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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
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Banking on the Web 2003 By Jeanne-Vida Douglas, ZDNet Australia March 03, 2003 URL: http://www.zdnet.com.au/news/business/soa/Banking-on-the-Web-2003/0,139023166,120272364,00.htm
Having overcome early teething problems with service levels and security concerns, online banking services in Australia are breaking new territory both in terms of the user base, as well as the range and quality of services on offer. According to research carried out by Nielsen NetRatings, 3.7 million people visited an online banking Web site in the month of December 2002, an increase of 16.2 percent over the number of visitors in December 2001. In terms of demographics, users of online banking services still tend to have higher-than-average levels of education and income, however the last twelve months has seen a shift away from the 20+ year old early adopters. Marcus Judge, general manager for e-commerce for the Commonwealth Bank of Australia, says mainstream acceptance of banking services is leading to an older demographic logging on in increasing numbers. "The pattern has been that the early adopters have been younger, white collar professionals, often working in IT," Judge said. "However, now we have over 2 million people registered with online banking, and as it becomes more mainstream it attracts a wider demographic." Across the board, financial institutions are reporting seeing a surge in the number of users in the 50+ age group, whose needs they have to balance with more experienced users who are after increasing functionality. Patrick Kelly, marketing manager for direct financial services at HSBC, says many of the users attracted by the online service have been online for more than 5 years, and are demanding high services levels. "In terms of the service level requirement we are seeing a lot of fragmentation in the industry," Kelly explains. "Customers choose their bank based on its product in the first instance, but people are expecting improvements in the online service levels year in, year out." So far as the banks are concerned, if they want their customers to become regular users of the online service, they need to offer a service the customers are comfortable using. And it would seem financial institutions generally are not doing at all badly in the usability stakes. Measuring up the service Dr Adir Shiffman, founding director of Melbourne based Web site assessors Global Reviews, describes online banking as "the Internet's trailblazing industry" in terms of customer experience, however he says there is still a long way to go when it comes to e-mail-based support. "The online customer experience provided by banks is better than virtually any other industry," Shiffman says. "However, unfortunately offline support provided by e-mail operators is still not up to scratch." The high service level may well have to do with the level of competition present in the industry, with many financial institutions having established their service in the late 90s, and continuously improved on the functionality ever since. According to Shiffman, the past 12 months have been characterised by three key features which have lead to increased competition and service levels generally. "Rather than only providing transactional banking facilities online, most banks now offer a range of services including loans, savings, managed funds, etc," Shiffman says. "Smaller financial institutions have moved online whereas once only the larger banks operated in this space and Internet-only, or at least Internet-focused -products have emerged. Some of the smaller players now actually offer far more user-friendly services than their larger competitors." One company which is making its presence felt is the Community First Credit Union, which launched an attractive online savings offering by the name of Easy Saver, in 2002. Easy Saver has yet to establish itself among the big players, and while it doesn't appear in the Nielsen NetRatings' top fifteen online banking sites in terms of unique visitors, it did well in most recent Global Reviews' survey of online savings packages. "Without the Internet, these products simply could not exist. Whilst they were in the marketplace over 12 months ago, the past year has seen a large increase in the number of such products," Shiffman says. Describing the online offering as a "natural progression", Kerry McMorrow, general manager of marketing for Easy Street Financial Services, says the decision to move a service online would ensure the credit union was offering existing customers a range of options, as well as attracting new customers. "We need to ensure we are doing all we can for our members, and maintain high visibility in the market place so as to attract the attention of other organisations, as well as retaining our own customers," McMorrow said. However, not all credit unions are recent players in the online banking arena. Launched in 1997, the Australian National Credit Union's online banking service is amongst the oldest service offered in Australia. "The site has been relaunched and regularly updated since day one," says Andrew Hubbard, head of business systems for Australian National Credit Union. "There seems to be more people logging on as the functionality increases, but it also has to do with a reduction in channels of access." According to Hubbard, online credit unions are benefiting from bank branch closures and disgruntled bank customers seeking alternatives. As a result the online service focuses on customer service. "The majority of people who log onto the Internet seem to do so for the convenience factor, we try to extend the functionality as quickly as possible," Hubbard says. "Over the next year we expect to see the patterns of actually doing business starting to change in terms of the way people are interacting with us, and we'll continue to integrate those changes into the Web site and back end." Counting on the customers Online banking services based around specific financial packages such as ING Direct and HSBC, appear to be going from strength to strength, despite assertions by traditional banks that their