Wells Fargo & Company has announced an online storage service called vSafe that lets users store digital files and documents using the bank's enterprise infrastructure.
The 156-year-old financial institution said it is the first financial entity to provide such storage capabilities, and that customer need is the driving factor for the new vSafe offering. The company plans to deploy the product by year's end.
"More and more customers are turning to our online solutions to manage their personal and business finances, and we developed the service to respond to their need for secure online storage," Wells Fargo president and CEO John Stumpf said in a press release.
According to Wells Fargo, 75 percent of customers surveyed believed storing documents safely is important and are looking for a better, more secure approach.https://o1.qnsr.com/log/p.gif?;n=203;c=204655439;s=10655;x=7936;f=201806121855330;u=j;z=TIMESTAMP;a=20400368;e=i
"Research indicated customers felt that secure online document storage fits within Wells Fargo's offerings because they already trust us with their finances and information," said Katherine McGee, senior vice president of Wells Fargo Internet Services Group.
Wells Fargo, which has $575 billion in assets and 159,800 employees, is the 27th largest U.S. employer. It's the fourth-biggest bank in terms of assets, and sixth in terms of stock market value among banking institutions. The company has a customer base of 159,000.
Yet a series of data breaches and lost data tapes at financial institutions such as Bank of America could make gaining consumer trust for such services an uphill battle.
According to the 2007 Consumer Survey on Data Security, consumers are leery of several industries and the potential for data loss or theft.
Banks placed fifth on the survey list, with health care providers, pharmacies, employers and the federal government rounding out the top five. More than 62 percent of respondents said they had experienced a personal data breach, according to the survey conducted by the Ponemon Institute.
One storage analyst said those concerns are why users should investigate what level of security an organization provides before signing on.
"vSafe seems like a good idea. More and more critical documents have gone or are going digital," said Charles King, principal analyst at Pund-IT.
"I would want to know just how secure the offering is, what kind of guarantees they're making about data preservation and privacy. Wells Fargo should be able to demonstrate that customers' data is as secure virtually as it is in behind the doors of a bank vault," he said.
The fact that Wells Fargo isn't partnering with a third-party storage provider seems a bit unique, noted another industry pundit.
Bob Laliberte, an analyst with Enterprise Strategy Group, expects most non-storage organizations to take an OEM approach, since storage isn't a core focus.
"I absolutely believe this is just the first of many traditional companies getting into the online backup or storage space. The reality is that these companies will most likely OEM an existing business than build it out from scratch," said Laliberte.
Once an institution hitches its storage service to a storage vendor, the level of success will be tied to service quality, Laliberte said.
"I don't expect these companies to compete against Amazon or Nirvanix, but rather partner with companies that have developed services utilizing those back ends. Keep in mind other suppliers could include EMC via Mozy or IBM via Arsenal Digital," he said.
Using vSafe, customers can upload virtually any file format, from audio files to Word documents. Documents can be filed into user-created folders under specific headings, such as medical, legal or family. The service is integrated with the Wells Fargo Online banking service, and user account statements are automatically uploaded each month.
"Customers trust us to keep and manage their information," said Jim Smith, executive vice president and head of Wells Fargo's Internet Services Group, in the press statement.
"Compared with home filing systems, which can be difficult to maintain and organize, the vSafe service gives customers peace of mind because it's a safe place to store, organize and protect copies of private information," Smith stated.
The bank said all data is encrypted for secure transmit and storage and additional optional security devices are available as well. The service provides online help and real-time support with a dedicated toll-free customer service number.
While consumers are likely the first market target, one analyst says it could also be a good fit for the small business or small home office environment.
"It would provide safe online storage for critical documents for SMBs and SOHOs. We know that this is a need of the marketplace; it will be especially convenient for those who bank at Wells. Documents are encrypted and protected by the bank's firewalls," said Mary Monahan, partner and senior analyst at Javelin Strategy & Research.
Monahan also noted that the storage service promotes "green" banking.
"Thirty-nine percent of online bankers received both paper bills and online bills in 2007. Now they can automatically keep their Wells Fargo statements in their vaults and they have a search function to help locate the file they want. Safe, online vaults may be one impetus to help these double-statement bankers finally go paperless," she said.
The vSafe service will deploy this summer in select regions, said a bank spokesman. Pricing starts at 1GB for $4.95 a month, 3GB for $9.95, and 6GB for $14.95.
King noted that the cost is also an aspect users should evaluate, given the many options on the market.
"Numerous free online storage offerings are available, and if you want something more structured and secure, MozyHome, for example, offers encrypted online transfer/storage of files for $4.95, with 2GB of space," he said.
Article courtesy of Internet News