The New Trend of Online Banking
Picture what our bank looks like today: the brick building, the drive thru window, large vaults, and the counter full of tellers waiting to service their customers. This is the traditional bank that we have all grown up with, the classic brick-and-mortar business model, a fundamentally sound business model that has been successful for hundreds of years. So what has changed with our banks today? Well, the brick-and-mortar model still exists but there is a new trend that all banks are moving towards, the click-and-brick e-business model. On-line banking and electronic bill payment systems are rapidly moving trends that have been adopted by the banking industry within the last two years. It has been the banks number one priority for not only servicing their current customers, but to also attract new customers to their high tech e-business model. It does have a high price tag for implementation, but the market advantage and the cost savings to the bank can potentially be much greater.
The traditional banking model that has been in place for hundreds of years has served well not only to banking customers, but also to banks. It's quite simple: open an account, the bank will provide you with checks, write checks to cover payments, the bill payee cashes the check, and your account is debited. Each month, the bank sends you a bank statement detailing all your deposits, withdrawals, and checks cashed. The world of paper has fulfilled our needs to buy goods and services for many years. But this was the past. Today, the banking industry, like many industries, is looking for ways to cut costs, increase profits, and attract new customers while keeping the existing customers. Banks are merging and purchasing other banks in an effort to get new customers and streamline costs. The major parts of a bank's operating overhead costs are the people it employs to service its customers. After all, somebody has to be there to accept your deposit, process your checks, manage your account, and process your loan application. So what can banks do to reduce this overhead and better manage their business? The answer: on-line banking and electronic bill payment systems, a new e-business model that allows banks to take advantage of the Internet craze while maintaining the traditional brick-and-mortar infrastructure that has successfully serviced their customers for the past one hundred plus years.
On-line banking is actually a very simple concept. Create some type of web interface that a customer can access his or her account twenty-four hours a day, seven days a week. The customer can have full access to account balances, fund transfers, loans, interest rates, and any other type of information that is available from the bank. All this can happen without having to enter the banking facility. Electronic bill payment systems can be accessed from that same web interface so that the bank customer can actually make payments...