Banishing banking blues

By RICHARD WOOD

No time to get to the bank? Sick of standing in queues? And when you do, you find the tellers are condescending. You've tried phone banking but found it annoying because you never know where you are in the system - and it takes forever.

You're a prime prospect for online banking, the key to which is being able to see your bank transactions in real time. You can pull up balances and statements, make bill payments, transfer money between your accounts, and transfer money to other people.

If you haven't got a computer, this could be the perfect excuse to get one. Okay, it's going to take a lot of saved time and bank fees to justify a $1200-plus new computer, but with help from technical friends, or by picking up an ex-rental, you can have a second-hand Pentium-based machine for around $500 that will be sufficient to get you on the net.

The number of people using internet banking has skyrocketed in the past six months, and is now heading into the mass market. Figures supplied by the banks show more than 600,000 New Zealanders have registered so far. It is catching up, or overtaking, phone banking.

Actually, the banks say phone banking is still growing, but not at the same rate as net banking. However, customers interviewed for this article have unanimously turned away from regular phone banking.

What people love about internet banking is that it is so quick.

to do. Because you see everything about your accounts you are able to make decisions on what to do rapidly and can also see clearly see the results.

You can also do it any time, day or night. The peak net banking usage periods are as you would expect: there is a surge in the morning, at lunchtime, just before leaving work, and at night after dinner.

Of course if you're wary about techos at work looking at your internet browser activity you may want to keep your online banking to your home.

One consumer who did not want to be named said he loved to be able to pull up the transaction history at any time. By checking online regularly he can keep tabs of when his tenants have paid their rent.

"Just last week I was able to get on to a tenant who hadn't paid," he said.

He can also track his wife's shopping by watching her eftpos transactions come up as she wanders around the city. No wonder he doesn't want to be named.

Another plus is that it overcomes the problem of bank statements that end before the end of the month.

If you like to reconcile your account at the end of the month then seeing those most up-to-date transactions is essential.

A great feature, if you are really keen on computers, is to download your transaction details into your Microsoft Money or Quicken software.

The software trains itself to recognise your regular payments and with a bit of filling in the details and adding cash expenses you've got your own computerised accounts in no time.

Now you can analyse and budget properly, but that's a different story.

One of the hot areas of internet banking is paying bills - a chore when done manually. You can set up your payments and send the money on command, or you can set up automatic payments.

Most banks also allow you to send payments to any New Zealand bank account number. Paying tax and sending money overseas are the latest functions in this group of features.

The banks have done little marketing of online banking: word of mouth seems to be working for them so far.

A recent convert, Linda Colthorpe, of Auckland, said it began for her when she couldn't get Telecom's Faxability system to work. So she couldn't get her statements easily by fax. Previously she was an avid phone banker and would order fax statements.

"On the phone you don't want to be on the phone; on the internet you are willing to spend hours," she said.

"It's so much easier. I've only been using internet banking for a short time, but I don't think I'd go back to phone banking.

"I would use it only if I didn't have a computer available."

Colthorpe says you don't really have to be computer literate.

"I'd say to someone new, 'it's just easy, very very easy.' "

She did have a couple of gripes. There is no running balances on her particular bank's screens, and when printed they go off the edge of an ordinary portrait-oriented page.

But it is early days for net banking and these are just the sort of things banks are likely to fix as they get more customer feedback.

What about fees?

Online access is presumably a money saver for the banks compared with your visiting a bricks and mortar branch.

On the other hand the banks will have had, and will continue to have, online development costs.

While you may strike some monthly fees up to $5 a month, the other fees will be similar to your regular banking fees, according to the accounts you have. Making bill payments can be cheaper online. You expect that type of fee to be lower because you are effectively doing some of the work yourself and saving the bank's staff time.

Some banks exist only on the net, such as BankDirect, so for them every customer is a net customer. But for most other banks, the aim is not to convert everyone to this form of managing your money.

In banking terms, it's another "channel" with which to serve your needs. Banks tend to say they will provide whatever combination of "channels" - ATM, phone, branch, internet - you prefer.

However, some banks talk about the potential of online banking to help distinguish their bank from the competition.

It is worth noting that not all banks have all the features described in this article.

But they do have most of them - and will probably add the other functionality as they develop.

The broad aim is to develop a more personalised and responsive relationship with you and therefore keep you coming back to them.

Banks are spending a lot of time and money analysing and identifying how people use their sites and what will encourage people to use it more.

This can only mean more new features as online banking matures - and even less reason to trudge along to the bank.