Commercial
and business customers are a click away from managing their
money.
By Liese Hutchison
What keeps overhead down for banks? Minimizes check writing
for consumers? Manages money flow for businesses 24 hours a
day? Online banking. Just as ATMs swept into the banking world
three decades ago, clicking on the Internet to check balances,
move money between accounts and pay bills is gaining popularity.
"The systems that are available today are easier to use, less
expensive and more comprehensive in scope then just a few years
ago," notes Jim Saitz, president and CEO, Missouri State Bank.
"Technology is getting better and more cost effective for the
consumer." Saitz notes that because the technology is less expensive,
the smaller banks' online services can compete in cost with
larger banks and virtual banks.
Firstar, one of the largest banks in the region, was ranked
third out of 51 banks analyzed by Microbanker Online as one
of the most customer friendly banks on the Internet. According
to the FDIC, there are approximately 3,000 bank web sites in
the United States today, but only 500 offer interactive banking
functions that let customers do everything from view their account
balances to pay bills to apply for loans.
Firstar, which began offering PC or online banking in 1996,
currently has more than 190,000 online banking customers. "More
and more people are doing their banking online, because they
are more comfortable using the Internet and like the freedom
of banking on their own terms, whenever and wherever they want,"
states Thomas O'Hara, director of Firstar's e-commerce group.
David Loeffelman, senior vice president of Operations for Missouri
State Bank, says that before a business decides to go online
for its banking needs, it needs to ask a few questions. "What
security procedures are in place? How quickly can I access information?
What cash management services are available?" he asks. Loeffelman
notes that businesses can save money by banking online, because
bill paying is less expensive-minimized paperwork, postage and
labor; cash can be managed better-money can be transferred between
check paying accounts and higher interest banking accounts as
needed; and many of the banks' fees are lower by going online-stop
payments, for example.
Gordon Roewe, senior vice president of business banking for
Commerce Bank, says most businesses start banking online in
stages because of the learning process. "Time is needed upfront
to learn the system, but banking online eventually will save
a company money," he remarks. A typical company may just start
out with the ability to view account balances at any time, then
move into bill paying as it becomes more comfortable with banking
online.
One aspect of comfort for businesses is that the back up to
online banking is the physical bank and the company's bank representative.
"It's still important to maintain a personal relationship with
someone at the bank," he notes. In case the company's Internet
access goes down and it needs to transfer money, the company
can still call the bank and have its rep transfer the funds
over the phone.
Another aspect of comfort is security. Roewe notes that online
banks' access is moving from software installed on individual
personal computers in the office to Internet-based security.
"Larger banks are going to the Internet browser and each person
has security codes to get access to specific activities," he
states.
Loeffelman sees two trends in online banking. "Bill presentment
is one trend," he notes. "For example, instead of AmerenUE sending
a customer a physical bill, the company would email it to the
customer, who can then authorize the payment online out of his
checking account."
The second trend Loeffelman notes is the move to wireless access.
"We're seeing the use of hand-held devices to access financial
information. There still are some security issues that need
to be addressed, but that day is coming."
Liese L. Hutchison is an assistant professor in the department
of communication at Saint Louis University and a free-lance
writer.
