From time to time, we update our passwords to ensure we have the best security possible. While technological advances in website security have made it safer to manage your finances online, users are still wise to keep their login passwords fresh. Fortunately for us, firms have made this a fairly streamlined process, with the Change Password function usually in a quick and easy location. While we are all in favor of a streamlined process (consider changing around 60 of them at once, like we do), this chore should not be too simple; for safety precautions, we understand the need for ID verification questions.

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In January, Fidelity became the first firm in our Annuity Monitor coverage group to offer prospective investors and clients the ability to open a new annuity contract electronically via the public site. The new tool significantly expedites the annuity account opening process, allowing users to complete and submit an application online in a matter minutes. This eliminates the possibility of postal mail delays and ensures that the firm receives all application materials in good order.

Looking beyond the account opening tool itself, we were pleasantly surprised by the excellent customer service Fidelity offered in conjunction with the tool.

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There has been much discussion about online security for banks lately and generally it has centered around the obvious importance of keeping customer data secure. Aside from this fundamental need, there are ancillary benefits that accrue from successfully implementing such measures. Among them is the ability to provide enhanced customer service online, which not only can increase customer satisfaction, but reduce service costs as well.

A recent Bank Monitor report that we published reviewed the customer online messaging centers at 14 major banks. In it, we reviewed message center design, secure message design, accessibility, timeliness of responses, etc. and in doing so were able to determine some best practices for providing this useful service.

In a telling sign of the industry’s adoption, every firm we track except one offers an online messaging center. And, of those, 85% allow clients to both send and receive messages. The major benefit of well-designed message centers is that customers can get support on specific account-related issues. Since the centers are secure behind the customer login, there is no need to filter sensitive data, which would be necessary if you were communicating via standard email.

Despite the overall high use of these centers, only 28% of firms send a confirmation email to clients confirming that customer service has received the message. More importantly, only a little over half the banks we reviewed email clients when they have posted a response to the question. Our report goes into detail and provides screenshots, examples, and best practices. Suffice it to say, however, if you plan to offer such a service, here are some important features to include:

• Set expectations - let clients know when they expect a response; and more importantly meet that expectation!
• Offer FAQs or knowledge base answers based on the client’s question prior to taking receipt of the message. This can greatly reduce support costs - after all, it is likely that other clients have had similar questions.
• Design the message center following conventions around online mail clients (e.g. gmail or Yahoo mail).
• E-mail clients confirming the submission of their question as well as when a response has been posted.

Bank of America recently launched a couple of security initiatives for both its banking and brokerage clients. To us, one of them seems pretty innovative, the other a potential nuisance.

On the brokerage side, SafePass will be used to secure online OTC Bulletin Board and Pick Sheet stock trades. The service includes an electronic card that displays a 6-digit, one-time use code. After clients place OTC Bulletin Board and Pink Sheet trades online, they will see the SafePass icon on the Preview Order page. Clients are then required to press the button on the card to display the security code and use that number to place the order. Unlike E*TRADE’s Digital Security ID, which is optional, the SafePass is required for these types of trades. We’re not sure if this is a small rollout to test the product and if BofA is planning to require this for all trades, but it does strike us as a bit extreme to require clients to use it. Complicating the matter, this is not the same SafePass card that customers of the retail bank can choose to use. So, even though the name is the same, if you are a bank customer and place OTC trades, you now have two cards to carry around.

Interestingly, however, on the retail bank side of the coin, BofA has launched a new feature for SafePass that actually allows customers to use the SafePass on a device they likely already carry around - their cell phone (they are evidently developing a card as well, but it is not yet available). Once customers have set up the SafePass system, they will be asked to request a six-digit SafePass code, which will be sent to a previously registered mobile device, each time they (or anyone else) attempts to execute one of the protected functions (e.g. transfer accounts, bill pay, P2P transfers, etc. - users can choose the functions they want to require SaffPass authentication, a nice feature). This is an excellent compromise between security and convenience - and as an added bonus, customers that sign up for this service are given higher transfer limits. If it is something that the industry at large adopts, it would mitigate the need for customer to carry a multitude of security key fobs. Now, for example, a customer who banks at BofA and trades at E*TRADE would be able to simply use their cell phone for the authentication tool.

As we discussed in our weekly e-Monitor Update, Fidelity this week updated its Live Chat tool with a new design and format. While the changes were strictly aesthetic, the tool clearly remains an important factor in connecting clients and customer service representatives.

We recently completed a review of the call centers at leading brokerage firms for our Broker Monitor report and, overall, things have improved in the past three years since the last time we looked at this issue.

The firms Broker Monitor tracks are a mix of full-service and discount brokerages and each model has its inherent strengths and weaknesses. While they are different beasts, support people must deal with many of the same types of requests and questions.  We set out to find if the level of service differs between the two groups. Are full service firms that typically rely on advisors able to translate that feel and quality to standard, phone-based customer service? Do the web-centric discount brokerages rely too heavily on their websites to handle customer queries?

We called each firm three times at various points throughout the day. After navigating through the automated call menu, we explained to the rep we reached that we wanted to have information about opening a brokerage account (including an application) mailed to us. Our request was intentionally open-ended – instead of offering a lot of information up-front, we wanted to see how deeply reps probed in terms of qualifying us as potential customers. In keeping our request rather vague, we wanted to see if the full-service firms took the chance to connect with us on a deeper level, qualifying us for accounts and services.

All calls were made to the customer service number we were able to locate on each firm’s website and tracked the following:

• Call start time
• Number of prompts (steps) through the automated system to reach a rep
• Time on hold
• Total time of call (including time on hold)
• Questions asked/information provided by rep
• Customer service hours of operation

Among the findings, which are discussed in our July Broker Monitor report, average time spent on hold went down at 75% of the firms we reviewed. The greatest improvement was seen at Schwab, which reduced its time by over two minutes to 10 seconds.