We are going to view an Internet Banking Demo this week and this is all new to me. We have never had any type of Internet Banking. Please give me some tips on what to look for in a system. I don't know managements plans as to how deep they plan to plunge into this but I am assuming it will be fully transactional. Should I make a run for it while I can or can I survive this?

We have NetTeller(Jack Henry Product). No major problems, somewhat user friendly. Hold tight, it will be a good experience.

We're a small community bank and we've been on-line with a transactional system since the spring of 2000. One of my many hats is "web developer" for the bank (also security officer, branch manager and sometimes janitor. . . ). The interface with our non-transational site is seamless, the company was very easy to work with and our customers love it. Year to date I've only written maybe 1/2 dozen checks on my personal account - everything else is done on-line!

I'm definately a fan.

The nugget in the above reply is that they went with the internet banking product that is supplied through their primary vendor. Fiserv offers the same product and it goes together seemlessly. If the presentation is from a third vendor, good luck and check to make sure that they already have an interface with your primary vendor as that interface can be very expensive.

You say transactional, but most internet banking products are not transactional, other than they allow for transfers between like owner accounts - that's not considered transactional internet banking. Transactional comes into play when you add bill payment, as payments are made to a third party.

You will find that internet banking is one of the easiest products to manage, as long as you don't manage the actual site with a simple URL from your home site to the internet banking site the only direct connection. Of course, policies, disclosures and sign-up procedures need to first be in place as you go down this road.

First of all remember to conduct some due diligence on any company that you are seriously considering using for Internet Banking. When you get to the point that you can eliminate two of the four companies you are going to interview, ask to see contracts, financials and SAS 70's. Document all of these findings so you can show that you conducted a thorough review before giving this company any customer information.

Ask to make sure there will be someone available for training and assistance after the deal closes. It is amazing how attentive the sales folks can be, but the ones actually in charge of implementation can drag their feet a bit.

Once you have made the management decision to go ahead and select a vendor, a lot will depend on the services you plan to offer. There are so many considerations based on what your system will allow the consumer to do...

There's also a pretty good Risk Management of Outsourced Tech Services on the FFIEC site. I've enhanced my due diligence doc with some of the FFIEC provisions.

You have a host of vendor due diligence issues as well as the basics of what they offer, what you'll offer and if it will all be done at once or in phases. There are cost considerations and documentation, who'll do what, when and if they will also do your Website and/or portal. E-Sign and eStatements may also be issues, are they "push" or "pull" and which do you prefer?

I would be familiar with your IT exam questionnaire and I would ask my regulator, what issues are they seeing so that you can avoid them if possible, or at least address them up front.

Find out what their average % down-time (or up-time) is, and if there will be tech support available 24/7 to address any issues that may arise.

Due diligence, due diligence, due diligence! Just make sure you do your homework on all the vendors that you are reviewing. We have been offering internet banking for 6 years now including billpay with no major problems but it is an area of scrutiny every time the examiners walk in the door, however we only offer internet banking to existing customers so to limit our risk as far as CIP goes. Good luck!

You did not indicate if you were going to open new accounts as part of your program. I worked in loss prevention/fraud control for an internet bank. There are many issues!

There is SO, SO much that you need to look at. Here's a few key points (using my hindsight):

- Intergration - how well does it work with your core system? (Setups, transfer of history, transactions etc.)

- Customer facing - is it easy to use, does it have the features that are most important to customers (hint: it's not stock quotes)

- Vendor - Is the vendor solid, do they keep information secure, will they be here in a year, do they spend money on R&D, etc. (this is the whole due diligence piece)

- Price - will you be penalized in pricing the higher your user base goes up? Flat, tiered and capped fees are better than per user if you plan on growing your users.

- Customer service - who's going to provide it and when, and then what will it cost. If you're going to provide it do you have the resources?

- Marketing - what type of growth and retention program does the vendor offer. Can you segment and communicate with online users? After all, the ROI comes from being able to retain and cross sell these customers.

Those are the key pieces I can think of at 5 of 5 on a Monday. Good luck, feel free to post more questions as you go through the process.

We did not go with our core processor because they were a lot more expensive and we have been very sorry.

You can ask them about their downtime and support, but they probably won't tell you the truth. I would recommend checking lots of references. Ask for references that have the same core processor as you do.

They all have very different pricing. Here are some costs you should ask about: One time set up cost, Annual cost, Hardware, Website set up, Website hosting annual cost, User set up, Fee per user per month, and Training/install.

We will be going on line very soon and I'm the trainer and also the marketing dept. Your tips will be very useful to us also.

okie, where do you work?

I chime in with the Wave Watcher and recommend the visit the FFIEC Information Systems examination procedures. Lots of terrific info on vendor/outsourcing. Also the best checklist for the due delligence requirements. Document the vendors you review. List all pros and cons for each vendor you review. Have an "inner circle" team to set in on your demos so they can help with the final decision. We began with Net Teller and now have PCS host our website. Happy with PCS.

I would also suggest going with your software vender if possible. We have started internet banking at the beginning of the year. Not with our vender, and have had integration problems. I don't personally like it, but then it wasn't up to me what we purchased. So we plug along and try and keep working out the bugs and then put on a good front for the customers!

I've been through reviews of several internet banking vendors as part of renewal of late and have concluded the following:
(1) It's harder than it was 3 years ago to see a difference between the "best of breed" internet banking providers and the core processing internet banking solutions.
(2) Not all core provider internet solutions are created equal. They may look the same on an RFI but they are way different when you see them up close. Be sure to check out the online sites of the references.

Agreed. We're changing back to our core provider. The features and functions are about the same, the integration is better and the cost is lower.

What are the pros and cons of an internet banking provider vs. a core provider with internet banking?

We are going through conversion currently with an internet banking provider. We are having integration issues. It's a headache because you're in the middle of the provider and your core system attempting to work out these problems!