We were somewhat surprised to see the auction site, eBay.com, take first place in one measurement of Web popularity, total number of minutes logged at the site during the month of February, at least for males. Number one for females was Pointcast.

Online auctions are becoming a major retailing opportunity on the Internet with eBay alone delivering eight million page views per day as users bid on 368,000 items on the block. How could a bank become involved in this phenomenon? We see four ways:

1. Handling the funds flow and acting as an escrow agent to protect both buyers and sellers

2. Hosting the auction on the bank’s server. Auctions could be open to all buyers and sellers, or limited to charitable fund-raisers (see #30).

3. Setting up a co-branded site with an existing auction company such as Cendent’s NetMarket.

4. Setting up deposit auctions where bidders post the minimum interest rate they would accept on a given deposit, with the low-bidder winning the right to deposit funds at that rate. We’ll expand on that idea in a future OBR.

The software necessary to operate an auction is readily available from OpenSite www.onsite.com which is currently in use at 70 Web sites, and others. We found
33 providers listed on Yahoo! (search for “auction software”) with prices as low as $20/mo for complete auction hosting, or $395 for turnkey auction software.

With 30% of Web users already searching for automotive information online online car information is crucial if you are serious about originating car loans online You can build a completely private-branded site using services from Cendent or others, or simply provide guided links to major car research outlets www.yahoo.com/Recreation/Automotive/Buyer_s_Guides Another approach is demonstrated by PNC Bank , which created a simple auto price quote service using its contacts with Pittsburgh auto dealers.

Whatever approach you take, make sure you include a link to the used vehicle prices at the online version of Kelley Blue Book <www.kbb.com>. This free service provides the trade-in and resale values you’ve been giving away for years.

How many times have you looked at the price you paid for something 20 years ago and wondered what it would cost at today price levels? You could become the source for answers to economic questions by posting basic statistics or providing guided links to other sources. For example:

•  mortgage rates, current and historical
•  prime rate, current and historical
•  t-bill rates, current and historical
•  historical rates of return for different investment vehicles, especially stocks
•  inflation rates, current and historical; including a calculator to compare purchase prices across different years

Q&A forums are a nice addition to a Web site if they are sufficiently promoted, monitored closely, and made easy to navigate. I would guess that 9 out of 10 online forums fail on one or more of these counts. A poorly done forum is worse than no forum at all; so if you go down this road, make sure you’ve put the resources in place to keep it moving. Here are the keys to a good forum:

•  Sustained online and offline publicity to attract an audience of posters, especially at the beginning.
•  Enlisting a few sympathetic and/or articulate customers to make initial posts.
•  Seeding the forum with provocative discussion topics.
•  Creating “events” with virtual visits by experts or local celebrities to answer questions. Netscape posts interviews with experts to spark online forum participation
•  Monitoring the postings daily to immediately resolve any concerns related to the bank and remove spam or vandalism. As an early-warning system, you might want to have an email generated to a bank officer each time a new post is submitted.

Calculators may not fit in the category of “non-financial content,” but they’re so important they mustn’t be overlooked when contemplating Web site enhancements. Calculators can be easily outsourced from SmartCalc www.smartcalc.com and others for a little as $100/mo. We’ll profile SmartCalc in next month’s report on online mortgages.

The main goal is to provide visitors with new tidbits of information each time they visit. And as the archive of tips grows, you’ll eventually have a whole new content area. But to make it valuable, you’ll need to go back and update older tips from time to time (another job for the Webmaster-in-Residence).

The subject matter for tips can vary widely, but you’ll probably have the most success in the area of personal finance or local events/resources. For example, around tax time post a tip on where to find downloadable tax forms online. The tips can be self-serving every once in a while as long as they focus on service improvements (e.g. we’ve reduced the approval time for loans submitted online to 90 minutes, click here for more). You’ll lose credibility, and readership, if the tips blatantly sell a bank products.

For ideas on establishing a local directory, see what InfoSpace already delivers for your market.

There are thousands of directories on the Web. They range in size from huge repositories of data on 11 million businesses, down to tiny listings such as the nine golf courses in Story County Iowa.

Financial institutions wishing to build a directory for their Webs have a number of ways to go:

•  Target a very small community not available from the big directories.
•  Choose a tightly defined neighborhood within a larger metro area.
•  Choose a vertical market such as “Farming” and create a directory pertinent only to that group.
•  Work with one of the major directories such as InfoSpace.com (screenshot above) to create a co-branded site for your Web.
•  Concentrate on banking-related information such as ATM and branch locations, check-cashing outlets, coin redemption machines, etc.

