The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Online Banking’ Category

Generations online 2009 and their usage patterns | PEW

A couple of interesting things from this new PEW report.

  1. The pervasiveness of online usage – only over 69 is there less than 50% usage online – refer below
  2. Gen Y is doing more and more banking online moving from 38% to 57% – older folks use internet for information, health and purchases.

Generations Online in 2009 | PEW

Contrary to the image of Generation Y as the “Net Generation,” internet users in their 20s do not dominate every aspect of online life. Generation X is the most likely group to bank, shop, and look for health information online. Boomers are just as likely as Generation Y to make travel reservations online. And even Silent Generation internet users are competitive when it comes to email (although teens might point out that this is proof that email is for old people).


Written by Colin Henderson

January 28, 2009 at 20:18

Posted in Online Banking

Semantic search is closer than we think – some free tricks for banks

There is much talk of the semantic web as the next generation of internet. It is a little understood concept, and it is always assumed it will be seen as a new release of search – something dramatically different.

Wikipedia: making it possible for the web to understand and satisfy the requests of people and machines to use the web content.

The reality of the semantic web appearing might be different that we realise – in fact the advances in search that have quietly been implemented take us a long way towards the notion of search that works as humans do.


at type in “7.8 kg in lbs” [witout the quotes]

Result = 7.8 kilograms = 17.1960565 pound

Dozens of other similar features at google – Search features

Try others:

100 canadian dollars in pounds

Result = 100 Canadian dollars = 58.8714763 British pounds

Site specific search tricks

So lets get more advanced – I tried these two searches in

1) rbc branch toronto

2) where is rbc branch in toronto

Search 2 is orders of magnitude more relevant with google maps and maps searches highlighted.

Site searches: Getting more sophisticated, I tried these:

1) on I searched “branch toronto”  [no quotes}

2) on i searched "branch toronto" [no quotes]

Search #2 tells google to search for ‘branch toronto” only on  Guess what – #2 won out with branch information after a few rbc history things.  The search [#1] displayed pdf’s after search item #4.

The research here followed reading this item at Googlewatch who noted that semantic strings were showing positive results.

Relevance to Bankwatch:

Search sophistication has moved ahead in ways the average person does not realise.  The people at Google are in fact scientists, and the notion that we in industry can buy / build a search capacity that comes even close is unlikely.  Better to ensure everything online at your web site is optimised and accesible to google (and others) and let them manage the heavy lifting.  Your customers will appreciate it, and you have one less thing to worry about.

Why not offer -

site:[search item]

to customers on your site?  Implementation instructions are here.  Here is my search for my site.

Written by Colin Henderson

January 24, 2009 at 21:09

Posted in Online Banking

Tagged with

Barclays fall into the trap of trying to position secure messaging as email

Finextra have lots of news today it seems.  This one caught my attention because its one of my own pet peeves going back 2 1/2 years when I referred to secure email as a fiction. 

Barclays chooses Kana messaging technology | Finextra

KANA Secure Messaging combines email management with secure Web portals and provides simple and effective secure customer communication through Web channels, delivering private communications without the need for encryption applications.

The reason its a fiction is that the various solutions all take the customer into a web page, that must be logged into, or require some additional software.  These solutions are all perfectly valid opportunities, but lets not call it email because it is not email.

Relevance to Bankwatch:

Customers are already in online banking with a login and password.  Its a mistake to think that another login and password is required.  Simply build out the messaging capability within online banking, and you have a one stop shop for customers.  Companies such as Kana can accommodate that, so no need for ‘yet another login’.

Written by Colin Henderson

October 30, 2008 at 00:53

Posted in Online Banking

Wells Fargo significantly advance their spending analysis tools online

This is a significant move, when we can have a headline that points to a Bank entering start up territory.  Wells have always been impressive, and the proof will be in the implementation. 

Wells Fargo moves into PFM start-up territory with new budgeting tool | Finextra

Wells Fargo is to make a bid for online banking territory currently occupied by niche Web 2.0 start-ups such as Mint with the launch of a personal Web-based budgeting tool for consumers to monitor their spending habits.

The new tool, dubbed My Spending Report with Budget Watch, gives customers a consolidated view of their spending across their Wells Fargo accounts. Outgoings can be sorted into familiar categories – such as groceries, rent, petrol – and users can set and monitor monthly budget goals and calculate what’s left at the end of each month.

They laid the groundwork 3 or 4 years ago when they launched a spending tool, and inexplicably that went relatively un-noticed by others.  This is one to watch.

Technorati Tags:

Written by Colin Henderson

October 30, 2008 at 00:35

Posted in Online Banking

IBM makes pilot security devices available for financial institutions to trial

IBM come out with an innovative security measure that actually makes sense.  It makes far more sense than the two factor authentication tokens many banks have been wasting their time with. 

