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Online banking across the world

By dreamfish in Technology
Thu Nov 02, 2000 at 09:16:27 AM EST
Tags: Technology (all tags)
Technology

Here in the UK online banking has taken off in a big way. Every major bank has an online division and there are even a number of virtual banks (i.e. those that only exist on the Internet). I would be interested to know how other countries have embraced online banking, especially the US given my experiences when visiting there.


During the autumn I spent a month in Madison, WI with friends and was struck by how much the richest and most technologically advanced country in the world is still wedded to cash. In a number of stores I seemed to be the only one using plastic!

As I use an Internet bank I was able to keep track of my finances and sort out bills 3000 miles from home. This surprised and intrigued my hosts who knew nothing about banking online. What interested me most was how practically all US banks are local, national banks only used by rich people and businesses my friends told me. Not only that but electronic inter-bank transfers were a nightmare, they claimed, and you would be better off taking the money out in cash and physically paying in at the other institution. I suppose this explains the rise in popularity of internet payment schemes like PayPal.

Is the above recognisable or just true for the Mid West? ;)

(As an aside my friend owed me $400 but wouldn't be able to pay it back until after I'd left. I suggested doing an international bank transfer through SWIFT (Standard Worldwide Interbank Financial Transfer). He gave me an unimpressed look and said "I think I'll just post you the cash".)

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Poll
Your opinion of e-banking?
o I use it regularly. 51%
o It's an interesting curiosity 7%
o Don't trust it 8%
o I'm waiting for e-cash/micropayments 17%
o Money is the root of all evil 13%

Votes: 79
Results | Other Polls

Related Links
o virtual
o Internet bank
o PayPal
o SWIFT
o Also by dreamfish


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Online banking across the world | 15 comments (15 topical, editorial, 0 hidden)
You're going to what me the cash? (3.40 / 5) (#1)
by duxup on Thu Nov 02, 2000 at 05:27:39 AM EST

He said "post you the cash" and he's from the Midwest? I found that a bit odd.

I've lived in Midwest the almost all my life and with the exception of carrying some for emergencies I haven't used cash primarily since I got my first job and that was nearly a decade ago.

For interbank xfers, I do not do that much at all. I guess it's just never occurred to me. The banks I've used never really encourage it and services like PayPal are just as easy to use in my opinion.

As for bill payment that's a different story. Few vendors make bill payment easy in my opinion. First for several services I use you have to actually still receive the bill in the mail before you can have a clue how much to pay them, to me this is moronic. Heck just an e-mail telling me would be good enough to me. So really by the time I get it in the mail, there's no reason for me to bother paying online since I've got the paper and everything right there.

Online banking/payment (4.00 / 1) (#8)
by suture on Thu Nov 02, 2000 at 10:31:31 AM EST

I agree that most US banks don't make money transfers easy at all. Of course, even when you go into the branch, still not something they have a good knowledge of. So that option is out, but I do use online billpay/checking. Paypal is great, except when they have server problems and you can't get in to send money for 15 hours or more, or when they accidently double bill you. Luckily that doesn't happen very often, and is usualy correctable in some manner.

I haven't quite switched over completely. I tend to wait, get my paper bill, then at 3 am or whenever I remember, log on, add their address to the file, and send an e-check or pay electronically if their website is so enabled. Some of the companies offer email bills, but I just feel that's too risky. I may forget to pay if I don't get the email due to a server glitch or something.

As for the midwest comments, it does seem like some of the areas that way don't deal with the internet as much as say, Atlanta GA or Boston Mass..but as with anything else, depends on the area.


Eagle
A person reveals his character by nothing so clearly as the joke he resents. - G. C. Lichtenberg
[ Parent ]
Unusual Experience (4.00 / 2) (#2)
by acestus on Thu Nov 02, 2000 at 07:11:42 AM EST

My city-boy attitude wants me to make a comment about the Northwest being a little backwards, but I know that's not true, so I won't even mention it.

I've lived in a few different parts of the Northeast, and online banking is Big. I lived in Boston, the center of the US's second largest bank, and they had it, of course. When I moved back to my hometown, though, I found that even my tiny little local bank (about six branches, total) has online banking. I despise carrying cash, and only carry it if I know I'm going somewhere that won't take my debit card, which is rare these days.

That said, we Americans are a little behind. Bank xfers are pretty costly ($18, I believe, to transfer funds most places) and smartcards are just now starting to be available -- and they're only available from a few banks.

Anyway, at the very least, I'd say that you're not doing yourself a favor to judge the US' level of banking technology by Madison, WI.