In addition to the Community Calendar presented last month there are many ways to use your Web to further your community service goals. Consider using a Webmaster-in-Residence to run these programs to minimize the impact on your staff. The bank would “pre-qualify” participating charitable organizations so donors knew their time, money, or equipment was going to a good cause.

Being an emerging business ourselves, we would cherish, even pay for a good source of Web-based small business management information. Not that there isn’t a lot available online. A search on “small business” on AltaVista turns up 415,000 documents.

But which of those hundreds of thousands of sources provides concise and accurate information? Small business magazines such as Inc. provide a wealth of general articles and case studies but lack specific regional resources needed by businesses (e.g., sources for business liability insurance in Omak). A bank, or anyone else for that matter, could make a name for themselves online by providing vital small business resources in an unbiased fashion.

Our September report detailed 45 online programs that financial institutions could offer business clients including these five non-financial areas:

Non-Financial Business Services

• virtual shipping center
• virtual research center
• virtual professional services center
• virtual customer network
• virtual business concierge

In September, we were surprised to find that only 19 banks showed up on Yahoo when searching on “small business” and “bank.” We are even more surprised to find the number remains little changed six months later.

One reason more banks aren’t offering small business services is that they are difficult to make relevant and keep up-to-date. It can also be difficult for a bank officer to put themselves in the shoes of a small business owner. For those reasons, we recommend using either a Webmaster-in-Residence or outsourcing the area to small business experts. Corestates www.corestates.com used the latter approach, licensing their excellent small business area from Entrepreneurial Edge Online www.edgeonline.com

Using the process outlined in the community calendar database create a database of educational information and schedules for use by area students, and more importantly their parents.

Authorized teachers and administrators could access password-protected forms to post student activity schedules, homework assignments, announcements, lunch menus, school closings, etc. on your Web. For maximum exposure, consider a unique domain name such as www.yourtownschools.com

• Augment the database/calendar with:
•  Guided links to research sources appropriate for homework assignments.
•  Student forums moderated by area educators.
•  A resources section where tutors, guidance counselors, churches, and others could contribute items of interest to area students.

Besides the three E’s: email, education and entertainment, the primary use of the Web is searching for information on a product, company, purchase, etc. But new users, and experienced ones as well, can become exasperated by the prospect of finding the proverbial virtual needle in the Web haystack.

You could offer newcomers guided links to the major search engines. Your guidance should include a few words of advice so users can minimize the time spent in fruitless searches. Separate guides could be posted for business users, intermediate users, and newcomers.

But don’t try to do this yourself. With search engines changing practically every day, your advice will quickly become outdated. Enlist your Webmaster-in-Residence or an outside Web consultant to keep this area up to date.

You might be thinking: Does the Web really need one more place to get stock quotes? Well, not really, but does the United States really need 100,000 bank/CU branches, 3,000 mutual funds, or checks with bunnies on them? No, but consumers use them, so they live on.

Online users love stock quotes. America Online has 13 million portfolios registered in its Personal Finance Channel and is delivering 60 million quotes to 630,000 users each day. So, why fight it?

Contact one of the quote engines such as Quote.com products.quote.com/fq/products/banks.html  and get this service added to your Web in 1998. It’ll set you back a few grand, but your customers will use it, and more importantly they won’t be logging on to Yahoo! or Microsoft Investor seeing your competitor’s ads every day.

For a list of major stock quote providers refer to www.yahoo.com/Business_and_Economy/Finance_and_Investment/News/Quotes/ Try to license a service that allows users to set up a portfolio of companies/funds so they don’t have to key in ticker symbols each time. If you haven’t recently used an online quote service, take five minutes and build a portfolio at quotes.yahoo.com

Since online banking is new and takes some effort to master, we think it makes sense to entice and reward new users with a usage-based sweepstakes or reward programs. Small, frequent prizes provide more opportunities to communicate with users and prospects. Case in point: SecureTax has been giving away $1,040 each Friday to a winner culled from entries received that week. Losing entrants receive an email inviting them back to enter again.

For $1,000, a bank or credit union could hold a monthly drawing for a Compaq 200 MHz PC and monitor (cost = $900), a year’s worth of free bill payments (cost = $60), and 12 movie rentals (cost = $25) to watch during their extra leisure time resulting from banking online.

