STAR RATINGS REPORT. Online Banking

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1 2014 STAR RATINGS REPORT Online Banking

2 June 2014 ONLINE BANKING IN THIS REPORT We analysed the online banking services from 16 banks and 24 customer-owned institutions. What is online banking? It s not a product, per se, rather a service that institutions can offer customers to make their lives easier and in the case of online-only banking, sometimes reduce costs. Here at CANSTAR, we award the service that offers most for customers, assessing the online and mobile banking facilities, as well as the quality of the website and standarad of applications available. As more and more of our daily actions take place on the worldwide web, it s not exactly surprising that online banking continues to thrive as an alternative method of saving, transacting and investing. Statistics gathered by the Australian Communications and Media Authority (ACMA) show that in June 2013, the number of Australians going online more than once a day rose to million 72% more than five years previously. Could this be the end of plastic? Not only are Aussies embracing the online revolution generally, more and more of us are doing it via our mobiles. The ACMA Communications Report reveals that in May 2013, the number of us using our phones to access the internet rose 33% year on year to 7.5 million people. And this ease of access is leading to plenty of us conducting our banking online. The same report showed million people used online banking (including bill paying) in the six months to May 2013, while ABS figures show that over-25s tend to use the internet for banking and bill-paying more than any other activity. Canstar Blue research conducted this year found that of the 2,425 respondents, only 7% did not have internet banking. Of the remaining 93%, almost all used internet banking at least weekly, with 57% using it at least 2-3 times a week. By contrast, only 10% of the survey respondents visited a bank branch once a week or more, with 54% not visiting a branch more than once every six months. Innovation in this sector of the financial industry seems to be constantly evolving. Here are some of things you can do with internet banking now that you couldn t do a year ago The mobile wallet customers can use their mobile phone as an eftpos payment option instead of a debit or credit card, thanks to near-field communication technology (NFC). Technology can be embedded into certain models of phone or stuck on as a patch, and the phone is then scanned at the cashier s desk, lifting funds straight from the customer s linked account. Cardless withdrawals in another step forwards in convenience, bank customers can now ask for a numbered code to be sent to their phones which can be used at the ATM instead of inserting your plastic account card. Not only does this negate the need for a card, it also means you can send a trusted friend or family member to collect cash in your absence. QR codes (these things) can be generated through a phone app and used to transfer funds, say, between friends. 1

3 What does the future hold? What is being offered right now? In the here and now, what exactly are online bank services offering to customers? CANSTAR researchers investigated what proportion of providers offered such facilities as the ability to apply online for wealth insurance, home loans and credit cards, and also the ability to hold web chats with a staff member or the facility to pay through mobile phones all of which can add value to an account through convenience. As the graphs below shows, some extras are offered by more accounts than others, with the ability to apply online for wealth insurance not offered very often, but 77% offering the ability to apply for new products online. PRODUCT APPLICATIONS THROUGH INTERNET BANKING Ability to apply online for BIOMETRICS Wealth WEALTH INSURANCE insurance 14% 86% New NEW PRODUCTS products 23% 77% HOME Home LOANS loans 45% 55% YES NO The future, it seems, is fleshy. With security constantly at the top of online banking s priority list, it turns out eye scans and fingerprint recognition aren t solely the domain of James Bond. So far, six countries across the globe are already using biometric technology as a verification tool for banking customers. Other options for authorisation in the future are methods such as voice recognition (particularly useful for phone banking) and vein scanning, a process by which a machine scans your palm to analyse the mapping pattern of your veins, which, like your fingerprint, is unique to you. Credit CREDIT CARDS cards Additionally, it s good to see a majority of deposit accounts offering a complete online verification process, though online help chat facilities and the ability to pay through your mobile are still not offered with most accounts. Yes No 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: CANSTAR database Complete online ID verification Deposits 0% 10% 20% 30% 40% 50% 60% Website online chat 61% Complete online ID verification Deposits Website online chat 44% 56% As with all technological advances, however, biometrics is not without its flaws or critics. Yes 30% Facebook security engineer Gregg Stefancik recently told The Australian newspaper that he hates biometrics as a verification procedure, citing the recent ebay hacking issue and pointing out that, where in that case customers were able to change their passwords, with iris scanning and fingerpint recognition, once the data has been compromised (and it is apparently possible), customers are stuck you can t change your eyes! No 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% Pay to mobile Pay to mobile Yes 26% No 74% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: CANSTAR database 2