Acestus
This is not an exit.
Re: Smart Cards (3.00 / 1) (#4)
by Refrag on Thu Nov 02, 2000 at 09:02:09 AM EST

Thank goodness that smart cards aren't very prevalent in the US. I think it has been demonstrated to be too easily hackable over there in Europe. Anytime that you have consumers carrying around cards with logic in them they can hack it to their advantage.

Refrag

Kuro5hin: ...and culture, from the trenches
[ Parent ]

Smart cards? (none / 0) (#9)
by molo on Thu Nov 02, 2000 at 11:34:53 AM EST

Can someone tell me what the deal is with smart cards? What does it do for me? Why would I want a microprocessor on a credit card? The TV commercials seem like a bunch of hype with no meat to them. What are the benefits / drawback of 'smart' cards?

Sorry if I've been in a cave for a while, I know these things are immensely popular in Europe, but I have no clue why.

- another ignorant american

--
Whenever you walk by a computer and see someone using pico, be kind. Pause for a second and remind yourself that: "There, but for the grace of God, go I." -- Harley Hahn
[ Parent ]

Modernization of Banking Act (I think?) (3.00 / 2) (#3)
by Refrag on Thu Nov 02, 2000 at 08:51:52 AM EST

We just passed a Modernization of Banking Act not too long ago that gives banks new authorities. Many of their restraints for intrastate banking have now been lifted which is what gave Bank of America the go ahead to start working on a coast-to-coast bank. Banks are now also able to dabble in other financial areas that they were previous forbaid to enter. However, the two banks with headquarters in my town offer online banking. First Union's online banking appears to be better than Bank of America's is (I can't pay my mortgage online even though I have a BoA Checking account and they hold my mortgage). Wachovia which is just a hop, skip, and a jump away founded the first Internet bank in the US a while back, but I'm not sure what happened to it.

Refrag

Kuro5hin: ...and culture, from the trenches

Privacy (4.00 / 5) (#5)
by Kaa on Thu Nov 02, 2000 at 09:37:49 AM EST

May I point out that cash is anonymous and untraceable (in small bills/amounts). In my book this is a big advantage.

Note that the bank (your credit/debit card issuer) owns the records of your purchases. It can do anything it wants with them.

If I have a complete record of your purchases over, say, last several months, I can build a very, very complete picture of who you are, what do you do, what do you like, etc.etc. In the best case this info will be used for marketing. In the worst case it will be used to put pressure on you if need arises. There are already actual cases, for example, a guy's purchases of liquor at a supermarket were used to attack his credibility in some court case.

I would be quite uncomforable with other people who clearly do NOT have my best interests at heart having access to a very complete description of my life. What about you?

Kaa
Kaa's Law: In any sufficiently large group of people most are idiots.


Mobile Banking... (2.50 / 4) (#6)
by bscanl on Thu Nov 02, 2000 at 10:07:42 AM EST

...and of course, nowadays in Europe, the Internet means more than just mp3z and a load of dodgy E-commerce loss making companys - We've got the internet on our WAP mobiles too. Aside from Email, being able to check my Current account and Credit Card balance from my mobile doth rule. Gimmicky, but reasonably secure, and handy.

Mobile Banking (2.66 / 3) (#7)
by dabadab on Thu Nov 02, 2000 at 10:25:48 AM EST

Not that you would need WAP for that - for example, I get an SMS whenever my account is charged so I can notice it really fast if it is stolen :)
--
Real life is overrated.
[ Parent ]
My experience (3.00 / 1) (#10)
by Philipp on Thu Nov 02, 2000 at 06:06:59 PM EST

Funny that you write this story today. I just closed my (US) brick-and-mortar bank account and now I only have an account at an internet bank.

The advantages? They pay pretty high interest rates 3% on checking, 6% on money market, and basically no fees.

The disadvantages? As always with banks it comes down to teller machine usage. Where I am currently (Los Angeles), most ATMs charge pretty high fees ($1-$2) for each transaction, but there are also non-surcharge ATMS, and you can get cach from grocery stores. For my situation, it's no problem at all. The only problem I have is that I cannot deposit cash, only checks. There are ways around this, though.

