International Data Corporation (IDC) predicts that sales of Internet banking applications will increase 250% in 1999 when compared with 1998. They further estimate that 7200 U.S. banks and credit unions will purchase those applications. That's a big jump from 1200 banks and credit unions doing the same software in 1998.
IDC says that a number of factors contribute to this coming boom. Intense competition in the banking industry is one of these, coupled with consumer pressure for banks and credit unions to offer online services immediately. While that demand is shooting up, there is a severe shortage of skilled programmers as well as a trend in the industry as a whole to move away from proprietary custom applications and buy things off the shelf.
WALLY'S COMMENT: There's another part of this market that IDC doesn't address. That's the banks and credit unions who are reworking their online banking either to improve an already existing web banking application or to add web banking to an existing online dialup application.
A couple of weeks back, I was in a meeting with a client doing this very thing. The institution's situation was that they had had online banking for several years. When they set things up, they went with the best available package at the time. Now, the CEO said, "They just haven't kept up."
Here's a personal note on this. I'm a user of online banking services which, with my current bank, frankly haven't been up to the standard I'd like. I'm also in the process of moving myself and my business from California to North Carolina. That's led me to take a look at the various services that are available at an array of banks there.
Now there are some aspects of my situation that are unique, but others are common to just about everyone. I'm basically a one-person shop, doing my writing, consulting, and speaking. I spend a good deal of time on the road. I contract with an excellent office services firm to provide the support I need and have some relationships with secretarial services to handle others.
What I found is this. As I look toward how my life will be in my new home, I am considering how I make my world work when I'm moving around as much as I do. Online banking turns out to be a good part of it. If it works.
So what have I found in North Carolina? Out of all the banks that I've looked at, only one stands out for its ability to handle online banking, both for my personal accounts and for my business. In case you're wondering, that's Centura Bank.
They stand out first of all because they offer a broad array of services. Actually, I shouldn't say that. It may be that other banks offer the same services but don't tell me about them quite so neatly on their web site.
Centura offers me a small business banking option as well as a personal banking option built on Intuit's excellent programs, Quicken and Quick Books. Their web site, and the people I've spoken to there, give me lots of information. And in marked contrast to my current banking arrangements, Centura seems to take responsibility for the entire operation, helping me get software, make connections, and so on. With my current bank, many of these arrangements are scattered around through different divisions of the bank and not coordinated. At Centura, at least as it looks from here, the bank is responsible for everything the bank offers.
What's the lesson? Whatever service you're offering, we can learn a couple of lessons from the presentation of online banking.
First, take responsibility for everything you do. Offering me services where, when I call, you merely shunt me to another part of your business, doesn't help me. It frustrates me.
Second, tell your story. If you're talking about online services, especially, make sure your web site tells about how things work, offers demonstrations, etc.
Make it as easy for me as you can. The easier you make it, the more likely I am to buy whatever it is you're selling.
This article originally appeared in Wally Bock's Briefing Memo newsletter in April 1999.
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