 Banking Online
First Published: September 1999
Last Update: April 2002
Author: Computer Partners
Americans haven't been completely happy with online banking.
In a recent article by Beth Cox of InternetNews.com. it was
reported that although the absolute number of online banking customers grew
100,000, to a total of 6.3 million in the past 12 months, 3.1 million U.S.
adults have discontinued their use of online banking.
Apparently only 35 percent of online bank customers who
discontinued their service were inclined to try it again.
The reason for this displeasure is that customers found the
service too complicated and the customer service poor.
Consumer groups and some lawmakers are also worried that
recent changes in electronic disclosures could undercut consumer protection laws
designed to give people critical information about their loans, leases, credit
cards, and bank accounts.
As of August, US banks have been able to send regular deposit
account statements by email and can make statements available on bank sites to
customers who request electronic delivery.
According to Reuters, in an attempt to address concerns
associated with these changes, the Federal Reserve revised its broader
electronic disclosure proposals, first published in March 1998.
Under the new proposals disclosures would still be required
in paper form for those transactions usually conducted in person, such as
mortgage closings or automobile loans and leases.
The negativity surrounding online banking hasn't affected all
American banks.
Bloomberg News reported in early August that Wells Fargo, the
seventh largest U.S. bank, had signed up its millionth Internet customer in
early August, the most of any U.S. bank.
Most of the major Canadian banks offer online service and
although the stats aren't available on customer use, most of the people I talked
to found it to be a wonderful service and relatively efficient.
There were a few complaints about slow loading on some sites
and the inefficient way that customers had to enter their bank numbers but other
than that, most were happy with the service.
Canadian banks are doing so well at online banking that the
Canadian Imperial Bank of Commerce, Canada's second largest bank is getting
involved in U.S. retail banking. Tim Clark of CNET News.com reported that
preliminary approval had been given in July for CIBC to set up an Internet bank
that will offer financial services electronically and through kiosks in Florida
Winn-Dixie grocery stores.
Clark reported that the supermarket kiosks will give CIBC a
cheaper way to move into the U.S. market, saving on real estate and staff.
Customers are going to be able to access their accounts online or over the
phone, and the in-store operations will include ATMs.
According to Clark, the Office of the Comptroller of the
Currency analysis of CIBC's application indicates that regulators see the bank
as falling between a traditional branch and a pure-play Internet bank.
Before CIBC can open consumer operations with Winn-Dixie, it
will still have to get the approval of the Federal Deposit Insurance
Corporation, which insures bank deposits, and the Federal Reserve Board.
According to Cox, Cyber Dialogue found that the majority of
Internet users (63 percent) are aware of online banking, and 13 percent intend
to begin banking online within the next 12 months.
In contrast to online banking, it also reported that only 3
percent of investment traders who are online have discontinued online trading
and 85 percent of current traders are satisfied with their service.
Consequently, the number of online traders has grown from 4.0
million in July 1998 to 6.1 million in July 1999.
Below is a book you may find interesting.
Some financial service related site:
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