By John Jaser
With all the talk of identity theft and cyber threats, a banker promoting Internet banking might sound a little crazy. After all, roam the Internet are all the hackers – bad ones who trick bank customers into divulging personal information and then sell it to organized crime.
But if we peel back the concerns, we will find a number of false assumptions that could be holding your bank and its customers back from using a carefully protected and highly convenient banking channel.
Here are three reasons why I believe your bank should promote Internet banking:
Identity theft is not an Internet phenomenon. Every day it seems, we receive another invitation to reveal our names, accounts and Social Security numbers. Since the solicitations typically arrive via e-mail, we think it’s an Internet crime. In fact, such phishing invitations can be phoned or snail-mailed just as easily. Internet banking isn’t required.
Going further, Internet banking can help stop the fraud by showing any loss in funds online in real time. Customers who frequently access their accounts online can see every change and compare it against their own records. If they haven’t authorized a particular transaction, it’s right there on the screen.
Internet banking is examined by all the banking regulatory agencies. The Federal Deposit Insurance Corp., Office of Thrift Supervision, National Credit Union Administration and other government regulators alert financial institutions to potential security risks. Compare that with tossing a check into an envelope in your rural-route mail box and waiting for the mailman to pick it up. That’s an invitation for check fraud.
Internet banking saves trees. No matter how you feel about global warming, the green movement is a big deal and your customers want to participate. Your bank can score big green points with its customers through Internet banking because it reduces the overall number of paper statements, bills and checks.
Industry sources estimate that 16.5 million trees would be saved annually if all Americans paid their bills and viewed their bank statements online. By moving your customers to the web, your bank can help reduce paper consumption and the use of energy needed to transport that paper from bank to customer’s home. At the same time, you gain public relations “points” which can help you attract and retain business.
Internet banking saves money. Reducing paper usage isn’t only good for the environment; it’s good for your bottom line. Less paper and postage can have a significant financial impact on your bank. Consider that the average paper statement contains three paper pages and costs 41 cents to mail. A customer receiving e-statements eliminates some of the production and all of the postage cost. That’s real money!
Internet bill pay also reduces your customers’ cost. They no longer have to pay 41 cents in postage for every bill. Banks also save the handling and equipment costs associated with check processing, which varies from bank to bank but certainly adds up. Multiply the costs per check over your overall check payment volume, and you’re looking at a healthy addition to the bank’s bottom line.
Finally, when your customers get used to finding information about your institution online, they will require less staff support on the phone and in branches. That can free up personnel for more lucrative endeavors, such as reducing loan delinquency and selling commercial products.
Security concerns may have discouraged some of your customers from pursuing the Internet banking channel. But a marketing campaign and a well-constructed pitch from a customer service representative who uses and enjoys Internet banking can convince those skittish customers that the Internet is exactly where they should be because of its security, green and cost savings advantages.
Regardless of phishing and spam, your institution should continue to encourage Internet Banking since the benefits far outweigh the risks.s
John Jaser is an Internet security manager at Avon, Conn.-based COCC Inc., (www.cocc.com), a 41-year-old firm specializing in outsourced information technology and support. “Guarding the Gate” is a regular feature in Banking New York focusing on banking technology and security trends.