4 Mobile app examples who offers what? Commonwealth Bank Combining the original app with the old Kaching facility, the latest CommBank app offers the brilliant Tap & Pay facility (enabling cardless MasterCard PayPass purchases) along with: cardless cash; the ability to lock your credit card, block ATM cash advances or limit transactions on it; and the ability to check your balance with a single swipe. St George The new St George Mobile Banking app offers fast, simple access to its range of features, which include: bill-paying facilities (including BPAY); a handy summary of interest payments, useful at tax time; the quickview MoneyMeter, which eliminates the need to log in just to see balances, etc; a Budget Planner; closest branch locator; and a handy currency converter. Bankwest With its colourful and easy-touse interface, the Bankwest app offers customers the ability to check their balances quickly and locate the nearest ATM as well as the best way to get in touch. Bankwest also plans to open up more features through its app in the very near future. When it comes to great value Having crunched all the numbers and assessed just what each institution in the CANSTAR database is offering in online banking facilities, we are pleased to announce the award winners in two categories: Best Online Banking Australia and Best Online Banking from a customer-owned insitution. Taking the coveted award for Best Online Banking Australia for the fifith year in a row is Commonwealth Bank. With such excellent features as the Netbank tool My Spend, which enables customers to track their spending habits by categorising expenditure into such groups as groceries, fuel, rent and others, as well as the long list of possibilities for mobile payments, it s clear that Commonwealth offers customers oustanding value. Not least of Commonwealth Bank s standout features is the introduction of cardless ATM withdrawals and cardless payments. The latter, through Tap & Pay, includes the option of embedding the required NFC technology within customers own phones (Samsung Galaxy S4 models only) and paying at the point of sale merely involves waving the phone before the appropriate scanner. The merging of Netbank and the Kaching app has also created a highly intuitive mobile application device that succeeds in making customers lives much easier. Additional impressive elements of Commonwealth s online banking facilities include comprehensive transaction history searching tools and application tracking. This year s winner of the Customerowned Best Online Banking award is Bankmecu. For the category of customer-owned we have included building societies, mutual banks and credit unions. Having undergone a huge revamp in December 2013, this first win for Bankmecu is a validation of the changes made within the insitution. Aside from traditional elements such as the ability to perform essential tasks (i.e. internal, external and international as well as bill paying), a bonus feature is the simple online loan application system, which comes pre-populated with the individual customer s information customer-owned a great, time-saving initiative. The introduction of online international transfers up to $10,000 is another big tick for the bank. Also clocking up the points were the following attributes of the Bankmecu online banking facilities: The mobile banking app, which enables members to undertake the three most common transactions (check their balance, pay bills and make transfers), access calculator tools and locate the nearest branch or ATM. The Central blog on the website, which keeps members up to date with events, news, tips and online banking updates. For people who prefer simple log-ins but don t favour four-digit codes, there is the chance to set up a pattern of your choice to access the mobile banking feature. There is the option of secure SMS or token VIP secondary authentication, or alternatively members can use their mobile phones as a physical token (which also saves them $5). 3

5 METHODOLOGY ONLINE BANKING AWARD METHODOLOGY What is the CANSTAR Online Banking Award? CANSTAR s Online Banking Award uses a sophisticated rating methodology unique to CANSTAR that compares the features of online banking platforms in Australia. The award is won by institutions that provide the best combination of services across the secured and unsecured side of online banking. The award aims to give recognition to those that offer quality online services and developments in light of the ever growing availability of technologies to further enhance the customer experience of online banking. How is the award calculated? CANSTAR has collected over 300 pieces of information on the online capability of 40 Australian financial institutions. Information was centred on three main areas: Internet or Desktop Banking, Mobile Banking and Website. Within these areas, points were also allocated for how well the three areas were integrated. Desktop banking 45% Banking 75% Website 20% Mobile banking 45% Other 10% Customer satisfaction 5% Customer satisfaction score from Canstar Blue survey for internet banking and mobile banking For customer-owned institutions, the methodology is slightly adjusted due to the impact of customer satisfaction results: Desktop banking 45% Banking 75% Website 25% Mobile banking 45% Other 10% 4

6 Banking Desktop and mobile banking This section looks at the features and transactional ability of both desktop and mobile banking. While desktop banking looks at features and transactions made from a desktop computer, mobile banking looks at available features and transactions made from a smartphone application or mobile-optimised website accessible from a smartphone. Desktop versions of internet banking accessed through a smartphone were not assessed for the purposes of the award. Feature category Desktop Mobile Examples of data captured Banking and other services 40% 65% Transactions 70% 70% Transfers, bill payments, transfer limits, processing Payment management 20% 20% Create, schedule and manage payments Other services 10% 10% Access to other products through same login Personal finance management Account status and statements Budgeting tools 20% 20% 35% 15% Online statements, transaction history, graphing tools 70% 70% Account balances, statements, transaction history Integrated budgeting tools, spend categorisation and graphing Other tools 10% 10% Access to other finance tools within same login Self service 15% 10% Change personal details, personalisation, modify limits Product applications 10% 10% Product applications through login Other features This section looks at other features within the internet banking platform (both for desktop and mobile) that do not involve transactions. While features such as help channels and applicable security measures apply to both desktop and mobile, other features such as compatibility and location services apply for smartphone only. Feature category Other Examples of data captured Communication 30% Alerts 40% /SMS alerts/push Help 60% Online chat, phone-back, secure mail Security 40% Extended CV certificate, secondary authentication Availability 10% iphone, Android, mobile-optimised website Location services 20% ATM and branch locator 5

