Online Banking Gaining Acceptance

Lamberg, Erica

Online banking systems allow consumer and business customers to plug into a host of banking services from a personal computer by connecting with the bank's computers or by connecting through a bank's website.

The convenience is compelling and not only is travel time to branches reduced, but ATM machines and telephone banking are often unnecessary. And, as technology continues to develop, it makes online banking easier for the average consumer.

Banks use a variety of names for online banking services, such as PC banking, home banking, electronic banking or Internet banking. Regardless of the name, these systems offer certain advantages over traditional banking methods.

According to Timothy J. Losch, executive vice president and chief operating officer of Yardville National Bank (www.YANB.com) in Hamilton, consumers can use their computers and a telephone modem to dial in from home or any site where they have access to a computer.

"The services are available seven days a week, 24 hours a day and can be completed at the convenience of our customers," says Losch.

He says transactions are executed and confirmed quickly and the range of transactions available is fairly broad.

"Customers can do everything from simply checking on an account balance to checking the status of their checks clearing and initiating account transfers," Losch adds.

With over 500 current online banking customers, Yardville National Bank's pro

YNB Online - continues to build momentum. "Interest is steadily building and a lot of our customers like to know the service is available if and when they want to utilize it." Losch further states that as a community bank, Yardville is continually committed to offer services which will benefit its customers.

"Our goal is to offer more choices and options to best fit our customers' needs. Online banking is a convenience for people who want it yet still allows for people to come to our branches to do their banking in person," he continues.

Local banking executives concur that online banking is rapidly gaining consumer acceptance. A major factor affecting the acceptance of online banking is the available ability of easy-to-use and reliable transaction security systems. One of the biggest concerns about online consumer banking has always been the security of the systems and the integrity of transaction data.

While security remains a major issue for both the bank and its customers, there are solutions that are cost-effective and permit an unprecedented degree of security, reliability and protection from misuse.

"First Union Online Banking on the Internet (www.FirstUnion.com) offers a secure and easy way to manage a customer's finances to check balances, view account activity and transfer funds between eligible First Union accounts," explains Susanne Svizeny, First Union area president for Central/Southern New Jersey based in Pennington.

While no system could ever be called "perfectly secure" any more than a branch office could be, the cost to the institution of providing extremely high levels of security is much lower for a complete online system than is typically spent to "secure" a single physical location.

Financial institutions are beginning to educate their customer base about the types of security put in place on the Internet to protect their financial information and what to look for to ensure that their transactions are secure.

Additionally, banks must be sensitive to issues of privacy and need to provide customers with assurances that their personal information will not be compromised.

Other online services include online bill payment capability. First Union Online Bill Pay is easy to use and saves time, stamps and hassles, says Svizeny.

Features include scheduling payments in advance (up to one year), setting up recurring payments to be made automatically, and receiving bills electronically from selected vendors.

"For a very nominal fee, online banking really keeps the customer in control while offering flexibility and convenience," adds Svizeny.

Once a customer decides that online banking is a viable option, the path to getting signed on is quite simple. Typically, a checking account needs to be established with the financial institution first. Most banks and credit unions have a link on their Web site that allows you to apply for online banking and submit the application. Once the online application is sent to the bank, within five business days (or in some instances the same day) your financial institution will send you a start-up package that will contain a user identification number, password and instructions on how to begin online.

Commerce Bank, with four Mercer County branches, also has a comprehensive list of online banking services. According to David Flaherty, vice president of corporate communications, Commerce Bank was a pioneer in the online banking industry. "Early on Commerce entered the online banking arena and we've set the pace for this emerging industry," says Flaherty. He attributes Commerce's success with understanding their customers' needs. "While other banks use online banking to cut costs, Commerce will be opening 30 more branches in New Jersey, Pennsylvania and northern Delaware over the next year. Our strategy is simple we want to let people bank at our branches or online... whatever works best for them."

Online customers take advantage of Commerce Bank's service through the website (www.CommerceOnline.com). Services of checking balances, account reviews and transferring of funds between accounts are among the most popular services, notes Flaherty.

Additionally, Flaherty describes how Commerce Bank's online banking services are in real time. "If a customer goes on the website at 12 midnight to transfer money from a savings account to a checking account, theoretically he or she could go down to the nearest ATM and withdraw the money. Some of our competitors take up to 12 hours to process transfers but ours are done in real time."

What's even more impressive is that Forbes selected Commerce as one of nine of the best Internet banking sites. Besides the traditional banking and bill pay services, Commerce also offers on-line trading and investment services that are fully integrated within its website. Customers can buy and sell stocks, track the performance of their investment portfolio, monitor stocks of personal interest and access detailed research on industries and specific companies.

While the majority of online banks are set up to handle the needs of consumers, several recent arrivals to the online banking scene are catering to business customers. Services range from online bill payment to credit-management services. First Union, for example, offers two programs Online Business Banking Basic at no charge and Online Business Banking which charges a nominal fee.

With the basic package, small business can monitor recent business activity and balances, transfer funds and issue stop payment requests. The more advanced small business program allows the same features with capability to download account information to a spreadsheet, initiate wire transfers and view commercial loan reports.

Copyright Mercer County Chamber of Commerce Apr 01, 2001
Provided by ProQuest Information and Learning Company. All rights Reserved