FYI all ... positive article on the market
Use of On-Line Banking Grows
As Banks Offer More Features
By NANCY BOYD KENNEDY
Special to THE WALL STREET JOURNAL INTERACTIVE EDITION
To pay his bills, Ted Hills used to write out up to 50
checks a month. But today, as a customer of his bank's
on-line bill-payment service, the Lambertville, N.J.,
resident settles his bills with just a few keystrokes.
"These days, I write 10 checks a month at most," says
Mr. Hills. "Paying bills on-line is so easy that even if it
weren't cost-effective, it's worth it in time savings."
Like Mr. Hills, a lot of consumers are finding that on-line
services can change the way you think about the
mundane -- even hateful -- task of banking. Last year,
Jupiter Communications, a New York-based market
research firm, estimated that 4.5 million households in
the U.S. bank on-line, a figure the firm estimates will
reach 18 million in five years.
On-line banking has
grown as individuals
increasingly are able to
perform more banking
functions on-line. When
Wells Fargo & Co. --
one of the first U.S. bank
to go on-line -- launched
its Internet banking
service in May 1995,
customers were able
only to check account
balances.
Today, on-line bank
customers can pay bills,
transfer money, make
investments, apply for
loans, download credit
card statements and
balance their
checkbooks. Using
so-called push
technology such as
Vertigo Development
Group's One on One
software, banks can
e-mail customers when a
checking account
balance is getting low, a
certificate of deposit is
coming due or a stock
price is breached.
If you're thinking of banking on-line, you'll need the right
hardware -- at least a 486/50 MHz PC with 12
megabytes of RAM. To combine your banking with
money-management software, you'll need at least 50
MB of free hard-drive space. You can get by with a
9600 modem if you use a bank's proprietary software,
but banking via the Internet requires at least a 28.8 kbps
modem. Macintosh users are at the mercy of their bank
-- most banks offer only PC-based applications.
You'll also need to decide how to bank; most banks
provide a number of options. Your bank may have its
own proprietary software; money-management
programs like Quicken and Microsoft Money offer
banking capabilities; on-line services like America Online
and Prodigy provide their own banking software to
members; and banks are beginning to offer Web-based
services.
Deciding how to bank on-line depends largely on the
transactions you want to make. But the decision also has
to do with your personality.
"People are generally either organizers or transacters,"
says Vivian Lytel, vice president for First Union Corp.'s
on-line access products. "Organizers want to bank as
part of an overall money-management program, whereas
transacters just want to do their banking as quickly as
possible."
Intuit Inc., the Mountain View, Calif., maker of Quicken,
even offers a hybrid program that addresses both desires
called BankNow. "Essentially, it's a one-page version of
Quicken," says Enrico Roderick, Intuit's director of
on-line transactions and Quicken.
Still, it may be that only the most computer-literate
people find on-line banking trouble-free. Richard
Duprey, a Teaneck, N.J., police officer, had to ask a
friend to help him install a faster modem -- and his wife
turned over the banking chores to him when they went
on-line.
Mr. Hills, himself a programmer, faced a computer glitch
that frequently prevented him from getting a connection
to his bank. "On-line banking can present challenges for
the ordinary user that shouldn't be glossed over," he
says.
But banks are trying to help customers through the
learning curve. When the Bank of Upson County in
Thomaston, Ga., went on-line, it offered free software,
three months of free on-line banking, 3% financing on
loans for computer purchases and free training sessions.
Assistant Vice President Lauri Irvin even scheduled
evening and weekend sessions to accommodate
customers' work schedules.
You'll want to weigh the costs, too. For example, banks
may charge $5 or $10 a month for bill payment. (To
compare on-line banking fees, check out the listing at
Bank Rate Monitor's Web site).
"If you pay only seven or eight bills, it may not be worth
it," says Jim Bruene, editor of Online Banking Report, a
Seattle-based newsletter for the banking industry. "You
also should take account the time commitment you'll
have to make to learn the software."
Doubts about the perceived safety of transmitting data
over the Internet -- even though it is encrypted for
security -- also make many people wary of Web-based
banking. But increasingly, that issue is becoming less of a
worry.
"Customers won't have to be concerned about safety if a
bank guarantees that it will make good on any losses,"
says Doug Braun, vice president and chief technology
officer for InteliData of Herndon, Va. Wells Fargo, for
example, guarantees it will cover any on-line losses due
to technological problems or cyberfraud.
Last year, InteliData introduced MoneyClip, a smart
card that acts as a "security key" to access banks
on-line. The wallet-sized card is housed in a so-called
reader that slips into a computer's 3 1/2-inch disk drive.
Identifying data is then entered to authenticate a user.
InteliData, as well as Hewlett Packard Co.'s Redwood
City, Calif.-based subsidiary VeriFone Inc., whose
smart card is called Personal ATM, predict that these
cards eventually will be used to download "e-cash" from
your bank account for Internet and physical retail
purchases.
However, Mr. Bruene believes smart-card technology is
still several years from perfection. In the meantime, he
believes that bill-payment services, or bill presentment,
will drive the move to on-line banking.
"If you can receive your bills on-line and pay them all in
one keystroke, it is definitely a better process than the
old-fashioned way of paying bills," he says.
Wells Fargo expects to go live with bill presentment by
the end of the second quarter, according to Susan
Weinstein, vice president for the on-line
technical-services marketing group. CheckFree, an
Atlanta, Ga., processor of on-line bill payments, already
is conducting a pilot program with eight companies,
including Miami-based utility giant Florida Power &
Light.
"The numbers are small -- just 500 of our seven million
customers have signed up -- but people seem to like it,
particularly those who travel," says Jill Sands, project
manager for electronic billing.
For now, people are excited about what they can do
already. Mr. Duprey sits down at his computer once a
month and sets his bills to be paid at the right time. Mr.
Hills compares credit card offers and transfers balances
to take advantage of low rates.
All of this leads one to wonder whether physical banks
are an endangered species.
"I don't think physical banks will ever go away, but in the
future we certainly won't need a Taj Mahal-sized branch
on every corner," says Online Banking's Mr. Bruene. |
