From ISPs to E-Commerce Online Banks Offer Range of Services

The range of products and services offered by banks via the Internet varies from traditional balance information, to stock trades, to Internet access, according to a recent report.

Microbanker analyzed 50 Internet banking sites to see what kind of products and services they offered online. The report looked at basic banking functionality; bill payment capabilities; special services, such as check ordering and call center integration; and advanced functions such as online loan applications and brokerage. While most financial institutions offered the basics — balance and transaction reporting and bill payment — few offered advanced services, the report found.

“One of the most glaring weaknesses we found in almost all sites is a lack of sales information on the site,” said Nancy Davis, senior analyst and publisher. “We were generally able to learn about the functions of the Internet banking applications, but we rarely learned about the benefits of using Internet banking.”

All of the sites visited by Microbanker provided informational Web pages and basic banking. Most provided institution history and staff information, as well as product information, and deposit and loan interest rates. All provided bank-only email for customers to contact the bank. Every bank provided deposit account transactions data and statements over the Internet. While some showed only checking and savings, most included CDs and money market accounts if they were offered.

Eighty-five percent of the banks offered bill payment (less than half offered it in 1998). Bill presentment is still a developing application, the report found. The information on bill payment provided online varies widely, from those banks that provide nothing, to those that provide well-written FAQs.

Eighty-three percent of the banks gave only access to their sites for free, and charged for bill payment as an added value. Many banks offered a tiered payment structure, rewarding better clients with lower fees, the report found.

Microbanker found that most banks that offered credit cards also provided balance and transaction inquiry for them. More than a third of the banks visited offered the ability to apply for loans online. Few banks offered the ability to actually conduct trades online. Many of the banks with Internet banking sites also operate some type of telephone call center for customer assistance.

Half of the banks in the report provided financial calculators on their site, which not only makes the site easier to use, but contribute to its “stickiness.” (They prevent customers from going to other sites for this capability.) The report found that more banks are providing the ability to order reprinted checks online, with some even providing images of the different designs online.

The report also found that some banks are using their online presence to get away from traditional banking. Microbanker found banks that also function as ISPs, as well as banks that sell their own merchandise. Other banks have taken the portal approach, according to the report, offering customizable sites featuring local weather and stock

Microbanker obtained the information for the report by searching each of the sites. The banks were selected at random.