Watchfire GomezPro: Banks Strengthen Security While Addressing Usability

The Q3 2005 edition of the Banker Scorecard, which evaluates the online delivery of banking services to consumers, examined 29 banks.

The recently released Q3 2005 Banker Scorecard shows Wells Fargo repeating as the winner by Overall score, having made significant enhancements to stay ahead. Citibank, boasting improvements to its site's ease of use, takes second place, with Bank of America rounding out the top three by Overall score. The Q3 2005 Scorecard also shows that banks across the country are improving billpay offerings and strengthening customer-facing security features while addressing usability considerations.

The Q3 2005 edition of the Banker Scorecard, which evaluates the online delivery of banking services to consumers, examined 29 banks. These banks included 16 of the 20 largest banks by retail deposits that qualified based on meeting minimum criteria. Using the enhanced Watchfire GómezPro Scorecard methodology, the Banker Scorecard assesses sites using objective criteria across four categories: Functionality, Ease of Use, Privacy & Security and Quality & Availability. The Banker Scorecard also focuses on five Tasks that reflect the most important activities in consumer online banking: Open Account, Check Accounts, Transact, Get Service and Learn & Plan.

The winners:

• In addition to taking first for Overall, Wells Fargo also wins the Quality & Availability category with an unprecedented perfect score owing to the availability of a billpay guarantee and the availability of customer service throughout the site -- including accommodations for disabled users. Wells Fargo also wins the Open Accounts, Get Service and Learn & Plan tasks, and has streamlined the integration of its banking and brokerage services since the last Scorecard.

• Citibank ties with E*Trade for first place in the Functionality category. While the two banks have markedly different backgrounds, each has invested heavily in Web sites that both attract and serve online checking customers. Citibank has reported that a significant and growing proportion of its online checking applicants do not live near a physical Citibank branch. Both firms now offer streamlined checking applications, no-fee bill payment, online statement delivery, and the ability for customers to transfer money among their own bank accounts and accounts at other banks and brokerages.

• Citibank also ranks first in the Privacy & Security category and continues to set the standard with customer education for online fraud and advanced authentication, both in an effort to maintain customer trust by taking visible measures to improve the security of their online banking Web site.

• E*Trade also wins the Check Accounts Task. E*Trade achieves this by providing checking customers with robust content that is easy to access, while seamlessly integrating online banking with online brokerage and other account management services.

• Washington Mutual, offering a well-implemented tab-based navigational system and clear, up-front instructions for online Tasks, wins the Ease of Use Category. Across the industry, banks have focused attention on Ease of Use, striving to increase customer usage of the services they already offer.

With the Q3 2005 edition, three banks joined the Scorecard based on meeting the minimum criteria. They are BB&T, Fifth Third Bank and Sovereign Bank. Fifth Third, tying for 17th place with another Ohio-based bank, Key Bank, placed the highest for Overall score among the three new banks. Having heavily revamped its offering over the last year, Fifth Third received top-ten marks for both the Ease of Use Category and the Transact Task.

BB&T had, at one point, been the largest U.S. retail bank not allowing new-to-bank consumers to apply online for a checking account. While support for new-to-bank checking applications is more central to the strategy of some banks than others, new-to-bank applications for checking accounts have become more and more common among larger banks to the point of being pervasive, even as Patriot Act considerations and fraud concerns have made the online application process more fraught.

Other trends were evident around billpay and the Scorecard Ease of Use and Privacy & Security categories. Banks are driving customers to billpay in an effort to hook customers on online banking. Banks also face the challenge of spurring adoption of online banking in general by addressing security concerns and usability, two issues that can come into conflict as banks struggle to introduce confidence building and antifraud measures while making their sites less cumbersome to use. Here we look at these three trends:

In bill pay, there has only been slight movement on bill presentment, though at least four Scorecard banks have plans to offer presentment in the near future. The bigger movement is towards giving customers shorter time frames for settlement of electronically processed payments, such as payments to a credit card issuer or utility. Historically, banks have told customers to allow five business days or even more for these payments to reach the biller. But with this Scorecard, another four banks have shortened the window for electronic payments to two days. Some banks are even offering same-day credit for payments to certain billers, a trend that will position banks to compete much more effectively with billers' own sites for customer adoption.

Ease of Use has been a focal point of online efforts, as banks seek to unlock the value of online features and services by encouraging customer adoption. While factoring usability considerations into site relaunches and introducing updated features is not a new concept, increasingly banks are implementing usability improvements without waiting for major releases. For instance, both Citibank and Wells Fargo have made usability enhancements to billpay simply by reorganizing information and links.

Banks continue to respond to the real and perceived security threats that continue to hinder adoption. For starters, banks are focusing additional resources on online user authentication. Three more Scorecard banks now have implemented additional user authentication beyond the standard user name and password, raising the total number of Scorecard banks supporting advanced authentication to seven. At least three other banks are planning to strengthen authentication within the next year.

Banks also are being careful to control what information they show after a customer logs in, with five more banks now masking account numbers on the account summary page. Implementing additional user authentication and masking account numbers can present usability issues. Indeed, banks are struggling with online security, as many of the remaining opportunities to increase security pose significant usability issues.

The high level of activity measured in both the Ease of Use and Privacy & Security categories points to an emerging dynamic in banking that now permeates conversations with online channel managers: the balance between security and usability. Banks are routinely struggling with questions about whether to include links in e-mail alerts and require a second level of access to monthly statements. For instance, Wells Fargo announced earlier this month the rollout of a range of account-based alerts. One key feature was no links from these e-mails directing users back to Wells Fargo. In adopting this practice, Wells Fargo joins an increasing list of banks keeping links out of e-mails to teach customers not to click on links found in e-mails, even though this approach potentially runs counter to usability principles of a seamless call to action.

At this point, there is little consensus as to how to resolve the tension between security and usability. Given security threats are a moving target, an industry consensus may never have an opportunity to stabilize. But some banks already have hit a wall: There is little they could add to online banking to get more customers to try it. Instead, the gating factors to online banking adoption are often security and usability. So we expect to see more of the recent trend of banks rolling out enhancements to improve usability and security without waiting for major site releases to do so. But also we will see more of banks trying to split the difference between these two goals.