Online lenders E-Trade Bank and Schwab Bank are giving the biggest U.S. financial institutions a run for their money, according to a new study of web services at 17 banks.
Citigroup (NYSE:C) and Bank of America (BAC) were the most highly decorated banks in a Corporate Insight report on eight categories of online features and services. Citi won awards in six of the eight categories, while Bank of America won four. But E-Trade and Schwab were close behind, racking up three awards apiece.
"Both [E-Trade and Schwab] have branches, but their main goal is to have everything online," says Marina Stein, a senior analyst at Corporate Insight, a New York research and consulting firm. "So the categories that they did well in are ones that are useful for online banks."
Banks were judged on the sophistication of web tools that help customers match their needs with account offerings, the smoothness of online-application processes, the prevalence of self-service features and other areas, according to the 2013 Bank Monitor Awards Report. A "gold," "silver" and "bronze" were prize were given in each category.
E-Trade and Schwab, which are banking subsidiaries of larger financial services companies, tied for the silver award for their online-help resources. Their live chat functions won special praise. Schwab also took a silver for its account balances summary page, which offers extensive information about interest earnings and pending transactions. E-Trade was awarded its second silver in the account-history category, winning praise for a function that allows clients to conduct targeted searches of 24 months of account history.
But major banks with strong brick-and-mortar presences were described as working hard to ensure that their online offerings are just as good or better as those of their online competitors.
"A lot of full-service banks that have branches are implementing new features on private sites as well," Stein says. "They want to make sure clients don't have to go to branches or call customer service because they have live chat and self-service options that they can use on their own."
Citi's website has distinguished itself with "neat, innovative tools," according to Stein. The bank's self-service options, account-summary information and private site help resources each merited a gold award.
Citi's user-friendly approach to online banking is evident in its website's pop-up "lightboxes," according to Stein. The lightboxes "highlight a section and gray out the background" when customers search for information from their account homepage, allowing for better readability. Stein also praised Citi for its approach to requests for old bank statements that are no longer online: it uploads them to customers' account pages for free, rather than charging a fee for hard copies.
Bank of America's online features also helped the lender stand out in the Corporate Insight survey. The bank won a gold for its account history tool, which lets clients dig up more information about transactions by clicking on expandable entries. It also received a gold for its alert center, which lets customers flag certain types of transactions and view a list of alerts from the previous 60 days. Alerts are sent to a primary email address and may be requested for an additional email or phone number.
As banks work to accommodate the growing number of customers who do their banking remotely, they are pouring extra effort into features for mobile devices, Stein says. "Lots of banks are implementing new apps for iPhones and iPads," she says.
U.S. Bancorp's (USB) new photo bill pay app, which lets customers upload pictures of bill stubs to their accounts in order to pay them online, stands out as a useful mobile feature, according to Stein. Also noteworthy is the bank's balance-transfer app, which lets customers transfer credit card payments to U.S. Bank by taking a photo of the bill payment stub from their other credit card statement.
While these high-tech options appeal to many customers, Stein says that simplicity and intuitive design remain the key ingredients for successful online banking.
"At the end of the day, it's about giving clients the best usability," Stein says. "Banks should be making sure that their tools and services are fluid and that users are easily able to get from point A to point B in order to find what they're looking for."