presence is not being felt. According to Amanda Houlihan, ING Direct currently has more than 400 thousand customers, representing a deposit base of AU$8 billion, and while she says some of these funds have been lured away from banks, she attributed part of the growth to an increasingly risk-averse public. "We are getting people who are taking their money into safer havens, as well as people who have never saved before," Houlihan says. "Because they don't have to have a minimum deposit we have a lot of people come to us who have never saved before." Staving off criticisms regarding the long term viability of ING's attractive account offers, Houlihan points out that the Internet enables ING Direct to operate in a virtually overhead free environment when compared to the banks. "The day we open branches is when you will see our cost structures affected," Houlihan says. "We have made a promise to our customers never to introduce fees, and we never will." As HSBC's Kelly points out, customers base their banking choices on products, rather than Web site functionality, but nonetheless expect ongoing improvements to online services. Who's logging on and what's on offer in 2003 Despite the increasing prevalence of online credit unions and specific saving services, the big four continue to attract the majority of traffic to Internet banking sites. With a vested interest in migrating customers to online services, the banks have been keeping up the pace when it comes to Web functionality. Far and away in the lead is the Commonwealth Bank which attracts 1,187,000 unique users according to Nielsen NetRatings. Having launched in 1997, the Commbank Web site has matured and diversified into a range of offerings including credit card applications and share trading. Marcus Judge, general manager for e-commerce for the Commonwealth Bank of Australia says current user trends have seen customers moving away from transactional banking to take advantage of different services. "People are becoming more familiar with what you can do on the Internet and more confident with it," Judge said. "There is a small group of people who would rather deal with us online, but most use the service to gather information about their options and use it in conjunction with the branches." Like Kelly, Judge says customers aren't basing their bank selection on Web-based services; however, the success of the online service is largely based on reliability and usability factors. Other banks, such as Brisbane-based Suncorp Metway, and Perth-based BankWest, are using their online offerings to expand into other states without the overheads associated with an extensive branch network. Mark Solari, head of retail banking technology for Suncorp Metway, says the bank is keen to keep a consistent experience between all customer touch-points over the next 12 months, as it expands into other states through premises acquired back in the September 2001 take-over of GIO. "Success from an Internet perspective is about maintaining the scale of the customer bank and matching services to customer needs," Solari says. "We are seeing increasing participation by the over 50s, and going forward, customer segmentation will be based on needs, not demographics." With banks such as St George already integrating SMS services into its Internet banking service, and financial institutions such as Egoli, AMP, Westpac and the Commonwealth offering account aggregation services, "mobile offerings" and "online aggregation" services are promising to become 2003's industry buzz-words. However, with the technology backing such services yet to be proven, Solari, and others in the industry, prefer to tread more cautiously when it comes to emerging technologies. "Mobile messaging, and account aggregation sound seductive, but offering online banking services is about being able to meet with customer expectations, not technology for technology's sake," Solaris said.
AMPService: AMP Banking Technology: Browser-based, 128 bit encryption with digital certificates issued by Verisign. Supports both PC and Mac. Balances/transaction updates: Balances and transactions are updated immediately they are processed. Transfers between personal AMP Banking accounts are updated immediately. Transactions to external accounts or BPay, processed prior to 4pm on a business day, are updated immediately. Transactions to external accounts or BPay, processed after 4pm on a business day or on a non-business day are processed the following day. Average downtime for 2002: Service availability was well over 99% during 2002. Average transaction time: Depends on the transaction, but could be anywhere from a few seconds to a minute. Account integration:
Consumer Services:
Company Services: As per customer services Extras: Customers have free access to My Portfolio which provides balance details and investment reports. Customers also have free access to My AMP which allows them access to: My Watchlist, where the price of shares, retirement, superannuation and managed funds can be followed as well as special offers, available only through My AMP and economic reports created by AMP's leading economists. ANZService: ANZ Internet Banking Technology: ANZ Internet Banking is a browser-based service, which can run on either currently runs on an Edify platform with an Oracle database, offering password-protected Web site access. The service can be accessed using a range of either Mac or Windows platforms, and either Internet Explorer or Netscape Navigator, although older versions may not provide adequate security protection. Unsupported browser version may result in a Security Alert when logging on to Internet Banking indicating that your root certificate has expired, however this message can be avoided by the use of more recent versions of the software. Balances/transaction updates: Full transaction details are updated nightly; however, available balances are updated in 'real-time'. Average downtime for 2002: Internet Banking availability average for the last 12 months was 98.3 percent. Average transaction time: Offers a wide range of transactions, varying greatly in complexity. For core banking transactions, the majority are completed in less than 5 seconds. Account integration: service not provided.
