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Why Canada wins in online banking. (Cover Story).

Banks located in our neighbor to the north have successfully built up their Internet customer base by winning the confidence and trust of consumers. American financial institutions can learn from the Canadian marketing experience.

It took the Canadians 50 years to win a gold medal in ice hockey, defeating the United States at the 2002 Winter Olympic Games. But it took our northern neighbors just a few years to outpace us in Internet usage. In fact, over half of Canadians said that if they were stuck on a deserted island for a month, they would prefer a computer with Internet access to a TV or phone, according to a recent survey by Ipsos-Reid. Maybe that's because they're so accustomed to shopping and banking online. The same company conducted a 2001 survey that revealed 61 percent of active Internet users in Canada have conducted financial transactions online, versus 29 percent of active Internet users in the United States.

Canadian e-commerce comfort stems from the fact that Canadian banks have been aggressive in promoting online banking as a viable and secure option, according to statements by Marcie Sayiner, Ipsos-Reid senior manager of research. So how did the northern banks get customers to place so much trust in their online offerings? Timing, says FutureBrand's Worldwide Managing Director, James Cerruti. FutureBrand's work with MIT and independent studies on e-commerce indicated that the online environment is not the place for an established institution to start to build trust. That's a concept the Canadians simply "got" sooner than the Americans.

"They recognized that the success online was not about creating a totally separate business model, but as a way to extend an already existing, trusted brand into a new channel," explains Cerruti, a financial and professional services branding expert who has worked with what he calls "the big four," Royal Bank of Canada (RBC) Financial Group, Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC) and Toronto Dominion.

Cultural diversity

The sheer dominance of the handful of major banks in Canada has actually created a more skeptical banking public, says Cerruti. So on the demand side of the equation, behaviors and attitudes of Canadian Internet users are not too different from American users. There is another factor affecting the speed of Canadian online banking success that comes from the supply side--a difference in corporate culture. In Canada there is a tendency toward cooperation. In American industry, the sharing of ideas and information is antithetical to the typical corporate maxim of "constructive competition." In the case of online banking, that U.S. mind-set has backfired.

"What has transpired in the United States has been an internal, ongoing fight over resources and clients," claims Cerruti. "That's impacted the ability to implement strategy."

Geography lessons

You don't have to be hit with a hockey stick to realize that geography has also played a large part in Internet acceptance in the land of maple trees and beavers. Judy White, segment marketing manager for Lincoln, Mass-based Unica Corp., points to a few land-related factors that have cleared the ice for online banking in Canada.

Geography and population: Canada has one-tenth of the population of the United States and a lot of physical ground to cover. Banks are forced to encourage consumers to use online banking because branch banking in the wilderness is not practical.

"In the United States, there are banks on every corner, but in many areas in Canada you have to drive a long distance," explains White, whose company has worked with Canadian customers such as Bank of Montreal and RBC Royal Bank. "The push for online banking has become an absolute necessity in bank corporate strategy."

Competitive necessity: With only a few major players, each leading Canadian bank is under pressure to offer matching services.

"The largest banks in Canada have a very large percent of the population as their consumer base," says White. "So they are able to invest enormous amounts of money into online banking. Whatever one is doing, they all have to do."

Technology and customer knowledge: Canadians invested early in technology to keep up the competitive edge. They also assign customer analytics a big role in the game of attracting online customers.

"Because of the competition, they know who their customers are, whereas in the United States, it's much more fragmented," explains White. "They have the baseline for the infrastructure and they've been conditioning clients to go to different channels."

Marketing trust online

Understanding your customer is the first step for a bank in building its reputation for trustworthiness online, agrees Christopher Kenton, president of Cymbic Inc., a marketing and brand-building firm based in San Rafael, Calif.

"Trust is built through a series of interactions in which a customer has a need that is met with an immediate and appropriate response," claims Kenton. "A successful series of such interactions builds trust, and can be accomplished with a simple progression of marketing tools."

Kenton's steps are as follows:

* Understand the customer. Strategic targeting can help a bank to single out and serve the best prospects.

* Educate the target customer Direct marketing and advertising can educate the customer on the bank's offering so they have specific expectations and specific questions when they visit the site.

* Provide a positive online experience. Anticipate consumer behavior so that with every click, the customer experiences helpful information, ease-of-use, and instant accountability if they need more support.

Kenton cites the website of Lincoln Financial Group, Philadelphia, as a good example of the application of these principles. The site anticipates the needs of users, he says. "I feel like I'm not only navigating, I'm learning what issues I should be concerned about for my station in life."

"The website should literally meet you at the door and say, 'I know what you need, here's where to find it,' "says Kenton. "Screening out excess noise you see on the other crowded sites is a phenomenal way to build trust."

