Online, mobile and P2P are just the start
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People have been slow to make the switch to electronic statements, so banks sometimes offer incentives. Central Pacific explained to customers that digital statements are good for the environment and, in 2009, pledged to plant a tree for every customer who switched. It ended up planting 7,500 trees.
More can be done once online banking moves from 1.0 to 2.0, says Bruene.
"The next phase is figuring it out for you," he says, noting there could be systems that analyze what you've spent over the past year and project that you're going to run low on cash this month. Instead of statements that just list bills and amounts, there could be pictures of the items purchased.
"The banking systems are on the verge of creating more intelligence around your information. That's kind of happening right now."
Already, third-party sites such as Mint.com help by aggregating financial accounts, automatically categorizing transactions and helping with budgets. There are offerings that help people save money through text messages, and others that tie in all types of accounts, including travel-reward programs and accounts from multiple banks, into a single site.
Some local banks allow customers, for instance, to pay Macy's or HECO bills from their online accounts.
Bank of Hawaii's e-Bankoh bill costs customers $5.95 a month (fee waived for certain types of customers), but allows them to send payments electronically to almost any person or business in the country. It also allows merchants to send bills to accounts from which recurring payments can be scheduled.
American Savings, Hawaii National, Central Pacific, Territorial Savings and First Hawaiian also offer the online bill-payment and management service.
Online banking allows smaller banks to service customers in areas where they don't have branches.
"It allows a couple of things," says Bob Costa, VP of administration for Territorial Savings, the state's fifth-largest financial institution. "It's available 24/7. It allows the bank to reach a greater portion of the population."
Moreover, it may help retain customers if a bank closes a branch. At a Federal Deposit Insurance Corp. meeting this year, one Washington-state banker noted that the only customers it lost when it closed a branch were those who didn't have online accounts.
Territorial doesn't have a mobile product, but is exploring options. One attraction is the cost savings. Costa says handling a transaction through a teller can cost the bank 10 times what an online transaction costs.
Central Pacific's Isono notes another benefit for banks: Customers who use their free bill-payment service will likely have more in their accounts than they need to pay the bills.
A big selling point for the banks is lower costs in the long term, Bruene says, but a bigger reason for mobile services now is making sure competitors don't steal customers.
"There's some hope in banking circles that maybe there are going to be lower costs," he says. "Branches haven't closed and you've just added more expense for online and mobile banking. It's actually increased the cost for the most part."
But, in the long run, he says, the technology may produce lower costs through fewer branches, smaller branches or fewer staff. "It's a little bit cliché, but if you look at your kids, they don't go into branches."
However, all the local banks agree that branches remain an important part of operations. If branches weren't important, Internet banks would have made greater inroads here, they say.
"It's a people business and I think that's what we do best," says Darrick Ching, a Bank of Hawaii executive VP and Hawaii Branch Division manager. He says transaction counts in branches have dipped slightly over the past few years, but he does not believe it's a trend.
Most people still come in to talk to a banker if they have problems and want face-to-face meetings if they are applying for loans, he says.
That may mean more specialists, such as investment consultants, will be located in some branches to help deliver services, while more branches are opened within grocery stores.
Harrison says First Hawaiian wants to do whatever will help customers.
"Oftentimes it helps to sit down and talk to somebody first to see what options work best for your own individual situation," says Harrison. "I don't think anyone's managed that online branchless technology yet. I think a lot of that's due to understanding what a customer wants or needs."
The number of customers who access their bank accounts with mobile phones will grow more than fivefold from 2009 to 2013, to 53 million people, predicts a study by the TowerGroup.
The study says mobile customers appear to be highly desirable bank customers with higher balances, longer tenure and more use of bank products and services than average customers.
Fraud losses might fall by a double-digit percentage for these customers, the TowerGroup says, because they would be more likely to spot questionable transactions than customers dependent on monthly statements.
Another bonus: TowerGroup predicts mobile-banking customers – with their anytime, everywhere access – will make fewer calls to customer-service centers. Those calls, TowerGroup notes, cost banks an average of $4 each.
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