Banks offering online services are switching from direct dial-up access to the Internet, according to a new survey by research firm Mentis Corporation.
The survey, "Remote Electronic Banking," found that 93 percent of banks that offered online banking in 1997 had direct-dial access. This year, however, fewer than half of banks planning to implement online banking will offer direct-dial, while 90 percent are planning to offer banking via the Net.
"This shift in focus on access methods reflects the fact that banks are aware of the rapidly increasing interest in the Internet by consumers," Kim Collins, co-project manager of the Remote Electronic Banking research program, said in a statement. "Banks are hoping to capitalize on this trend by making their offerings accessible over the Web. Banks hope that while surfing the Web, customers will check out the bank's Web site and what it has to offer and begin making transactions via the channel."
Banks have long been looking to the Web to help them reach customers through a universal online platform. Similar to automatic cash machines, computers allow customers to bank without taking up expensive bank teller time.
Banks have approached the Internet slowly, however, as customers become more secure with online financial transactions and business models regarding online banking take shape. Other financial institutions also have broadened their online offerings, including brokerage firms such as Charles Schwab.
In addition to indicating that banks are moving to the Web, the survey, in which 2,000 banks were polled, also explored banks' use of financial software. The survey found that although banks tend to favor proprietary technology, they are offering customers multiple products for keeping track of their finances.
Mentis predicts that 70 percent of banks will offer a proprietary product by the end of 1998; roughly one-third will offer Microsoft Money and/or Intuit's Quicken; and about one of every ten banks will use MECA's Managing Your Money.
"Banks like proprietary products because they are able to build brand awareness through increased exposure," Collins said. "However, banks also recognize that there are many consumers already using personal financial management software products, and that by offering access to the bank via these products they can encourage more of their customers to use their PC/Web banking, reduce attrition, and appeal to new customers."
With the trend toward self-service, the survey found banks that plan to offer online banking programs in 1998 also will have other self-service options, such as telephone bill payment, automated bank-by-phone for account inquiries and transactions, and self-serve kiosks in off-branch locations.