How Does Your Bank Measure Up, When it Comes To On-Line Banking

How Does Your Bank Measure Up, When It Comes To On-Line Banking?
Check Out MODE's On-Line Banking Services Table...Click Here
by David Banyas

There is yet another sweeping Internet trend taking hold of the way we’re used to doing things and upgrading it. As with every new thing, it provides exciting possibilities, innumerable choices, and some apprehension in the customer. It may take time to accept these novel ideas at first, but in the end we may forget the way it is now and wonder how we ever managed without. Welcome to the (relatively) new world of Internet Banking.

The International Data Corporation (IDC) predicts that there will be a 500% increase in households using online banking by the year 2003. Every local bank in Central PA either already has online services available or is developing them for release in the near future. And online banks have slowly begun to gain a percentage of the banking consumer market. The established way of managing finances is on the verge of a complete overhaul. What is online banking? What are the benefits and drawbacks? Why is it likely to replace most of the hands-on transactions we do today? Let me explain: I’d like to use a scenario suggested to me by Scott Binghaman, the Operations Manager at Hershey Federal Credit Union (HFCU). Imagine that you’re on vacation in Jamaica when you find a one-of-a-kind sculpture that your mother would love. The sculpture costs $500; you have $100 in your checking account, $60 left on your credit card, and $2500 in your savings account. You can find access to the Internet at, say, the local library or at your hotel. With a "Real Time" application, meaning that your account reflects transactions immediately and not on the next business day, you can transfer the funds from your savings account to your credit card and purchase the sculpture instantaneously. No matter where in the world you go and depending on the resources, this may take mere minutes to carry out … possibly even less. Online banking affords this and many other types of instant manipulation that lets the customer have as much control over his/her money as the bank does. I’m sure that you can easily substitute a more serious dilemma where this type of money shifting would be vastly more invaluable.

Online banking simply removes the veneer of the physical bank to allow you to access your accounts, investments, loans, and more. Some of the branch banks in our area have had this capability for nearly four years, others more recently, and still others have yet to get a website. After arduous research and having to conform to bankers’ hours just to talk to live people, I found out some pretty sensational things are happening right here in the Heart of Pennsylvania. Take a look at the sidebar for a quick reference to what’s available in this newer kind of eCommerce.

The features that are common to nearly all online banks are about the same as what’s currently available at branches. You can check the balances of your savings, checking, money markets, and credit accounts; transfer funds between any and all accounts; have bills automatically paid on a timely basis, make stop payments, change your PIN number, and view account histories. Some banks have fees associated with these services, while others charge nothing. Many allow you to reorder checks or trade stocks. And some even have demo accounts to experiment with before you decide to open your own account. Others have cutting-edge technologies that you might not expect to see.

(Check Out MODE's On-Line Banking Services Table...Click Here)

Commerce Bank, a New Jersey-based bank, was the first bank in Central PA to remain open later than other banks — and seven days a week, at that. While Commerce does have an online service complete with a demo account at: www. bank.commerceonline
.com, it serves the New Jersey network of bankers. So, Steve Birmingham, Director of Technology at Commerce, provided me with the Dial-Up version of Commerce Online. The difference between "dialing up" and using the Internet is that special software must be downloaded onto your computer to provide the banking format and enable your modem to access another modem directly by dialing that number. There is still the capability to transfer funds, pay bills, and check on loans. The billpayer service is $5/month, but that’s relatively fair. I spoke later with Donna Bonny in Commerce Online’s Customer Service on the pros and cons of dialing up. Drawbacks to the Dial-Up version are 1) that there is a twenty-minute time out to keep their limited amount of ports free to more customers and 2) only the customer’s computer can be used to access the accounts. That would make the above Jamaica scenario impossible to perform. Birmingham told me that in the next few months, Commerce will unveil the Internet system for Pennsylvania bankers. And, as with most of the features at Commerce, Birmingham assures their online services and "technolog[ies] are totally free."

Eileen Quinn and Laura Wakely at Fulton Bank were very accommodating as they explained their Internet capabilities at www.fultonbank.com. Using the demo, I transferred funds back and forth, added vendors to my billpayer database, and checked my mortgage status. It’s a very quick application and it instills customer confidence by promising their Y2K readiness and privacy policy. Fulton does have some nominal fees for billpayer plans and for stop payments, just as with a regular account, but it is a valuable service being provided here.

Harris Savings Bank, www.harrissavingsbank.com, has a double-partitioned resource from which to do different transactions. Net.Bank is a free service featuring the basics: account balances, transfers, loan inquiries, and a 3-month history which can be downloaded and automatically formatted to Microsoft Quicken and Micro Money software. Net.check is the fee-based service, which provides the billpayer application. David Forbes, Harris representative, told me of a very special feature that Harris and only a handful of other banks currently have: check imaging. The check imaging feature is just that … you can view cancelled checks, front and back, on your computer! Not only that, but if you require proof of payment for some reason, the check image is legal. Even the IRS will accept them! I was kind of blown away by this advanced technology so early in the online banking game.