It also sounds like it requires no work on the FI end – so its a no brainer to trial this one!

IBM unveils USB stick to fight online banking fraud | Finextra

IBM has unveiled a prototype USB stick designed to secure online banking transactions against malware and man-in-the-middle attacks.

The Zone Trusted Information Channel (ZTIC) plugs into the USB port of any computer to add an extra layer of security on top of existing authentication systems like smart cards, PINs and one-time validation codes.

This device in simple terms bypasses your PC and goes straight out over a secure connection to your bank. 

What the user sees on the ZTIC display is identical to what the server "sees".

In addition it can be supplemented by a smart card log in.

Relevance to Bankwatch:

Kudos to IBM for this.  The two factor tokens to date are not protection against all possible attacks, including man-in-the-middle in particular.  While I have always felt consumers would balk at an additional device, that view was qualified by the limited benefit. 

If in fact a device exists that guarantees security, then that is completely different story.

Views in support or to the contrary welcomed.  This is an important topic for ecommerce, and for online banking.

Written by Colin Henderson

October 29, 2008 at 23:33

Is your Bank properly aligned to the new competitive threats | Case Study – Microsoft

Many of us complain about Microsoft, but this Arrington post at TechCrunch caught my attention because it highlighted larger picture of the environment of the company that appears not to see the competitive forces surrounding them.

Microsoft Annual Report

To sustain the growth of our Server and Tools business amid competition from other vendors of both proprietary and open source software, our goal is to deliver products that provide the best platform for network computing – software that is easiest to deploy and manage, and that is most secure – with the lowest total cost of ownership.

# of mentions:

linux – 9

Open source – 1

Live™ – 22

Business Description:

Client – Operating Systems

Our operating system products compete effectively by delivering innovative software, a familiar, easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest support network for any operating system.

Server and Tools

We believe that our server products provide customers with advantages in innovation, performance, total costs of ownership, and productivity, by delivering superior applications development tools and development environment, compatibility with a broad base of hardware and software applications, security, and manageability.

Online Services Business – includes Search, Live, Hotmail

We believe that we can compete effectively across the breadth of our Internet services by providing users with software innovation in the form of information and communication services that help them find, discover, and experience what they want online and by providing merchants with effective advertising results through improved systems and sales support.

Microsoft Business Division – includes Office, Sharepoint

We believe our products compete effectively with these vendors based on our strategy of providing interoperable, adaptable solutions that work well with technologies our customers already have.

Entertainment and Devices division

We think the Xbox 360 is positioned well against competitive console products based on significant innovation in hardware architecture, new developer tools, expanded revenue sources, and continued strong exclusive content from our own game franchises such as Halo.

In reviewing the five business divisions and their comments on competition, a couple of things stood out:

  1. they do a good job at summarising the breadth of competitors
  2. the comments on Microsoft’s strengths relative to the competition (shown above) are less clear.

Relevance to Bankwatch:

The general assumption amongst commentators today is that Microsoft is not well placed in Browser, Search, Online Advertising and future shifts of enterprise office applications into cloud computing environments.  What struck me in this brief review is that challenge is spread across three divisions, Client (Browser), Online Services Business (Search, Advertising), and Microsoft Business Division (MS Office).  This may seem rational at first because the nature of search/ advertising is different than office applications … or is it? 

I look at Google Apps, and Gmail, for example, and search is a key component of both.  Yet the Microsoft Search team are in a different team than the Office group.  But the real stunning point is that the Internet Explorer Browser, the fundamental requirement for all the pieces is alone in the Operating System division! 

This is an organisation destined to fail, because the components for success are not aligned.  Why am I commenting on this here, apart from the fact I care about Microsoft?  How well is your Bank aligned for addressing the components of future success?  Lets look at some Banking examples to wrap this up:

In your Bank …

  1. who owns social media ?
  2. who owns advertising?
  3. who owns customer experience
  4. who owns the web site – public
  5. who owns online banking?

then .. in your Bank …

  1. who is thinking and planning social media ?
  2. who is thinking and planning advertising?
  3. who is thinking and planning customer experience
  4. who is thinking and planning the web site – public
  5. who is thinking and planning online banking?

In times of disruptive competition, its worth looking at the world as others see it, versus how the old organisation sees it.

Written by Colin Henderson

September 14, 2008 at 15:10

Banks have to understand the ‘cloud’ and solve their security concerns

The latest report from PEW offers Banks something to think about.  The reality of cloud computing already exists, with a clear majority of internet users taking advantage of the convenience of cloud computing.