7 Website This section looks at features available through the institution's website. This includes the application process for four popular products (home loans, deposit accounts, credit cards and personal loans) where customers (existing and new) apply directly through the website. Feature category Weight Examples of data captured Product applications 40% Process 80% Paperless applications, instant approvals, save progress Home loans 25% Deposit accounts 25% Credit cards 25% Personal loans 25% Online ID verification 20% Information used: e.g. , mobile, drivers licence Consumer education/tools 20% Calculators, budgeting advice/tools, online videos Ease of use 15% Website split 35% Personal, business, agribusiness Quick links 15% Rate and fees, calculators, exchange rates How consumers find products 30% Direct links, need-based links Transparency 20% All fees listed, PDS available online, direct link to PDS Online help 15% Online chat, phone-back, Web 2.0 public interaction 5% Active Twitter/Facebook account, response team available Location services 5% ATM/branch by postcode or address Customer satisfaction Applies only to Best Value Online Banking Bank Customer satisfaction results are based on Canstar Blue s Most Satisfied Customers Award Banks, where respondents with one or more financial products assessed their overall experience in the following services: Internet banking Mobile banking The average response for both categories was taken with the highest rank receiving the highest score and weighted as follows: Customer satisfaction Desktop banking 65% Mobile banking 35% 6

8 How many products and financial institutions are analysed? In order to calculate the award, CANSTAR analysed 40 financial institutions online banking platforms, made up of 16 banks and 24 customer-owned institutions. How often are products reviewed for awards or star ratings purposes? Ratings and awards are fully recalculated every 12 months, based on the latest submissions from each institution. CANSTAR also monitors changes on an ongoing basis. Does CANSTAR rate all products available in the market? We endeavour to include the majority of product providers in the market and to compare the product features most relevant to consumers in our ratings and awards. However this process is not always possible and it may be that not every product in the market is included nor every feature compared that is relevant to you. Does CANSTAR rate other product areas? CANSTAR researches, compares and rates the suite of banking and insurance products listed below. These star ratings and awards use similar methodologies to guarantee quality, consistency and transparency. Results are freely available to consumers, who use the star ratings as a guide to product excellence. The use of similar star ratings logos also builds consumer recognition of quality products across all categories. Access the CANSTAR website at if you would like to view the latest star ratings and awards reports of interest. Account-based pensions Agribusiness Business banking Business life insurance Car insurance Credit cards Deposit accounts Direct life insurance First home buyer Health insurance Home & Contents Home loans Life insurance Managed investments Margin lending Online banking Online share trading Package banking Personal loans Reward programs Superannuation Term deposits Travel insurance Travel money cards Youth banking DISCLAIMER: DISCLAIMER: To the extent that the information in this report constitutes general advice, this advice has been prepared by CANSTAR Research Pty Ltd A.C.N AFSL and ACL To the extent ( CANSTAR ). that the The information in has this been report prepared constitutes without general taking advice, into account this advice your has individual been prepared investment by objectives, CANSTAR financial Research circumstances Pty Ltd A.C.N. or needs. 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9 Online Banking Award We endeavour to include the majority of product providers in the market and to compare the product features most relevant to consumers in our ratings. This is not always possible and it may be that not every product in the market is included in the rating nor every feature compared that is relevant to you. Institution Name Integrated Personal Budgeting Tools Desktop Internet Banking Modify Transfer Limits Activate Debit/Credit Cards Apply for New Products Bank Download Mobile App Mobile Internet Banking Pay to Mobile Number Quick Balance 4 Digit Login Automatic Logoff Online Chat Report Date: JUNE 2014 Savings Calculator Website Mortgage repayment calculator ANZ Bank of Melbourne BankSA Bankwest BOQ Commonwealth Bank ING DIRECT Investec Bank Australia MyRate nab Rural Bank Limited St.George Bank Suncorp Bank TIO Banking UBank Westpac Budgeting Advice your guide to product excellence Report Date: June, 2014 (Based on information as on 1 June 2014) ONLINE BANKING AWARD PAGE 1

10 Online Banking Award We endeavour to include the majority of product providers in the market and to compare the product features most relevant to consumers in our ratings. This is not always possible and it may be that not every product in the market is included in the rating nor every feature compared that is relevant to you. Institution Name Integrated Personal Budgeting Tools Desktop Internet Banking Modify Transfer Limits Activate Debit/Credit Cards Customer Owned Apply for New Products Download Mobile App Mobile Internet Banking Pay to Mobile Number Quick Balance 4 Digit Login Automatic Logoff Online Chat Report Date: JUNE 2014 Savings Calculator Website Mortgage repayment calculator ADCU bankmecu BankVic Beyond Bank Coastline Credit Union CUA ECU Australia First Option Credit Union Greater Building Society Heritage Bank Holiday Coast CU Hume Bank IMB Intech Credit Union Macquarie Credit Union MyState Newcastle Permanent P&N Bank Police Bank Qld Police Credit Union Select Credit Union SERVICE ONE Members Banking SGE Credit Union Teachers Mutual Bank The Capricornian The Mac Victoria Teachers Mutual Bank Budgeting Advice your guide to product excellence Report Date: June, 2014 (Based on information as on 1 June 2014) ONLINE BANKING AWARD PAGE 2