State Central Bank a state leader in Internet home banking

Northwestern Financial Review, Aug 22, 1998 by Happe-vonArb, Deb

State Central Bank in Keokuk has been offering home banking through the Internet since November with impressive results. They know of no other community bank in Iowa offering home banking to its customers.

"Other banks have web pages, but our customers have a reason to come back to our site," said Scott Piper, executive vice-president.

State Central's customers come back to www.statecentralbank.com because they can transfer funds, check account balances, apply for loans, pay bills and download transactions.

Piper talked about the benefits of such a service.

"It is a new distribution channel for us just like ATMs, but our competitors cannot piggyback off of our home banking service like they can with the ATMs."

Another major benefit is keeping customers long term. Piper explained that customers can continue to bank with State Central even after moving out of state, because anywhere the Internet can be accessed is where State Central Bank does business.

The community's response to the services has been very positive. The web site gets an average of 14,000 hits per month. But more striking is the home banking numbers: close to 800 users per month. Piper reports there are applications for new users every day.

"State Central wanted to offer Internet banking because of the trend in society toward a rising number of household computers and electronic banking becoming as prevalent as it is," Piper said.

After attending an online conference last summer, bank officials made the decision to go ahead. They chose Jack Henry & Associates Inc. as their web site developer because State Central Bank already uses its banking software. Jack Henry & Associates is based in Monett, Mo., with eight other offices nationwide. Piper said State Central's entire home banking web page expenses, including hardware, were about $50,000.

When setting up the service, security was a major concern, but more important was the customers' perception of security. "It is important to fully describe yourself as a secure environment to the customer," Piper said. To this end, State Central's home banking uses two personal identification numbers (PINs) and a third for additional level of security if the bill payer system is being used. For another safety measure, account numbers are not used to reference accounts. Instead, titles designate accounts and can be customized.

The site offers a demo that goes through steps and demonstrates features of the system and is very userfriendly with helpful pop-up explanations.

According to Piper, a major focus of State Central Bank NetTeller system is letting the business customer see the benefits. Small businesses are great candidates for this service because of the large numbers of checks written. Bills can be paid electronically to those institutions supporting electronic payment.

The bill payer's service also will write and mail checks. There are three choices for paying bills: monthly, bimonthly and one-time payments. Once the system is set up to pay a certain bill monthly, it will be paid with little additional effort.

Businesses and individuals benefit from NetTeller because transactions can be downloaded into popular software packages such as Quicken and Microsoft Money, eliminating timeconsuming data entry. Spread sheets and word processing applications also are able to receive the downloaded information.

The option of applying for loans is one that Piper reports has not had a lot of use. The web page offers bank background information, a rate sheet for services such as certified checks, and locations of ATMs. The web site also links to Keokuk's chamber of commerce.