LEE McLEOD / Special to the Charlotte Observer
Crystal Jones checks her BB&T; bank account online.
|
Competition for online bank customers is getting intense.
Bank of America is handing out magnets at NFL games this month to advertise its free online bill pay. Wachovia launches a new Web site in November. And CharterOne Financials is offering customers "FYI Alerts," notifying them via e-mail, phone or fax when they have a new statement or need to pay a bill.
This marketing urgency is spurred by bank executives who believe online customers - particularly those who pay their bills over the Internet - are better than the average branch user. Bank of America's in-house researchers report that online customers have 35 percent higher balances and call customer service 30 percent less than others.
"They find more answers for themselves," said John Rosenfeld, e-commerce executive at the bank.
The American Bankers Association estimates that 22 million U.S. households are signed up to check their accounts online, and that number is projected to reach 35 million households by 2005. The way banks define who is and who is not an online customer is still debatable. Many simply count how many have signed up to view their accounts online. Others count online users by how often they've logged on or collected data on their account.
Using online banking is pretty simple: A customer goes to a company's Web site and sets up a username and password for his or her account. But researchers believe that a large majority of those people use the accounts only to check their balances and see when checks cleared.
"People often go in and just visit their money," said John Hall, spokesman with the American Bankers Association.
That's how Crystal Jones of Charlotte, N.C., uses her online account at east coast bank BB&T; Corp. She calls herself "anal" when it comes to tracking her money, logging onto her account nearly every day.
"Anything that will make my life easier, I will give it a try," the 29-year-old law-firm employee said. Jones, who pays $3.95 a month for her services, said she has not tried any of the other online services, such as bill pay.
Customers like Jones are what the banks are banking on, literally. Customers who use online banking are more likely to sign up for online bill pay. Once they are using bill pay, they are 70 to 80 percent more likely to remain loyal, said Wells Fargo & Co. internet services executive Jim Smith.
Wells Fargo, which was the first big bank to go online in the mid-1990s, reported that it signed on more than 50,000 online bill payers in July and nearly that many in August. Other banks are also scrambling to sign up those users: Charlotte-based Wachovia executives said that more than 20,000 customers have been signing up for online bill pay each month this summer.
"A lot of customers tell us it's a comfort factor," said Lou Anne Alexander, head of an e-payments team at the bank. "As they get more comfortable with technology and security, they take the next step."
Nearly 12 million U.S. households will pay bills online this year, and that number is expected to grow rapidly, according to Javelin Strategy & Research.
And bill pay isn't all the banks want customers to do from the comfort of their computer chair. They also allow users to transfer funds, apply for a mortgage and view cancelled checks.
For those not familiar with Internet banking lingo, here are few of the more popular services:
• Online banking: Most companies still charge $5 to $7 a month for this service. While analysts say online usage has been slower to catch on than expected, many banks say they've seen a marked increase in people signing on during the past year.
"Clearly more and more people are doing it and finding it easier," said John Hall, spokesman with the American Bankers Association.
Check imaging: Wachovia became the first top-ten bank earlier this year to roll out the ability for customers to view copies of cancelled checks. Customers want check imaging much more than just about anything else online banking has to offer, said researcher Chris Musto at internet consulting firm Gomez.
• Bill payment: Banks believe getting customers to pay their bills online will lead to a more loyal consumer base. Citigroup and Chase Manhattan have offered the service free for some time. Bank of America joined them this year with a marketing blitz to advertise its service.
"Online bill pay is a behavioral change that you don't have with online banking," said Jim Bruene, editor and founder of the Online Banking Report. While using online banking is often just logging on and viewing account activities, using online bill pay often means learning a new system, typing in bill addresses and making sure a bill isn't paid twice.
"Subconsciously, you're thinking is it really that hard to write it on a little piece of paper?" Bruene said.
• Bill presentation: Most popular with credit card companies, such as American Express and Citicard, this is where customers can view and pay their bill online.
The problem from a bank's perspective is not all companies will allow customers to view their bills at a bank's portal. James Van Dyke at Javeline estimates that the average household gets 12 to 18 bills each month but can view only two or three of those at their bank Web site.
Van Dyke said he expects more companies eventually will allow banks to display their bills: "I think we'll start to see some signs of life next year as many large banks roll this out," Van Dyke said. Wells Fargo, which has a goal of presenting 100 percent of bills online, has more than 100,000 bill presentation users.
• Alerts: Cleveland's CharterOne Financial began offering alerts in September. The company notifies customers by phone, fax or e-mail when a bill is due, checks are received and statements arrive.
Sarah Lunday is a reporter for the Charlotte Observer. E-mail her at slunday@charlotteobserver.com.
| 
Help
53
35
