CommSec launches new integrated offering but fails the "online" test

CommSec has today announced a new integrated cash management and online trading solution which it says will help grow the self-directed investor market.

The group says it surveyed some 7,000 clients and conducted face-to-face interviews to find out what investors want from a trading account.

It’s no surprise then that CommSec has chosen to integrate trading and cash management accounts, offering a single log-in, auto-sweep facility and linked debit MasterCard.

The offering is not that dissimilar to existing linked savings and transaction accounts, but it comes with the added benefit of trading functionality and the ability to use cash sitting in the account as collateral for margin loans.

The bank will kick off marketing on the weekend with a go-live date of Sunday June 8 and a new website at http://www.bettertogether.com.au/

CommSec already holds a massive 48 per cent market share in the broking market with 1.5 million accounts, so to attract new funds it rightly acknowledges the need to deliver something above and beyond the norm.

Which is why I was disappointed to hear CommSec will still be requiring new customers to print and sign their “online” application and present 100 points of id for verification.

ING Direct have taken a different path, making it easier for customers to verify themselves online and as a result removing the paper from the application process.

The online application is not yet live so we can’t check to see if they make it easier for existing bank customers, but if CommSec is serious about growing the self-directed investor market it should be considering making it easier for new customers to apply online and start trading immediately.

CommSec says it has modeled the new account on international offerings including those from E*TRADE and Charles Schwab in the US.

Yet both companies conduct online identity verification and back it up with phone and chat support in cases where customers are about to drop out of the process.

Thanks to changes to the 100 point identification process delivered as a result of anti-money laundering measures, Australia's legislative environment is now more supportive of channel-neutral verification.

As the battle for cash investments takes shape I suspect those institutions that are in greater need of a boost to their deposit book will look to streamline the online application and verification process.

Consumers may currently be used to providing 100 points of ID and signed paper documents, but this could change very quickly once they find out not all institutions demand it.