PNC Bank’s site, www.pncbank.com, is very comprehensive and consumer-friendly, unlike the male customer service rep I wanted to ask a few questions of. Oh, well. The demo on the site (click on the "ACCOUNTLINK" icon in the upper right corner of the home page) reveals that it only provides the rudimentary features of online banking, but … the billpayer service is free! A perk is a perk, right?

Pennsylvania State Bank has an equally dynamic site, www.pastatebank.com. Although there was no demo that I could find, nor could I get any PSB rep to return my calls, the site seemed to provide a generally basic, but easy-to-use, format. Good for the customary banker.

The local credit unions seem to be leading the way in the online market serving Central PA. Greg Smith, CEO of the Pennsylvania State Employees’ Credit Union (PSECU), definitely has his finger on the pulse of this burgeoning new market. The site, www.psecu.com, puts every possible technology available at the customer’s fingers. The usual slate of online offerings is given plus billpayer services, check reorders, a 12-month history, and just last Thursday, the check imaging service was added. PSECU even offers, get this, withdrawal. You type in the amount you want from your account, and a check appears in your mailbox in a few days. All of these services are absolutely free. There are even a few styles of checks to reorder that are free. Not everyone can be a member of PSECU, but you may already be eligible and not know it. Smith is very informed about the growing online market, following trends and technologies that the competitor Internet banks use. Since 1996, PSECU has had some level of online service and now PSECU seems to be the leader, at least in this area.

Even Scott Binghaman, the Ops Manager of HFCU who offered the Jamaica scene earlier, defers to PSECU as the regional leader in online banking. Therefore, Binghaman explains, "we are always trying to keep up with the changing technologies. It’s huge stuff out there." Skimming through www.hersheyfcu.com, you can see HFCU has nearly every innovation that PSECU has, even the withdrawal feature. Plus there’s a new feature called Googleplex, which helps children understand the financial world. And, true to his statement, Binghaman gave me examples of the technologies just around the corner. One is voice-activated online banking where you might access your account and transfer $200 from your savings to your checking account … without taking your eyes off of the road or your hands off of the steering wheel. Another future capability is finding out your net worth by compiling all of your accounts, CDs, stocks and bonds, and all other finances to produce a total monetary picture of yourself. As Binghaman continued, it was difficult not to become excited about it with him. He seemed to be a true visionary in this quickly blossoming field.

Mark Bayer of Vartan Bank affirms that "Vartan will have Internet banking in the first quarter" of next year. Bayer proudly reports that Vartan’s billpayer service will be totally free, putting Vartan in more serious contention for online bankers’ attention.

Like Bayer, Chris Langley, of Members First Credit Union, promises that the current direct dial-up users of Members First’s computer services will be able to access the Internet within the year, and predicts that with the addition of the Internet availability, the number of users connecting with the bank should raise from 8,000 to 10,000. Quite a testimony to the success of online banking in the area.

Next, I explored the variety of Internet banks. That is, the ones which are usually branchless and work exclusively off of the Internet. I visited www.gomez.com, the quintessential consumer advocate for all Internet resources, to find out what the best-rated Internet banks currently are. The number one Internet bank for the last four quarters is Security First Network Bank (SFNB), www.sfnb.com. The reason for its triumphant placement in the onslaught of Internet-only bank competitors is its "tightly integrated suite of deposit and credit card products with online applications, lifetime account histories, and competitive pricing." SFNB also has 24/7 customer service (phone) and is currently offering a 6% APR on all account balances under $10,000 until April 2000. Its on-site resources, the confidence that customers feel with using it and overall cost are the major selling points of SFNB. Some down sides are "its lack of support for loan products, and [SFNB] can take a while to respond to e-mail inquiries."

After recently hearing about the Gay & Lesbian Internet Bank (G & L), www.glbank.com, I visited the site to see what the gimmick was. G & L, which does not serve only homosexuals, is dedicated to providing a discrimination-free resource that will fairly give financial support, primarily regarding loans and refinancing them, to every single person. There has been a hushed prejudice in much of America’s banks against gay couples that apply for home equity or business loans. G & L has offered a haven for those who deserve what they are routinely denied.

As you can see, there is a wealth of online banking to rummage through right now. If you didn’t see your bank in the piece, they either do not have online services yet or simply refused to answer my calls. Finicky folk, bank personnel. Take a few moments to explore this new world. The versatility of being able bank wherever a computer is will soon be commonplace and expected from all banking institutions. You may never have to worry about Friday evening lines at the drive-through windows, being shuffled through velvet rope mazes, or being stuck in the middle of nowhere without money ever again.

(Check Out MODE's On-Line Banking Services Table...Click Here)