Run the content for six months with contestants getting an automatic entry each time they log in to your Web for home banking (limit one entry per day) and/or each time they pay a bill. Post winners on your Web site, and email each non-winner encouraging them to try again. The emails could include brief tips to educate users on specific online banking features. For example, “Did you know that you can transfer funds as late as 7:00 p.m. for next day credit.”

Another online game appropriate for financial institutions is a “stock market contest.” The premise is simple: bankroll players with a wad of play money and let them compete with each other over a set period of time to see who can rack up the biggest gains. Players can be divided into leagues depending on age, experience, profession, bank branch, etc. Post the results on your Web with automatic daily portfolio value updates.

It’s too late for the 1997 tax season, but you could get a head start on creating a tax prep area for next year. We covered this in detail in January but to reiterate a the key points, working with a partner such as SecureTax, you can offer:

•  guided links to tax resources
•  free tax prep for basic returns
•  under $10 printing and/or electronic filing
•  database of tax preparation professionals

A perfect adjunct to your other virtual banking services, Virtual Safe Deposit Boxes provide secure and private storage of digital valuables such as:

• userid/passwords
• digital certificate back-up copies
• email archives
• Quicken/Money back-up files and archives
• electronically prepared tax returns
• all back-up files
• household inventory
• off-site storage of daily business records
• scanned photos/documents (scanners could be located in branch-based kiosks for self-service)

Since consumers are accustomed to paying $20 to $50/yr or more for a physical safe deposit box, the virtual box could be a successful fee-based item. But we think it would be more useful as a free enhancement to increase interest in your online banking program. An attractive hybrid would allow “x” number of documents to be stored free with fees for additional storage.

Here’s a service you can offer big and small businesses alike: Web-based expense reports. Given the potential cost savings, it could be generate fees of $5 to $10 or more per transaction or more. Here’s how it works:

1. Employee (of your client) logs into your Web with userid and password.

2. The company’s expense report template is displayed showing data from the employee’s most recent report. Employee keys in new data and hits submit. Previous reports are archived on site.

3. The report is emailed to the employee’s supervisor. Receipts would be mailed off-line.

4. If approved, the supervisor authorizes reimbursement with a secure email or entry on your Web site. If not approved, the employee receives an email with further instructions.

5. The bank deposits the money in the employee’s account, and/or pays off the business credit card.

A simpler approach is to stop at step four and let the emailed expense report route through normal company channels for reimbursement.

Provide guided links to telecom services: long distance, Internet services, Internet phones, stored value cards, business services, fax mail, phone equipment, fax machines, answering machines, answering services, voice mail services, toll-free number services, online yellow pages, online white pages, etc.

For added revenue, prepaid telephone services can be bundled with existing banking products. First Chicago bundles prepaid long distance on a call center access card. US Bancorp bundled prepaid long distance with an ATM card (recently discontinued after merging with First Bank System).

Establish an area on your Web where users can send faxes worldwide simply by typing their message online. This service would be beneficial to business travelers needing to fax messages to clients and prospects on the road. It could also be used as a crude printer, should the traveler need to print a quick memo by sending a fax to the hotel where they are staying

For consumers, faxing could be offered at no charge (with a cap on usage) to enhance your online banking program, or for a small transaction charge. You would almost certainly need to charge business users a transaction fee given their wide variance in usage. Figure you’ll pay a service provider about $0.05 per page faxed domestically and $0.09 and up for international faxes. Yahoo! lists 73 fax providers at www.yahoo.com/Business_and_Economy/Companies/Office_Supplies_and_Services/Administrative_Support/Fax_Services/

Far more involved than the other ideas, statement consolidation involves strategic partnerships, systems integration with other companies, moderate-to-heavy programming, and extensive user education. But the payoffs are much higher as well, potentially offering a long-term source of service differentiation.

Barclays (London, UK; $325 billion USD) is the first bank we’ve seen use this approach. Six merchants in its BarclaySquare online shopping area participate in the SmartStatement program which combines purchases made at all participating merchants onto one convenient online record of past purchases, status of pending orders, and account informatioin.

Barclays is pioneering integrated online statements at its UK Web site www.barclaysquare.co.uk

Barclay’s effort is just the tip of the iceberg. Financial institutions could create a statement consolidation “engine” that integrates all types of non-financial statements with bank and credit card account info. For example, a user checking on a bank balance could also click on a utility statement or frequent flyer mileage statement. Below are some of the statements that could be integrated into a personalized statement area running on your server, e.g. <mystatements.yourbank.com>:

The logistics of a fully electronic integrated statement is beyond the scope of this Report, but you could start with something simple and local. Using the Quicken approach, users could do their own data entry on your Web site. ð

For example, frequent fliers would enter their account balances manually each month. You could make the task simpler by prompting users for input each month through Web-based and/or email-based reminders. Emails could have a hyperlink to the Web-based input form, or the email could serve as the input form allowing users to update their database by replying back to the email with new numbers.