Building trust online

Anticipating customer behavior and meeting customer expectations isn't that difficult, according to Web architects. With a user-centric approach, any business can design solutions that instill trust, says Robert Tannen, a Ph.D. with Electronic Ink. Banking institutions can follow these steps to evaluate and improve the trustworthiness of their sites:

1. Be usable or be left behind. If customers can't find the information they need and complete tasks quickly, they will leave. Make sure that your customers' most common tasks, such as accessing account balances and transaction history, are no more than a single click from the home page. Also make sure that your customers' experience is consistent across the site. For example, are errors on a login screen handled the same way as they are on a registrations screen? Surprisingly often, they are not.

2. Get personal, but explain why. It is critical to clearly and openly define how customers' personal information is handled. Customers will reveal personal information if there is a clear benefit in doing so. Make sure they know how their data may be used, who will have access and why. Provide "opt-in" choices where users can decide to receive solicitations from your bank or affiliated vendors. More subtle "optout" selections can be deceiving, as users will tend to ignore controls that aren't essential.

3. Clearly describe benefits. Many banking sites lack useful upfront descriptions detailing the benefits of the services they offer. For example, a "one-stop" comparison matrix of varying levels of banking services or credit card offerings illustrating the differences in free structures will help potential customers choose what is best for them. Customers can then quickly decide if your site is offering value.

4. Keep content current. Outdated and inconsistent content will break any trust you may have built and will frustrate your customers. Avoid any discrepancies between the rates and fees displayed on your website and those that are offered in your branch locations.

5. Put users in control of communication. Your customers should have a place to go with questions and concerns. Complete contact information including telephone, e-mail and addresses should be available in a prominent and easily accessible way.

Retail experience

Karen Donoghue, author of "Built for Use: Driving Profitability Through the User Experience" (McGraw-Hill, February 2002) underscores that trust is the lynchpin in the online world. She looks to as an example. For the book retailer, trust is making sure that the first time you visit the site until you get the book in your hand, it's a smooth transaction.

"Financial institutions are beginning to learn from the great retail experience and are being pressured by that," she explains. "People expect their online visits to be like say, Why did I have such a great experience buying books online, but a lousy experience banking online?"'

When creating a bank website, you must first understand what in the experience builds the most trust for your end user. There are simple rules to keep in mind, she says, such as:

* Make privacy statements clear and easy to read.

* Answer e-mail within 24 hours.

* Follow through by doing what you say you're going to do.

* Have access to humans--too often you can't find the live person at the end of the click.

* Respect the users time by delivering information in a manner that is fast, accurate and appropriate.

* Outperform yourself in a bad situation by being proactive with interrupted transactions, either with follow-up e-mail or error pages with clear instructions.

* Focus on integration after mergers and acquisitions.

"A lack of integration degrades the brand," she claims. "It's a big painful mess in banking right now, but if you don't do it, it becomes very apparent to the end user that you don't have a unified enterprisewide structure."

Trust is the most important brand attribute a bank can have, and it's created through relationships. Based on a history of positive encounters, most customers trust that their bank is going to do the right thing. Deposits will be credited, savings will accrue interest and checks will clear in a timely manner. So it's important to carry through that brand experience, and the brand communication from the physical to the online world.

Wired and wary

The major U.S. banks have taken their cue from Canadian banks, with many now building their business online using their already trusted corporate brand. Unfortunately, as long as it takes to build a trusted brand, it can be lost in just a few bad online experiences.

Remember the TV commercial where a young woman gives her phone number to a young man in a bar? He then starts a bidding war with the bartender and another patron over the slip of paper with her number on it while she looks on, shocked. Unrealistic? Not in today's online world, where the lack of clear boundaries can be disorienting and even dangerous to the uninitiated.

Now consider the online bank customer. In the branch, they know who's handling their account. Online, the itinerary of their personal information is ambiguous.

"Consumers really do care about what companies are doing with their data," says Fran Maier, executive director for the San Jose, Califomia-based TRUSTe. "Consistently, privacy wrapped up with identity theft keeps people from banking online."

Real or perceived, these points are featured among the top three concerns expressed by those polled in a Harris Interactive survey of consumer privacy attitudes and behaviors. According to the survey released in February 2002, consumers fear that:

* Companies will provide their information to other companies without permission (75 percent).

* Transactions may not be secure (70 percent).

* Hackers could steal their personal data (69 percent).

The survey also notes that 91 percent of consumers said they would do more business with a firm whose privacy practices have been verified by a third party. Third party certification is what TRUSTe is all about, and what Maier has been urging companies to do--along with shorter, easy-to-read privacy policies and a company commitment not to sell personal information without user consent. So far, though, she says the banks aren't listening.

"I think financial institutions look at us as another regulating board agency and we're not," Maier claims. "TRUSTe and other organizations provide a guidepost for consumers to feel more comfortable, and it helps a financial institution communicate their commitment to privacy."