PEW – Use of Cloud Computing Applications and Services

Some 69% of online Americans use webmail services, store data online, or use software programs such as word processing applications whose functionality is located on the web. Online users who take advantage of cloud applications say they like the convenience of having access to data and applications from any Web-connected device. However, their message to providers of such services is: Let’s keep the data between us


And while the usage of cloud computing is heavily skewed to youth, it is still heavily used by 50 and above.


However the most important point in the report should be lost on no-one.  The reason people use them is nothing more esoteric that convenience.


That’s convenience that can be summarised from three key aspects.

  1. Easy to use
  2. easy to share
  3. Information is not lost in event of computer failure

The corollary to #3 is that people trust cloud computing.  Speaking personally, the number of times I have had to change laptops, has been dramatically simplified because of the cloud.  Another example of convenience is cross devices.  I have been in a meeting, and needed some information, with no laptop or wireless connection handy.  I can search my gmail from the Blackberry gmail application.  The implication of my information being in the cloud is that its simply retrievable anywhere.

Another example:  At CommunityLend we are building an application with developers and editors in multiple locations and timezones.  With the use of Github, we are able to maintain version control, yet share an entire application with everyone working locally on the latest version, without concern for overlapping versions.  Take that scenario, and apply to business documents.  Establishing true version control, and maintaining convenience is hard, and the future of productivity for business users must be in the cloud. 

Relevance to Bankwatch:

For consumers, cloud implications for their financial data might be:

  • use of wesabe or mint
  • how about an open API for online banking that negates the need for customers to provide their usernames and passwords to other services

In other words Banks have to get their head around the cloud, and solve their security concerns, not hold them up as roadblocks.

Written by Colin Henderson

September 13, 2008 at 15:57

Online bill pay represents a huge cost, that will drive irrational Bank behaviour

Before 1996, and the advent of online banking Banks made money from bill payment.  Each bill paid required a cheque that incurred service charges, or an in branch payment, that incurred a fee.  No more.

Online bill pay to cost US banks $1bn by 2010 – TowerGroup

The provision of free online bill payment services to retail banking customers will cost the US financial services industry $1 billion by 2010, according to research from TowerGroup.

The research house estimates that nearly 24 million Americans currently use electronic bill payment and presentment services (EBPP). Usage is increasing at a compound annual growth rate (CAGR) of 18% and is set to rise from 2.11 billion transactions in 2008 to 3.87 billion in 2012.

The reality, 12 years later, is that bill payment is an expected service, and one that is a net cost to Banks. 

In time I would expect some Banks to attempt to recoup this cost, or avoid it by altering their fee schedules. 

Banks in the US are attempting to offset these costs, with charges for expedited payment.

One way in which banks can offset some of the costs is by charging for expedited bill payments. TowerGroup says many customers are willing to pay to ensure that payments are made within 24 hours to avoid being charged for late payments.

The report forecasts expedited payments growing at a CAGR of 38% through 2012, reaching 19.35 million transactions and revenue of $101.6 million.

Relevance to Bankwatch:

While online banking has become the norm and offered by every bank, bill payment results in significant cost, including customer service and expensive telephone banking costs to manage errors.  In light of the pressures on profitability we can expect some Banks’ to attempt to recoup costs associated with online banking and bill payment in other fees.  This will be disastrous in my view.

Written by Colin Henderson

August 28, 2008 at 21:56

ebank Japan | designed to exploit internet channel

Chris posts about eBank in Japan. They are an exclusively internet Bank and some of the statistics are staggering. They have $8 bn in assets, and yet only 195 employees.

eBank purely exists as an internet bank, accessible via any internet-attached device which, these days, is predominantly the mobile phone. eBank, because of this exclusive channel focus upon internet-based banking, built a bank specifically to exploit this channel. This is radically different to most banks that built internet banking as an additional channel to exploit the existing bank.

They are built for pure automation wherever possible. The account open process is automated, using optical recognition and automated identity verification.

Worth the read.

Written by Colin Henderson

July 15, 2008 at 10:55

Bank of America and PayPal are Only Financial Brands in Apple’s App Store at Launch | Netbanker

I have been following the iphone 3G launch with interest, and am shocked that Wells Fargo are not there. Hat tip to netbanker.

Creation of iphone apps is not that hard, small cost, high media return. Being based in California I would have expected …. sorry Wells but I have to make note of that. I hope its in the works.

Bank of America and PayPal are Only Financial Brands in Apple’s App Store at Launch (NetBanker)

Bank of America once again proved its mobile mettle as the only financial institution to have a native app available at the launch of Apple’s new App Store (note 1). PayPal also launched an app on Day 1 (see screenshot below). Both are free.

Written by Colin Henderson

July 11, 2008 at 01:06

Posted in Online Banking

Tagged with


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