Of course, any program requiring users to enter data month after month will have limited appeal. Many of the users wishing to track matters so closely are already doing so with Quicken or a spreadsheet.

The more exciting possibilities are hosting statements published on the Internet. For the large national merchants, you will probably need to wait for the solutions being rolled out late this year by MSFDC, Checkfree, Princeton Telecom and others. But statements from smaller billers in your market could be published on your Web.

For example, your business clients may have an account at a local printer. The printer might be interested in publishing billing statements on your Web provided it fit within the parameters of their existing billing procedures and it promised faster payments. For larger billers, you could work with an Internet billing solutions provider to develop a data feed directly from the biller’s accounting software or print stream to your Web.

Smaller merchants could simply input the billing data directly into a password-protected form running on your Web. The printer’s bookkeeper would log in and update customer records with the amount due, transaction detail, etc. Upon hitting “Send Bill,” the bill summary would automatically be loaded and archived on your Web, and an email or fax would be sent to the biller’s client inviting them to your Web to make payment. Billers could even send second notices by logging into your Web, accessing the unpaid bill, and clicking “Send Second Notice.”

We see real benefits to statement hosting, especially for community banks and credit unions:

•  Simplifies billing and collection for small companies.
•  Provides an opportunity for you to be the first in your market to offer “bill presentment.”
•  Adds value to your home banking services.

Use Non-Financial Content Areas to Support Your Online
Strategies with: Currency Converter

There are hundreds of currency converters on the Web, unfortunately, I can
never remember where they are when I need one. That’s why it makes sense for
banks to offer currency conversions on their Webs. The bank is an easy place to
remember and it reinforces your position as the place to go for commerce-related
information. You can private brand the service as demonstrated by TheTrip.com in
the screenshot right or simply post guided link to a good currency site such as
www.oanda.com

The currency converter used by TheTrip.com runs on OANDA’s Web site
www.oanda.com It includes current
and historical rates for any day back to 1990.

Integrate currency converters with banking services geared to international
travelers such as:

•  Include a Purchase Foreign Currency button that allows users to send
  themselves foreign currency and/or preorder for pick-up at a branch


•  Sell Two-Minute Travel Loans or Traveler’s Assurance Credit Lines
  that provide travelers with a little more pocket change for the trip, or improve
  their peace-of-mind with an emergency reserve accessible via ATM. By all means,
  make the loan application ultra simple and fast. Users researching a vacation
  won’t sit still for a lengthy application process.

The Web is already loaded with information on current movies playing in theaters and those released on video. You could add a layer of local information, such as theater schedules, to draw visitors to your site. If theater schedules are already available in your market, a simple guided link to that Web might be all that’s needed (check first with the company for cross-promotional opportunities).

But if no one has taken this on, consider creating a simple database that can be displayed on your Web (using the database structure described in #9, OBR 2/98). Theater and video-store owners could access a password-protected form to input schedules, reviews, and specials.

For video sales, you could provide guided links to major video sellers on the Net, select from more than 500 at www.yahoo.com/Business_and_Economy/Companies/Entertainment/Video/Tape_Sales or to InfoSpace  www.infospace.com , which provides a meta-search tool that links into the databases of several major video merchants. Be careful to steer clear of adult material. You don’t need that kind of publicity.

Another benefit to offer movie buffs is online ordering of discounted tickets for major theater chains such as Cineplex Odeon. We’ve used FFFCU’s Web site https://www.fffcu.org/market.htm to order tickets and found it to work flawlessly. Discount tickets are also available through Cendent/CUC's netMarket www.netmarket.com
that can be cobranded for your financial institution.
Contact: Greg Constantine, CUC Strategic Marketing, (615) 371-2763, gconstantine@cucstrat.com

Movie content as profit center? Barclays (UK) offers free videos for loan applications in March. The promotion is running on the bank’s main page www.barclays.com

Real estate content is one of the most effective Web site enhancements for financial institutions. In many parts of the country, consumers are actively using the Web to locate a new home or plan remodeling projects. Realtor.com alone currently has 1.1 million homes listed for sale (3/30/98) and is showing 88 million homes per month. With those kind of numbers, it’s no surprise that Yahoo!, Intuit, and Microsoft www.homeadvisor.com are moving into this space.