Consumer services:
Company services: All consumer services plus: single debit multi-bill payment, single debit multi-transfers, single debit payroll payments for up to 15 employees, third party transfer limit $25 000, and tax payments. Extras: SecureMail to a customer help desk 24/7, E*Trade integration provides easy and immediate transfer of funds for trading online, via the ANZ/E*Trade Cash Management account, Internet Banking also allows customers to open a share trading account online.
Arab BankService: Arab Bank Australia Technology: Browser based offering, compatible with any version 5 browser or later on any platform. Service is secured through a firewall and offers 128-bit SSL encryption. Balances/transaction updates: All transactions and balances are reflected online in real time. Average downtime for 2002: Minimal-- ISP maintenance outages only. Average transaction time: Transaction is completed in less time than it takes browser software to finish rendering the page. Account integration: Not provided.
Consumer services:
Company services: Arab bank's services are focused on consumer services, although some services overlap. Extras: Loan and Investment calculators, Secure Mail direct to Internet Banking help desk and "Smart Alerts" (Proactive notification service that alerts you when limits that you set on your accounts have been reached).
Australian National Credit UnionService: Australian National Credit Union Internet Banking Technology: Internet solution is an Australian designed solution from Queensland firm "The System Works". Runs on clustered Windows 2000 Servers connecting to an IBM AS400 database Balances/transaction updates: Real-time online updates. Average downtime for 2002: Maintenance and upgrade schedule would have system outages at less than 24 hours per annum, performed in non-peak processing periods. Unscheduled outages accounted for 12 hours per annum. Average transaction time: Depends on the transaction although generally balances can be accessed quite quickly. Internal/external transfers require multiple input, depending on what has been stored. Processes and screens are simple to ensure efficient service. Account integration: Single view of all Australian National Credit Union accounts.
Consumer Services:
BankWestService: BankWest Online Banking Technology: Browser based 128-bit SSL security, fully Windows compatible and also compatible with other platforms like Macintosh with minor issues. Balances/transaction updates: Site data updated immediately via a real-time connection with branch, ATM & EFTPOS systems. Average downtime for 2002: Typically less than 12 hours per month, including maintenance and enhancements, we can do many changes progressively without disrupting customer service. Average transaction time: Varies with time of day, numbers of customers logged on and so forth, however, BankWest aims for no more than five seconds for any transaction and can keep it to less than one second. Account integration: Not provided Consumer services:
Company services: Internet banking service--Online Business Banking (OBB)--specifically designed for medium-sized to large business as well as small businesses with more complex needs. The service, launched in 2002, offers latest generation features for banking online, such as multiple levels of access and funds transfer authorisation from any Internet access point globally. It is real-time and operates 24x7. It has all the features of BOB with many areas being richer in functionality, for example, accounts can be grouped for different company offices and staff provided with access to just applicable groups. Extras: Web site offers comprehensive financial information and tools to customers so they can manage their affairs.
CitibankService: Citibank Online, Citibank Australia Technology: Citibank does not provide security specifications to external any parties for security reasons. This ensures minimal exposure and protection for customers. The Web site works best with a Pentium 133 Mhz or higher; 33.6 Kbps or higher modem; 32 megabytes of RAM; Microsoft Windows95 or NT version 4.0 or higher and a browser that supports 128-bit encryption and JavaScript. Balances/transaction updates: All online financial balances and transactions are live, so are updated in real time. Average downtime for 2002: Average time unavailable, Citibank has had very little down time over the last 12 months. Average transaction time: Average time to access an account summary and simple information is four seconds, average time for secure mail is 20 seconds. Account integration: Ability to view Citibank accounts such as Credit Cards, Personal loans, Revolving Mortgages, Cheque Accounts, Rewards account, Online Cash Management Account.
Consumer services:
Commonwealth BankService: NetBank, Commonwealth Bank of Australia Technology: Compatible with Windows and Macintosh system, browser-based, designed to run on Netscape or Explorer. Alternative operating systems may require the latest Java Virtual Machine available for your operating system. JavaScript and 128-bit encryption must be enabled. Balances/transaction updates: Balances of accounts are updated real-time, transactions are updated each Bank working day. Average downtime for 2002: This information is not publicly available. Average transaction time: This information is not publicly available. Account integration: NetBank provides an overview of demand deposit accounts, home loans, personal loans and credit cards. Consumer services:
Company services: As above. Extras: The Bank has other separate online services including Commsec (share trading and managed funds), Colonial First State (investments).
