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POSTED ON BY Ken Tumin
This article from MSN Money shows that brick-and-mortar banks have been successful in adding online banking. The websites of many of the traditional big banks scored well in research investigating the features that consumers find most important. The only pure online bank on the list is E*Trade. Most of the others, however, just use internet banking as an extra benefit of their local branches. A few of these include Wellsfargo, Citibank, Bank of America, Huntington, First National and US Bank.
The article mentioned some features that hurt pure online banks in competing with the traditional banks. One is making deposits. People don't like the delays of mailing in deposits or depositing money into ATMs. Many online banks have ACH bank-to-bank transfer capability but you'll still need a checking account at a local bank where you can make a deposit if you don't want to use the mail or ATM.
The other issue is ATMs for cash withdrawals. People want wide availability of ATMs and don't want fees. It's hard to compete with giants like Bank of America.
Online banking security is an important issue. Some features to help ease people's fears include automatic notification by email when large sums are withdrawn. Also some online banks provide a service that presents your bills on the banking site. This reduces that chance of paper statements being stolen from the mailbox or trashcan.
Cost is another important feature. The online bill-pay should be free (the article stated 80% online bill-pay accounts are free). Many of the big banks do provide it free but only if certain conditions are met (balances, account activity, etc.)
Some other useful features sited by the article included an archive of scanned images of canceled checks, capability to setup automatic payments, account aggregation to allow managing multiple bank accounts from one site, and email alerts and reminders. Wells Fargo ranked number one partly due to its "My Spending Report" that organizes expenditures into categories.
There was some mention on interest rates on deposit accounts, but not much. Perhaps if people don't have much savings, an extra few percentage points in rates may not be much of a concern. For those who are concerned, it's easy to link the checking account with an online bank like EmigrantDirect where you can get high rates. I think these types of online banks deserve another category. There are the online banks where you do checking type activities. The article was concerned mostly with these types of banks. Then there are the online bank for your savings. Both should have their own top ten list.
The article mentioned some features that hurt pure online banks in competing with the traditional banks. One is making deposits. People don't like the delays of mailing in deposits or depositing money into ATMs. Many online banks have ACH bank-to-bank transfer capability but you'll still need a checking account at a local bank where you can make a deposit if you don't want to use the mail or ATM.
The other issue is ATMs for cash withdrawals. People want wide availability of ATMs and don't want fees. It's hard to compete with giants like Bank of America.
Online banking security is an important issue. Some features to help ease people's fears include automatic notification by email when large sums are withdrawn. Also some online banks provide a service that presents your bills on the banking site. This reduces that chance of paper statements being stolen from the mailbox or trashcan.
Cost is another important feature. The online bill-pay should be free (the article stated 80% online bill-pay accounts are free). Many of the big banks do provide it free but only if certain conditions are met (balances, account activity, etc.)
Some other useful features sited by the article included an archive of scanned images of canceled checks, capability to setup automatic payments, account aggregation to allow managing multiple bank accounts from one site, and email alerts and reminders. Wells Fargo ranked number one partly due to its "My Spending Report" that organizes expenditures into categories.
There was some mention on interest rates on deposit accounts, but not much. Perhaps if people don't have much savings, an extra few percentage points in rates may not be much of a concern. For those who are concerned, it's easy to link the checking account with an online bank like EmigrantDirect where you can get high rates. I think these types of online banks deserve another category. There are the online banks where you do checking type activities. The article was concerned mostly with these types of banks. Then there are the online bank for your savings. Both should have their own top ten list.
