Online banking grows

CNY Business Journal (1996+), Apr 02, 2004 by Dickinson, Casey J

SYRACUSE - The number of customers who use onlinebanking services has grown substantially in recent years, bankers report. The number of users of KeyBank's Key.com online banking has grown by 8 percent over the past year, says Stephen. Fournier, senior vice president for retail banking in Key's Central New York district. Approximately 40 percent of KeyBank's client base now uses online banking. The bank recently eliminated fees for its 3-year-old, onlinebanking service. The service used to cost $7.50 per month.

Online banking allows customers to handle a wide number of transactions and have instant access to their accounts from any Internet-connected computer. The only type of transaction Key.com doesn't do, Fournier jokingly explains, is take in currency or dispense it through a computer screen.

KeyBank's research has shown that online-banking services help the bank to reduce customer turnover.

"We've found that our customers who bank online are three times less likely to leave," says Fournier.

Online bill-payment is a popular feature for KeyBank customers as well as for those who use other banks' online products.

M&T Bank also reports growth in the online-banking field. While the bank won't disclose specific figures, -online banking is growing for the Buffalo-based bank.

"We're rapidly approaching a majority of our customers banking online," says Robert Leong, M&T Bank's vice president for electronic banking.

M&T customers can process transactions and view paper statement copies online. The bank is adding canceled-check imaging to its site as well, says Leong.

KeyBank recently added the ability for customers to view canceled checks online. The Key.com site allows customers to see the scanned images of their checks instantly, says Fournier. Prior to the addition of the feature, customers could receive check images by filing a request that might take days to fill.

The Key.com site also includes financial calculators to help customers plan for home purchases, college savings, or retirement.

Another feature coming to the M&T online-banking site is the ability to schedule bank transfers for future dates.

"We're going to evolve, enhance, and make online-banking easier," says Leong.

AllianceBank added online imaging of canceled checks to its site last year, says Jennifer Foody, bank officer of marketing for Syracuse-based Alliance Bank. The bank has more than 4,000 customers who use its online services.

While 40 percent of KeyBank's customers are using Key.com for their banking, KeyBank employees use the service at twice that rate, says Fournier. Approximately 86 percent of KeyBank employees in the Central New York district bank online with KeyBank.

Banks are serious about providing securify for customers' online transaction. Each online-banking site uses encryption designed to safeguard banking information from potential thieves. KeyBank conducts regular security audits and annual reviews of the overall security plan to ensure the process is safe.

Online banking is a part of a KeyBank's multi-platform, service-delivery plan including telephone banking and ATMs, as well as traditional branches.

"We're not giving up on branches," says Fournier.