Last year, we covered online mortgage lending and ancillary real estate services in a two-part series. Next month we’ll bring you up to date on the burgeoning online mortgage market and take a look at real estate content such as:

•  Realtor networks (find-a-Realtor service).
•  Advice for homeowners such as www.hometime.com
•  Mortgage calculators from SmartCalc www.smartcalc.com and others.
•  Home value reports culled from public home sales records
•  Home improvement value calculator.
•  Contractor database (find-a-contractor service).
•  Guided links to homeowner information.

Travel clubs have long been a staple of thrift’s serving the senior market. With 38% of households age 55-64 and 21% of 65+ owning a computer , the Web is becoming a cost-effective way to market to older adults.

Use the Web to supplement your existing travel club, or as a venue for travel services and/or information aimed at younger customers. Be realistic though. You cannot hope to compete with well-funded travel-oriented Web sites. Here are four ways to cost-effectively incorporate a travel theme within your Web:

•  Offer flight tracker from TheTrip.com (see #13).
•  Offer cobranded airfare information and reservations such as that offered by Microsoft Expedia. Even travel giant American Express recently folded its own online travel reservation in favor of a co-branded program with Microsoft.
•  Guided links to travel services.
•  Build a local travel agent database. Travel agents would be encouraged to post specials and last-minute bargains on your Web at no charge (banking relationship could be required). Use the database structure described in #9 to minimize your involvement. You could also handle payments on your server, so users could purchase the specials with a click of a button.

American Express has discontinued its online travel reservation service in favor of Microsoft Expedia’s new associates program (effective 1/22/98) www.americanexpress.com/travel

According to CyberDialogue , travel information is the single most sought after item on the Web, searched for by 38% of Web users. Tap into this interest by posting easy-to-use travel info, such as the flight-tracking services of TheTrip.com www.thetrip.com. Other providers of online travel reservations are listed at www.yahoo.com/Recreation/Travel/Air_Travel/Online_Reservations .

We rate TheTrip.com as one of our 10 most useful Web-based consumer services. The privately held company targets the 5.8 million business travelers it says are using the Web. Besides being fast and easy to use, TheTrip.com is surprisingly free of advertising clutter.

TheTrip’s graphical flight tracker uses Java.
The text version (below) is much faster and easier to read, though you can’t watch a little plane (by the seond N in Pennsylvania) cross the map.

Bookmark this: Flight tracking at TheTrip.com.

Source: TheTrip.com

TheTrip.com provides information in just about every travel category you can think of including rental cars, hotels, airport info, low-fare searches, email-based bargain fare alerts, city guides, travel tips, along with a smattering of original editorial content. But the feature we think most appropriate for posting on a financial institution Web is the real-time flight tracker (screenshots left).

Simply enter an airline name and flight number. Literally within seconds (on the text version), you’ll see the complete flight status including the estimated time of arrival, flight speed, altitude, and exact geographic position (see table below left). The information changes every few minutes based on national radar data, so you can monitor exact arrival times (allowing you to leave for the airport at the very last minute!). We’re not sure what you do with real-time flight speed and altitude, but it’s impressive as hell anyway.

We like this service for banking Webs. Why?

•  Easy to use; just fill in two blanks and press enter (Warning: use the text version, the graphical Java version in beta is s......l.....o......w).
•  Useful to anyone who flies or picks someone up at the airport, especially business clients.
•  New and impressive — just the ticket for creating positive word-of-mouth about your Web.
•  A PR opportunity.
•  Does not compete with local travel agents; in fact they might use it themselves.
•  Can be used as a platform to cross-sell banking services geared to travelers such as online banking, travel loans, foreign exchange, etc.

There are a couple ways to incorporate flight-tracking services into your Web. The easiest: a simple guided link to the TheTrip.com, possibly running within a frame if the company agrees to that approach, or work with them to create a private or co-branded service delivered through your Web. TheTrip.com is currently distributed through US West’s DiveIn, AOL’s Digital Cities network, CBS, USA Today, Carlson, Infospace, Pointcast, Business Week and others.

A more involved approach would be to layer local information on top of TheTrip.com’s flight tracking. For instance, airport parking, transportation to and from the airport, traffic reports, weather forecasts, travel agent database, and so on. See #14 on the following page.

Contact: Antoine Toffa, formerly GM of Product Development for U S West Interactive Services, is CEO, atoffa@thetrip.com , (303) 708-7247.