Community First Credit UnionService: Easy Street Financial Services Technology: Browser-based, SSL with digital certificates from Verisign, as well as 128-bit encryption. Web site is both PC and Mac compatible. In terms of optimum platform specifications, PC users are recommended to have a Windows 95 plus Web browser Internet Explorer 5.0 - 5.5 with 128-bit encryption. Windows 98, 2000, XP or NT plus Web browser Internet Explorer 5.0 or above with Service Pack 2 and 128-bit encryption. Apple Mac Users are recommended to have operating system 9.0 or above plus Web browser Internet Explorer 4.5 or above with 128-bit encryption or Netscape 4.7 or above with 128-bit encryption. Web browsers with encryption levels less than 128 bit may still function correctly at lower levels of encryption. Balances/transaction updates: Balances are updated in real time. Average downtime for 2002: Less than 2 percent. Average transaction time: 30 seconds. Account integration: Not provided. Consumer services:
The Community First Credit Union online services offers balance enquiries, funds transfer between accounts and externally, immediate and future dated, once-off and regular, comprehensive transaction displays and printouts, direct debit/credit displays, access code management, periodical payment management, integrated BPay, view interest credited in a financial year, loan redraw facility, export transaction information into accounting packages, secure mail, calculators - budgeting, compounding interest, borrowing power, loan repayments, split loan, offset and stamp duty. Company services: Easy Street Internet Banking is consumer based only at present. Extras: View and print statements online, online savings application and online loan application
HSBCService: HSBC Bank Australia Technology: HSBC Internet banking is a browser-based offering, covered with 128-bit SSL encryption, compatible with both PC and Mac. The Web site supports Internet Explorer 5.5 and 6.0 for PC and Internet Explorer 5.1.6 and 5.2.2 for Mac. Netscape 4.7x and above (but not version 6 or 7). The Web site also requires screen resolution 600 x 800 (640 x 480 resolution users should still be able to view all content, but vertical and horizontal scroll bars may need to be used). Balances/transaction updates: Transactions between HSBC Bank Australia accounts are processed immediately. To ensure an overnight payment, requests must be received by 4pm that day. Otherwise, the payment will be the next night, BPay requests prior to 6pm AEST are processed the same day (6pm is BPay cut off time). Average downtime for 2002: Less than 0.5 percent. Average transaction time: Depends on the type Internet connection, and the transaction being carried out, most transactions are completed between 30 and 60 seconds. Account integration: Total Wealth Summary Page: Allows customers to view their total financial picture, providing a consolidated view of all of accounts, investments, assets and liabilities. Additional liabilities and assets can be added by clicking 'edit' and entering the details. Customers can also view current exchange rates and see if they have new messages from HSBC, such as payment confirmations. HSBC also offers an account summary page: provides customers with an overview of HSBC accounts. An Account Details screen contains information about the account such as debit interest, credit interest and credit tax for the previous financial year. Consumer services:
Company services: Online business banking offers a full complement of currency trading, finance, business transactions, investment banking and managed funds. Extras: Insurance quotes, Online Savings account applications, download application forms for Personal Loans and Visa cards, investments and broking details if from MLHSBC.
INGService: ING Direct Technology: Browser-based, 128-bit encryption with digital certificates issued by Verisign. Web site is both Mac, and PC, compatible. Balances/transaction updates: Balances and transactions are updated in real time. Average downtime for 2002: Over the past 12 months we have had an average of 99.7 percent uptime. Average transaction time: Under 10 seconds, depending on the user's connection speed. During 2002, users of the ING Direct Web site spent an average of 2.30 minutes per visit. This is 50 seconds less than the online banking industry average. Account integration: ING Direct provides its clients with two product types, savings and managed investments. In addition to viewing each account in great detail, clients can view a consolidation of their total holdings. Consumer services:
Macquarie BankService: Macquarie Bank Technology: Browser-based with 128 bit SSL encryption, based on a Netscape Enterprise Server Web server. Macquarie opted for a custom built in-house security system, Web site designed to work on dial-up through to broadband connections. Balances/transaction updates: Account balance and transaction details are updated (refreshed) every 15 minutes. Average downtime for 2002: 0.43 percent. Average transaction time: Varies depending on transaction being performed (ie. trade, funds transfer, BPay, etc). Overall average is approx. 30 seconds. Account integration: myhome@macquarie provides an aggregated view of clients' investments with Macquarie Bank across cash, managed funds, super, ASX-traded holdings (broker sponsored), and mortgages. For cash accounts held, this aggregated view includes account number(s), last five transactions, balances, available funds and interest paid last financial year. Consumer services:
Company services: Macquarie Research is available to corporates covering equities, debt markets, metals & mining, futures, foreign exchange and economics & strategy. Advisers have access to a WRAP service, online trading, transactional access to clients' cash accounts, and Macquarie's technical library. Small businesses have access to desktop banking and DEFT payments. Extras: Live stock quotes, investment portfolio, market indices, Macquarie daily commentaries and Macquarie research.
