Banking Review

What’s next for online banking?

The Commonwealth Bank is preparing to launch an enhanced version of Internet banking that allows users to view their insurance, CommSec and Colonial First State products in one place.

The enhanced site will also include pre-completed insurance and term deposit applications, and a secure messaging area for notifications about statements and the status of applications.

The new features will be welcomed by CBA customers, but they are a drop in the ocean compared to the current suite of innovative online finance services that are emerging elsewhere.

CBA faces an enormous challenge to innovate beyond this type of functionality, since it must build its platform to appeal to millions of users. Drastic changes could significantly impact on the usability of the platform, which for the most part is used by customers for simple balance checking and transfers.

This would be fine if industry activity was determined by the pace of the slowest horse in the race, but in reality it’s non-banks that are leading the way with online personal finance tools.

Last week, Quicken developer Intuit launched a new version of Quicken Online, a free tool that allows users to track their spending and anticipate the danger of becoming overdrawn or exceeding their credit limit.

Quicken is taking on Wesabe (which claims 100,000 users worldwide) and Mint (which claims 600,000 users), and the growing number of competitors seeking to deliver cross-bank visibility and social finance tools to consumers.

ANZ has attempted to keep up with the launch of its Yodlee-powered MoneyManager tool, but no Australian bank has used Internet banking to deliver real insight on customer spending, nor a customer experience that goes beyond basic transactions and applications.

If bankers are to really engage customers online, they must consider expanding the offering delivered via their secure sites.

There are plenty of barriers and naysayers standing in the way. Banker Rob Findlay at The Bank Channel lists many of them. He also delivers a response to every one. As Findlay says, it’s not about innovation for innovation’s sake, but transporting customers to a better place for managing their money.

This will be the last blog entry of 2008, and so I’d like to take the opportunity to wish you and your family a safe and happy Christmas.

We’ll be back early in 2009. Thanks for your support and feedback during the year :>)