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Doing Banking Online

People will access banking web sites. They'll surf them. They'll compare them. They'll research them. But fewer than 10% of all customers in the financial system will bank on-line.

Part of this low figure is, of course, the fact that not all households have a PC. But it doesn't explain the reason that of the 40 to 50 million people now accessing and comfortable with the Internet, only between six or seven million are banking there.

Paul A. Murphy, author of "Banking Online for Dummies", in an interview with American Banker says the principal reason is that bank web site users simply have not been taught how to use the banking sites in order to do their banking on-line. He suggests that information and training have to come from the customer service people in the financial institutions themselves.

And customer service has not really been pushed to explain or encourage this service, because administration would rather see the efforts of their employees going to where the bank can make money. Experts agree, doing banking over the Internet is not going to mean a whole lot of revenue for several years, until costs are recovered.

The fact remains, says Mr. Murphy, that the Internet is not new anymore. The time is coming, in his opinion, when all banks are going to have to offer on-line banking. It has gotten less expensive to set up, with "plain vanilla" sites (which in his opinion are all that is necessary) costing less that $100,000 to create. Having the web site and being able to do basic banking on it levels out the services of the mega-bank and the community bank.

Copyright © 1999 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 6, 7/99

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