National Australia BankService: National Web Channel, and National Australia Bank National Internet Banking. Technology: Browser based 128-bit encryption. Web site runs the world's leading content management application--Vignette--and is managing a distributed content management model that enables more efficient content management. National.com.au leads the financial community in page download speed. Balances/transaction updates: Balances are updated in real time. Average downtime for 2002: National.com.au has been available 100 percent of the time over the past three months and 99.97 percent of the time over the past nine months. Average availability over the past 12 months has been 99.43 percent. Average transaction time: Depends on the connection to the Internet. Based on a 56k modem approx 15 to 20 seconds per transaction on a broadband connection such as ADSL approx 4 to 5 seconds per transaction (eg. account details, transaction history). Account integration: The National is currently exploring options around aggregating account information. You can view all linked (National) account balances from the same screen. No access to accounts from other financial institutions. Integrated access to National Online Trading will be provided by April, 2003. Consumer services:
The Web site also provides pre-sale information to customers such as product and service information, interest rates, financial exchange rates, unit prices, access to the National via e-mail, secure access for shareholders and the media, live and archived Web casts, annual report and National group information, online applications, calculators and tools, specialist sections for segments of the Australian customer base--Personal, Business, Agri-business, Community, About Us, Online Services. Company services: As well as having access to the appropriate customer services, national.com.au provides specialist business product and service information and tools such as online business applications, lease quoter, business scenario tester, business calculators and other services. Extras: national.com.au provides online applications for home loans, personal loans, credit cards, term deposits, business loans, agri-business loans. National Online Trading also offers National Bank Secure Internet Payment Service (NSIPS) for credit card transactions, access to nabmarkets.com.au, wholesale information, payments information, live archived Web casts and shareholder information--secure share registry information and other, press releases, annual reports online and information pertaining to the bank's annual general meetings. However, most of these services are available at national.com.au but not through National Internet Banking.
St George BankService: St George Bank Technology: Browser-based application. Protection offering 128-bit encryption and digital security certificates issued by VeriSign. Supported Browsers include Microsoft Internet Explorer versions 5.x and above, and Netscape version 4.74 to Netscape 6.2. Accessible through Firewall and Proxy Servers. Web site is both Mac and PC (Windows) compatible. Full details of supported browsers and operating systems are available on the Web site. Balances/transaction updates: Balances are updated immediately (real time). Transaction details are generally viewable immediately, however outside core hours there can be some delay in making these details available to view. Average downtime for 2002: Internet Banking availability has averaged 97.95 percent over the last 12 months. This excludes scheduled downtime, which accounts for a further 0.17 percent. Average transaction time: The average time taken between logging in and logging out is 8.05 minutes. During this time, the average customer performs 3.8 transactions. Account integration: A number of different views are available to the customer, including ones which give summary information for all customer accounts on one screen. Consumer services:
Company services:
Extras: Personal loans applications, home and business loan applications, credit card applications, calculators for foreign exchange, home loans, personal loans, investments, insurance and margin lending, quotation for home and contents, car, travel, loan, and mortgage protection, information on securities, structured investment, venture capital and capital markets, on-line trading via quicktrade.
Westpac Banking CorporationService: Westpac Banking Corporation Technology: The customer's browser must support 128-bit encryption, and the recommended operating system is Windows from Win 95 forward, and Macintosh systems with Internet Explorer. Balances/transaction updates: Transactions and balances are updated in real time. Average downtime for 2002: Westpac schedules maintenance windows at times that will have minimal customer impact. Outside of these scheduled maintenance windows, Internet Banking operates 24x7 and Westpac aims to keep Internet Banking available during these times. Average transaction time: Unable to be specific as it depends on the customers browser, modem speed and other factors. Account integration: Other Accounts services allows aggregation of accounts from 110 online account providers (eg. financial institutions, air points etc), balances can be updated on any sign-in to Other Accounts. Consumer services:
Company services: Tax payments, overseas payments, view and modification of 3rd party payments, access to other entity accounts, tailor level of access-persons, cash management account, equity access, business finance request, agri-business facilities, start-up business facilities, business seminars, financial planner and advisor services and EZY BAS. Extras: Foreign exchange and stock quote facilities, car Buyers Guide, personal wealth management seminars, home finance managers--arrange meeting, check and redeem credit card reward points.
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