With the Internet knocking on their doors, traditional banks are being
pressurised to adapt to new technology or stand aside and watch as more
innovative players enter the highly lucrative banking game. Security First
Network Bank (SFNB) is one a new breed of banks who avoid face to face contact
with their customers by transacting over the Internet. Fully approved, insured
and with an asset value of US$ 41 million, SFNB is likely to be a tough act to
follow for banks still expecting their customers to walk through the door.
Electronic transfers have transformed banks from being a safe place to keep
your money, to one of the most information intense industries that we deal
with in our daily lives. SFNB uses the Internet to move banking from branches
to the world wide web. Clients can use their browsers to login securely to the
banks’ computers to pay accounts, transfer money, get up to the minute
statements and even view digital images of cheques that have cleared.
Deposits, always an online banking dilemma are handled by direct deposits or
wire transfers from any other account.
While more than 200 banks are now offering an online service, SFNB was the
first truly branchless bank. Strangely enough their next addition will not be
another web server but rather a physical branch. Following the success of
their online bank they are now opening city offices. The first is opening on
January 30th is in Atlanta, Georgia. "We see our City Offices as a hybrid
banking solution that blends the best aspects of a physical presence with all
of the convenience and power of Internet banking," said James S. Chip" Mahan,
III, SFNB chief executive officer. "We are bringing the technology to our
customers in yet another way, a natural step in the further development and
delivery of online banking." The physical SFNB branches are intended to
compliment the online service. Although it is easy to open an account online,
the branches will offer that human touch for those customers who aren’t yet
familiar with the online world. Staff will assist customers by showing them
how to use the online banking system.
SFNB have placed major emphasis on security to get approval from the office
for thrift supervision (OTS) which is the banking regulatory body in the
United States. Their security emphasis also helps to put customers minds at
rest when transacting over the internet. After their first year of trading the
bank concludes that the internet provides an even safer environment for
banking than the real world. The internet community is to a certain extent
self policing with customers suggesting better ways of operating to avoid
fraud.
SFNB offers an extremely interactive service which allows customers most of
the functionality of Intuits Quicken package or Microsoft Money. The
difference being you don’t need to go out and spend money on software. All you
need is a web browser and a connection to the internet.
STOP PRESS : The ABSA group recently announced that their online banking
service was available and signed up more than 100 users in the following week.
Not being an ABSA customer myself I asked a computer geek friend of mine, an
ABSA client himself, what he thought of the service. “Signing up was extremely
easy,” he said, “but there is no service. I seem to be have been added to a
mailing list and they promised to keep me informed. I couldn’t even do basic
things like transfer money.” It seems that we may have to wait before we can
say that South Africa has a working online bank.