Maier admits there was a time when the certification people saw themselves as regulators, but that's changing.

"We're trying to make that certification process easier by using more technology," she explains. "That doesn't mean it's still not a rigorous process, but they are customers and they need to be treated as such with timely advice, and turn around of the certification process."

A marriage of convenience

BankAtlantic executives almost gave up on their BBBOnline certification. After six months and a lot of follow-up questions, they finally got the seal that's now displayed on the homepage of

"They audit the site and it's pretty stringent. We felt like we were being audited by our regulators," says Jarett Levan, president of, a nine-year-old, $4.8 billion, soon-to-be 80-branch banking institution based in Fort Lauderdale, Fla. "But we passed muster and got the seal."

That seal is one small part of the bank's corporate wide initiative to create user trust and to fully integrate their online components with traditional banking. The first step was to establish a goal to have 100 percent of the employees using online banking and bill payment.

"Employees are no different than customers: If they haven't used the service before they're a little nervous," he says. "So we instruct them on how the process works because we know if our employees are using it, they'll be comfortable selling it."

To emphasize the importance of the online offerings, last year the bank created a concept called "A Marriage of Bricks and Clicks." They staged a wedding for 400 employees, with one "spouse" dressed as a mouse and one as a brick.

"We went to every branch and held a 30-minute reception," Levan explains. "We told them, 'this is who we are, this is why the Internet is important to BankAtlantic customers, this is how you sell it, and these are our goals.' We told them it's truly a marriage of convenience."

The bank continues to reinforce the commitment to online banking with:

* Online literacy training--required for every branch employees. Lessons include how to navigate through screens, how to enroll, pay bills and use the financial aggregation product.

* Incentive programs--like the employee bill payment contest. Each month employees who've used bill pay are entered in a prize drawing.

* Webby training--Webby stands for Web Experts for the branch. One person per branch is identified as the expert and given additional training classes along with other Webbies. They take that knowledge back to the branch and train fellow associates.

Anticipating a merger with Community Savings Bank, BankAtlantic added new features to increase convenience for new and existing customers. The call centers switched to 24/7 to answer calls and e-mails, and seven-day branch banking was added in April 2002.

"Helping our existing customers and growing online customer base realize the benefits and ease of online banking with is a top priority for us," says Levan.


Please use the postage-free Reader Opinion Card provided in this issue or leave a message at (202) 663-5075. You can also send comments by e-mail to


Superior Online Security Enhances Customer Trust.

Surveys show that fear about security is the biggest reason why more people don't conduct financial transactions on the Internet. Many web surfers are afraid that their credit card or bank account numbers will fall into the hands of online criminals.

And it's not an unjustified concern.

CloudNine Communications, a British Internet Service Provider, was forced to permanently shut down its website last year after a computer hacker was infected it with a virus. And in the year 2000, another hacker stole the names and numbers on 485,000 credit cards from an ecommerce site. Computers hackers are sitting out there, waiting to prey on the vulnerable.

Make sure that your bank's website is secure. And make sure your customers know that their data is protected. With the right marketing effort, you can turn the issue of security to your bank's advantage.

Here are lour steps.

1. Hire a good encryption service. Encryption services offer different levels of security for online financial transactions. But, as a bank, you will want the highest level available. This will ensure that all transactions will be made by the true account-owner.

When setting up the security system, though, make sure the authentication process is relatively simple. Your customers will not use the site if the encryption adds considerable time to the transaction process.

2. Get the seal of approval Business advisory groups such as Ernst & Young offer "Cyber Process Certifications." The web equivalent of the "Good Housekeeping" seal of approval, the certification will tell your customers that an independent organization vouches for your site's security.

3. Wear it proudly. Prominently display your security seal on the home page of your site. Plus, provide a short description of the site's security features and an explanation of why your bank values their data. For an example, check out The online bank's home page features a security seal from Ernst Young and a link to a page where Nexity explains why "the security of your financial information is very important to Nexity." This instantly tells customers that the bank puts security first.

Another tip: if your encryption service is used by a well-known e-commerce site, use that as a tagline on the home page. For instance: "Our site is protected by the same people who protect e*trade!"

4. Promote your site's security--everywhere. It's important to promote your security features at the site, but also include information about online security in all marketing materials. Make sure your customers can learn about the site's safety at every point.

--Phillip Swann

Janet Bigham Bernstel is a freelance writer based in Jupiter, Fla.
COPYRIGHT 2002 Bank Marketing Assn.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002 Gale, Cengage Learning. All rights reserved.

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Comment:Why Canada wins in online banking. (Cover Story).(Statistical Data Included)
Author:Bernstel, Janet Bigham
Publication:ABA Bank Marketing
Article Type:Statistical Data Included
Geographic Code:1CANA
Date:May 1, 2002
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