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Millions of Americans using online banking services

New Orleans CityBusiness, Jul 12, 2004 by Tommy Santora

Banking hours are no longer short and sweet. Millions of Americans have stretched banking hours to 24-7 via the information superhighway.

Online banking increased 30 percent in the first quarter over the same period last year as 22 million consumers logged into their accounts at the nation's 10 largest financial institutions, according to a study by comScore Networks, a global information provider in Chicago.

By 2007, more than one-third of all American households - 42.5 million - are expected to register to bank online by paying bills or checking accounts.

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Banks have been heavily promoting their online programs and users have found it a lot more convenient than going in, standing in line and using the traditional ways to do their banking, said Graham Mudd, senior analyst at comScore Networks. There is no sign of customers letting up in these activities.

According to the study, 4.3 million people paid at least one bill online during the first quarter 2004.

ComScore tracked 2 million Internet users through the first quarter. Bank of America leads in online banking with 10.9 million registered customers.

Overall, 16 percent of the tracked customers paid bills online, but bill pay users rose from 1.9 million in April 2002 to 4.6 million in March, a 37 percent jump from 3.6 million in the first quarter 2003.

People who use online banking are more loyal customers, use more services and carry higher balances during their service, Mudd said. It's good for banks, too, because they can offer people other programs and ways to invest their money when they're on their sites.

Hibernia and Whitney Bank, the top two financial institutions headquartered in New Orleans with a combined 90 branches locally, report increases similar to the national trend in registered online consumer and business bankers. Whitney and Hibernia launched their programs about the same time five years ago.

Whitney and Hibernia branches allow free bill pay to cooperating businesses, transfer of funds between checking and savings accounts, payment of car and house loans, e-mail alerts on all transactions and files to download accounts to desktop personal financial management software such as Quicken, Microsoft Money or QuickBooks.

My life is different than my father's. People are always on the go nowadays and looking to control their money at their convenience, not just from 8 to 5 on weekdays, said Jeff Heincelman, vice president of Internet delivery and head of Hibernia.com.

Whitney Bank's online transfer activity increased 26 percent over the same period last year with approximately 2,600 people paying bills per month on the Internet. Bill pay enrollment was also up 38 percent in 2003 with the highest percentage of users in the 20-29 age group.

We find out that when we first get people involved with some of the simpler programs then they want to try more and find out more about all they can do online, said Ed Valentine, vice president of alternative delivery at Whitney Bank. A lot of folks start out by using individual sites of their businesses to pay their bills, and then they see that is easy, so they advance to just using the bank site after awhile, instead of paying through 10 different sites.

Valentine said two factors keep online usage from increasing even more: education and security. Whitney Bank lets customers sample its online programs through an online demo process. Security tips are provided on Hibernia and Whitney Bank Web sites to warn consumers of the proper steps to take to guard against identity fraud.

The rule of thumb is you never give personal information onto a site that you receive from e-mail or a pop-up screen, Valentine said. Go to the authentic address or call the bank to verify any information.

The latest security problem concerning online banking involves hackers using a third-party browser add-on or pop-up advertisement to install spyware on a personal computer and track the user's browser and read the keystrokes of the user name and password on the account. The SysAdmin, Audit, Network, Security Institute, a national source for information security training in Bethesda, Md., said the pop-up threat is a recent phenomena.

People are sometimes just not as conscious of things on the Internet as they should be, and that's what hackers try and play off of, said Marcus Sachs, Storm Center director of SANS. Most people see pop-ups when they check their bank accounts and just click OK to bypass them or just ignore them and give out personal information anyway. Consumers just have to watch what they do.

Sachs said consumers should change their browser security settings to high and make sure all anti-virus software and operating systems are up to date and protected by a firewall. If these steps are taken, Sachs said, the pop-up viruses should not affect online banking customers.

It's the same crimes that were being done on banking customers since 1883, Valentine said. People have been stealing identity, forging documents and stealing wallets and purses for more than 100 years, and now it's the same type of crime committed in a different way over the Internet.

Millions of Americans using online banking services

New Orleans CityBusiness, Jul 12, 2004 by Tommy Santora

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