

³Percent of all DDAs receiving a monthly paper statement, can also be receiving an electronic statement

⁴Percent of all DDAs with no paper statement

Eight

Banks redesign websites for Yahoo-like clarity

Each year since the industry got through its Y2K headaches, bank websites have made dramatic usability improvements. Last year, the most notable redesign was at Web-banking pioneer Wells Fargo. Every financial institution should show similar restraint in limiting homepage promotions and extraneous text. National City and Wachovia also introduced similar-looking homepage styles.

Nine

Real-time credit for remote deposits

E*TradeBank and Pennsylvania State Employees Credit Union both earned OBR Best of the Web awards with creative solutions to the remote banking bugaboo, delays and uncertainties in deposit posting. PSECU was especially innovative, earning the 23rd spot on our list of all-time online banking innovations by providing immediate credit for deposits being mailed to the CU. Not only is it a great online banking benefit, it has saves the CU more than $100,000 in interchange costs. Pentagon Federal Credit Union launched a similar service in October, dubbed Trust In You.

Ten

Identity Theft 911 provides a credible source to fight ID theft

Identity theft was raised from an obscure crime to dinner conversation in late summer when the FTC released survey results indicating that everyone in America has assumed the identity of someone else, or so it seems if you read all the press accounts. Actually, the FTC reported that 10 million U.S. adults (5% of the total) fell victim to identity theft (including credit card theft) during the past five years, far higher than anyone suspected. Even if you discount the results due to survey methodology, identity theft claims more than one million victims a year, a huge problem.

Luckily, the private sector stepped up to the table with consumer protection services. Identity Theft 911 appears to be an early leader, offering insurance, victim resolution services, credit report monitoring, and educational material. The company markets directly to consumers, but its business model revolves around wholesaling services to banks and corporate employee-assistance centers.               

Class of 1998

Four of the top-20 innovations debuted in 1998. Only one exists today in the same format, albeit under new ownership: LendingTree.

Table 13

The Top 10 Annual Innovations: 1999 to 2002

Source: Online Banking Report, 1995 – 2002                  *Due to high activity levels, two lists were prepared in 2000.

Table 14

The Top 10 Annual Innovations: 1995 to 1998

*The 1995 Top Ten is not directly comparable to other years; it simply lists the top 10 financial Web sites
  of the year according to the criteria

Online Banking Report has covered online banking for nine calendar years beginning in 1995. In that time, we’ve seen the industry go from a premium-priced niche service used by just one of every 300 households to a mostly free, mass-market offering used by one of every three households. Following is a list of the top 25 online banking innovations of all time. There were two additions this year, Online Resources “Money HQ,” at number 15, and PSECU’s Upost@home at number 23.  

Table 12
Top 20 Web Banking Innovations of All Time (North America

Source: Online Banking Report, 12/03

The fake Citibank email (below) fooled so many users that the bank took the unusual step of posting a warning on its home page (screenshot left). Last month, Absa Bank did the same thing, to educate customers about the keylogging security breach at the South African bank.

Fake Citibank email.
(Source: Bankers Online, 8/18/03)  www.bankersonline.com/operations/custserv_infosec.html

Royal Bank of Scotland

http://www.oneaccount.com/

Royal’s Elegant OneAccount Demo

The animated demo does a great job explaining the innovative account (access the demo under “How the OneAccount works,” then choose “Detailed Guide”).

We’ve looked at hundreds, no make that thousands, of online demos, and Royal Bank of Scotland’s OneAccount demo is one of the best. The OneAccount, which now boasts over 100,000 users, is an award-winning* mortgage product that combines debit (checking, savings) and credit accounts (mortgage, loans, cards) into a single master account that minimizes interest paid by continually paying down the mortgage balance with excess funds. It was launched in 1998 with Virgin, as the VirginOne account. You can still get to the product from Virgin’s UK finance site,  http://www.virginmoney.com/  but the program is now wholly owned by Royal Bank.

The yellow-and-blue online demo shows a faucet filling different “buckets” from water drawn from the outline of a home. The only sound is that of water being poured and the stamp of credit obligations being paid off. The demo is fast and effective and does a great job reinforcing the elegance of the OneAccount solution.

The account used to be known as VirginOne.

*The product was even called a “disruptive technology” by author
Clayton Christensen at a Retail Delivery keynote a few years ago.

MBNA
http://www.mbna.com/

Free Credit Report Monitoring for New
MBNA Worldpoints Cardholders

NEW! Free Protection
from identity theft

MBNA E-lert

-- teaser copy on direct mail 9/12/03

MBNA, the Wilmington, Delaware-based credit card giant, is bundling daily email credit report monitoring with its WorldPoints Platinum Plus MasterCard. The MBNA e-lert service, powered by Intersections Inc., checks the cardholder’s Equifax credit file every day and provides email notification of significant events such as a credit inquiry, new account opened, address change, and so on. Users also receive a monthly email if no changes have been detected.

Innovations:

<     Offered free-of-charge compared to $9.99/mo on the MBNA/Intersections co-branded PrivacyAssist site  http://www.mbnaprivacyassist.com/ 

<     In a preapproved direct mailing we received Sept. 13, the e-lert service was featured prominently with “teaser copy” on the outer envelope (see above, a 0% interest rate offer was also on the envelope) and a one-page insert dedicated to the new feature.

<     The sales rep we talked to on the phone was conversant in the benefits of the service.

Caveats:

<     There is no mention of the service on the MBNA website  http://www.mbna.com/  the rewards site  http://www.mbnaworldpoints.com/  or the account access site  http://www.mbnanetaccess.com/   so it’s probably a test.

<     In order to maintain the free credit monitoring service, cardholders must make at least one retail purchase every 90 days.

<     The service does not include access to full credit reports; presumably they would be cross-sold, perhaps even paid for with rewards points.