When you mention difficulties with money transfers in the US, you are right. It's really funny how much US banking still relies on hand-written checks that are mailed around. (When I was in Germany I did not write a check for the last 8 years, I guess your experience is similar) Electronic transfers are slowly coming, but even setting up direct deposit of your pay check is a major drama. So, you'll get to write many checks for you gas bill, local phone bill, long distance phone bill, power bill, cell phone bill, rent, etc. etc. each month.

alias kn 'killall -9 netscape-communicator'

Re: My experience (none / 0) (#11)
by dreamfish on Thu Nov 02, 2000 at 06:13:07 PM EST

Two other little bits of triva:

1) some months ago there was an outcry in the UK about ATM charges, especially where some banks were charging 'disloyalty fees' for customers using machines on other networks. Now all potential charges must be displayed on the ATM before the transaction (and a number of banks have backed down over disloyalty fees).
2) I noticed in the US you sign the back of cheques before paying them in. We don't ;)

[ Parent ]

Poll Question (none / 0) (#12)
by titivillus on Fri Nov 03, 2000 at 04:36:58 PM EST

Money isn't the root of all evil. The love of money is the root of all evil.

I'm not trying to be too anal about this, but I think it should be said somewhere. There was a philosopher (and monk, IIRC -- this was from another life) who felt that, even if God didn't exist, the 10 Commandments would still be a good idea for building a society on, because you start with the obvious (Killing, Stealing and Lying are all fairly obviously bad, and if you can't trust your neighbor not to take your wife or your car, you're in bad shape anyway), but the more controvertial ones, such as having no Gods before him and such, you're much less likely going to put your wants and desires above those of everyone else around you, and thus more likely to treat others fairly and less likely to Rambus them. Interesting idea, I think.

But this is where we go when we get into pedantry. All I wanted to do was fix a quote. Carry on, people, and let this be a lesson to you.



Online banking... (3.00 / 2) (#13)
by Miniluv on Fri Nov 03, 2000 at 05:53:19 PM EST

Online banking just isn't taking off in the US because people don't use it. They claim to be interested, enough people tell the bank they want it, and a bank puts a program in place that virtually nobody uses.

I spent 6 months working on a project that supported 6 major US financial institutions and their online banking, BofA being the largest customer, and one of the largest banking chains in America. They still had under 10% of their customer base using it with any regularity. The feature set they offered wasn't spectacular, but it was pretty decent, especially for the time when they were offering it.

As for the online banks, we had one of those on the project too, Wingspan to be exact. They had a kick ass system, well run on the back-end, pretty functional on the front end...they just couldn't make any money at it. Nobody wanted an online only bank, they just didn't trust the phenomena. The amusing part is that their worries were a self-fulfilling prophecy...nobody signed up, so the bank is up on the auction block from First USA.

I have a brick'n'mortar bank, nice little local place with only 5 branches. They have online banking, I use it regularly to transfer funds between accounts, keep track of what checks have cleared, etc. Then again, I'm also a geek, so it's more likely for me to use these features. My mom, who works with technology every day, doesn't use the features, she's been banking the same way for 30 years, and I can understand her desire not to change. She doesn't feel it'll save her any time...and at this point in the online offering world, she's probably right.

The banks, imho, need to take the first big step and make some truly great offers as far as features provided before people will start using it...yeah, it might be a losing money proposition at first, but as people come around to the idea it'll pay off in the end. THe big banks are the only ones who can afford to go first, but as they suceed the smaller banks will have to follow as people demand said feature sets.


"Its like someone opened my mouth and stuck a fistful of herbs in it." - Tamio Kageyama, Iron Chef 'Battle Eggplant'

Re: Online banking... (none / 0) (#14)
by dreamfish on Fri Nov 03, 2000 at 06:33:31 PM EST

The banks, imho, need to take the first big step and make some truly great offers as far as features provided before people will start using it.

The bank I mentioned, smile, offers 4.85% interest and an automatic 500 fee-free overdraft on its current (checking) account to appeal to those who are either wary of internet banks or aren't so wowed by the idea of a virtual bank as a geek would be ;)

[ Parent ]

Is the US occasionally more conservative? (none / 0) (#15)
by jonmarsh on Thu Nov 09, 2000 at 05:43:33 PM EST

In some ways I'm surprised that it hasn't taken off in the States because internet banking seemed to start there first. When I moved to California in '97 my bank had free internet access and a friend of mine was told that he would be charged on his account every time he visited his bricks and mortar outlet. When I moved back to the UK in '97 Natwest actually wanted to charge me 30 to use internet banking - i.e. they wanted to charge me to save them staff wages! It was only in '99 that they developed a clue and made it free. But in some ways I am not surprised that internet banking hasn't taken off. Direct debits (paying bills directly from your account) and debit cards were seemed to be just starting in the states in '97 despite being very popular in the UK at that time. I think we have come to expect the States to lead the way in all technology areas and are suprised when they are not. (mobile phones is another area when they lag behind Europe).

Online banking across the world | 15 comments (15 topical, 0 editorial, 0 hidden)
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