How Usability Can Increase Adoption of Internet Banking

Internet penetration, reliability of connection and security concerns are commonly cited as key inhibitors of wider spread of Internet Banking among retail customers. Admittedly, banks cannot do much about the first two factors; and whatever they are doing about the third factor unfortunately comes with its own trade-offs because many measures to improve security inevitably cause greater transaction fraction and risk alienating customers many of whom do not wish to sacrifice convenience for additional security.

My personal experience suggests that usability improvement is a low-hanging fruit that can be leveraged to significantly increase the adoption of Retail Internet Banking without any adverse side effects.

In all my years of banking with a Top 5 high-street bank in UK, I never once used its website to pay my house rent or utility bill. Let me explain why.

My apartment’s letting agent wanted rent payments to be made in favor of “MCS MERIDIAN CLIENT ACCOUNT”. Unfortunately, the money transfer screen of my bank’s website did not accept this name owing to some field length limitations in their software. When I inquired, the bank’s branch personnel told me that I should try and abbreviate the beneficiary name to “MCS MERIDIAN CLTAC” or something like that so that it would fit into this field. When I asked them what’s the guarantee that the money does not end up in someone else’s account, they told me that they were reasonably sure all will be fine as long as I used the correct beneficiary account number but they couldn’t provide any guarantees. Even when I told them that I knew of at least one other bank where such a problem didn’t exist, their response didn’t change. Added to this, I discovered that the reference / narration field couldn’t accommodate the basic level of information I’d need to convey to the beneficiary (e.g. “House Rent 98 Meridian Place Jun 2008”). This led me to wonder whether my letting agent would be able to figure out what the payment was for, even if it did reach them.

Had the website contained some simple text like “in case of space constraint, you can abbreviate the beneficiary name as long as you’re entering the correct account number”, I might have been adequately assured and used the electronic money transfer facility on the bank’s website.

Without such explanatory text and due to the wishy-washy statements of the branch personnel, I adopted a more usable option to pay my house rent every month: write a check, put it in an envelope, affix a stamp, and post it to the letting agent. This worked very fine – I had no problems writing out MCS MERIDIAN CLIENT ACCOUNT in full on the check. My bank lost one e-transaction every month.

In the case of my utility bill, even though I could enter the full and correct name of the utility company on the money transfer screen, my bank did not permit this transaction, instead directing me to use the bill payment feature on its website. When I went there, I had to select the beneficiary name from a drop down list. What was the problem with this, you may ask. Isn’t the website being more usable by offering me a list of names to choose from, instead of asking me to enter the beneficiary name? Well, the problem was, none of the available names in the drop down list matched my utility company’s name (“EDF ENERGY”)!

What options did I find in the drop down list? There was EDF ENERGY ELEC and EDF ENERG LONDON. Well, I was living in LONDON and was trying to pay my ELECTRICTY bill, so do I select EDF ENERGY ELEC or EDF ENERG LONDON? Since I didn’t have an answer to this question and didn’t want to risk paying one company for the electricity supplied by another, I gave up on the website and resorted to my utility company’s telephone payment facility which had excellent usability. Well, my bank lost another e-transaction.

Now, after recently returning to India, I learned that it was possible to use the Visa Money Transfer feature on the website of my bank (amongst the Top 3 private sector banks in India) to pay my credit card bill. My credit card is from another bank, let’s call it CCBANK. It was easy to figure out how to use the feature to transfer money to someone else’s Visa card account. However, when it came to paying my own credit card bill, there was no clue whose name I should use for beneficiary. Should it be my own name? Or, should I say “CCBANK A/c No. xxxx xxxx xxxx xxxx”, which was the name I’d need to to use if I was paying by check? A simple example placed right next to the beneficiary name field explaining what payee name I should select, would’ve given me some sense of security that the money would go to the right place. The blame for this ambiguity equally goes to CCBANK for not clarifying this in their leaflet that tipped me off to Visa Money Transfer. 

What puzzles me is how the website misses out such basic information that would help the customer but doesn’t fail to include lines and lines of disclaimer viz. we are not responsible if you send money to a wrong person; retrieval of wrongly sent payment is outside our purview, blah blah blah.

Another bank (also amongst the Top 3 private sector banks in India) uses “out-of-band” authentication via mobile phone every time I try to create a new payee to whom I wish to transfer money online. A good security measure, you might say. I’d agree. But, the problem is, I have multiple accounts with this bank and only one mobile phone. When I register a payee from my first account, I enter my mobile phone number. All’s well so far.

But, when I try to register a payee from my second account and enter my (one and only) mobile phone number, I’m blocked by an error message saying the mobile phone number is already used by another account. This might be a good security feature but it’s hardly of any use to me when the website (1) is not intelligent enough to realize that the other account also belongs to me, and (2) doesn’t tell me how to proceed under the circumstance. I was stuck and was forced to abandon the transaction.

Luckily, through contacts in this bank, I was able to find out quickly that, if I linked all my accounts under a single logon (that is, a single username and password combination), I wouldn’t face this problem.

If only a message could come up on the website – e.g. “to proceed, please link all your accounts” alongside the error message blocking the transaction, that would enable others facing a similar problem to proceed with their transaction even if they didn’t have the right contacts inside the bank from whom they could elicit a speedy clarification.

I could give other examples but it shouldn’t take a lot for banks to recognize that even slight improvements in usability can increase adoption of Internet Banking significantly and help them save the higher costs of servicing alternative channels like branch walk-in and checks.

Sooner or later, I’m sure banks will start taking notice of the importance of usabilityin their Internet Banking systems when Web 2.0 financial services companies with excellent usability like Mint, Wesabe, Prosper, Covestor and several others start luring their customers away.