Future Banking: Online, Down Home
Corrections or additions?
These articles by Melinda Sherwood and Patrick J. Walsh were published in U.S. 1 Newspaper on August 25,
1999.
Future Banking: Summit Bank
@BIG LETTER = Internet-driven banking services like online bill
payment
and presentment are changing the way many customers do banking, and
for the mega-banks it is quickly becoming the holy grail. But should
every bank make E-commerce the No. 1 priority of its strategic
planning?
Peter Halstead, executive vice president of Summit Bank,
believes
that technology-driven banking may not be as much of an imperative
for mid-size and community banks. “There are banks that give that
service, and that’s laudable,” he says. “But they don’t have
the personal touch to deliver it on the ground level, because they
don’t have somebody there. They offer the generic services, and try
to get to you by mail, but they don’t know you.”
On that basis alone, Summit — despite its name — is not trying
to be the king of the mountain. “We’re in the middle,” says
Halstead. “We’re trying to reach down and cater to the people
below, and reach up to where the big banks do well. We have to put
our energies and our time into what our customers are asking for.
We want to deliver services anyway the client wants it. You want to
walk down to the branch, fine. Do you have a telephone? We’ll do
telephone
banking. Do you have a PC? We’ll do PC banking.”
And that may be exactly what Halstead envisions as the “The 21st
Century Bank: The Proper Partner in Every Trade,” a topic on which
he speaks Thursday, September 2, at the Doral Forrestal at 11:30 a.m.
The meeting is part of the Princeton Chamber’s general membership
meeting, and will coincide with the Chamber’s Business Trade Fair
and U.S. 1 Technology Showcase, also at the Forrestal between 11 a.m.
and 5 p.m. Call 609-520-1776 to make $28 luncheon reservations. See
the registration form on page 4 of this issue to reserve a free seat
at the U.S. 1 Technology Seminar, which begins at 4 p.m.
This is Halstead’s 28th year working for Summit Bank. He has a BS
in economics and finance from Colgate, Class of 1964, and spent his
first five years at First National Bank of Princeton.
Summit Bank already offers an array of Web-based services for
businesses
and personal bankers, such as cash management over the Internet and
wire transfers using the PC. Web-based bill payment service is
available
to personal bankers for free. Businesses, however, must pay a $100
set-up fee, plus a minimum of $10 a month to use the WEBConnect
service,
which allows direct deposits, stop payments, and any other kind of
transaction. (See page 9 for the story on Paytrust.Com, an Internet
bill paying service and additional comparisons of online banking
charges.)
“The real issue is to be able to send all invoices out over the
Internet, and get all the payments the same way, and we’re moving
towards doing that,” says Halstead. Bill presentment is still
a year or so down the road, says Halstead, but that’s O.K. for
Summit’s
clientele. “Use of the Internet is still modest among mid-market
business,” he says. “The big corporations have a huge
potential
savings there, and maybe sometime we’ll be catering to that area.”
If the customers eventually do want it all, how will Summit keep up
with bigger banks that already have all the online bells and whistles?
It doesn’t have to, says Halstead, because it has something that those
banks do not: character. “They loved us when we were a $500
million
bank,” says Halstead, “but when we were a $34 billion bank,
there were people who would do without with the `services’ just to
shake the president’s hand. We’re trying to reach down and get some
of the old market that we came from,” i.e the community banks
that were merged into the larger organization.
“We’re trying to keep up with the technology and make cautious
decisions,” he says. “It could be that these big corporations
may want it but they may not buy it from us anyway.
“When this all shakes out,” says Halstead, “there are
going to be a lot of clients that are going to go to a small local
bank. A lot of banks will spend money and three years from now it
will end up being overspending. E-Commerce will be a big issue for
everyone, but hopefully we’re doing it at the right pace.”
Top Of PageFuture Banking: Online, Down Home
by Patrick J. Walsh
It’s likely that your employees use online tools
to help them manage their personal finances. They would undoubtedly
welcome the flexibility of tracking their employer-sponsored savings
or retirement plan assets online whenever and wherever it’s convenient
for them.
Employers increasingly are using intranet or Internet websites to
allow employees to access their employer-sponsored savings and
retirement
accounts and other benefits programs. Merrill Lynch’s 10th annual
survey of employers and benefits managers, conducted in 1998, found
that 15 percent of companies use intranet or Internet websites for
this reason, a figure that has almost doubled in the last two years.
Here are a number of ways companies are using their websites to
provide
access to their 401 (k) plan or other retirement plan, automatic
saving
plan, employee stock ownership plan, stock option program, and health
or flexible spending accounts:
Enrollment. A good way to increase participation is tomake the process easy. You can use your website to allow employeesto enroll in a plan, make changes in their enrollment status, andchoose or change a PIN number.Account management. If you offer a number of differentinvestment options, you can supply information such as descriptionsof mutual funds and performance data, to help employees make specificinvestment choices. Even more valuable, you could offer employeesthe opportunity to transfer funds between investment options.Market data. Plan participants who self-direct theirinvestmentsfind current market information helpful when deciding when to makechanges in their portfolios. A useful part of your online capabilitiescould be to supply stock quotes, intra-day market index movementsand news.Financial planning tools. A website is an ideal placeto offer information about overall retirement and financial planning.Your educational section could offer basic information about investingand financial management. With modeling tools, you could allowemployeesto create “what if’ scenarios to help them make goal-baseddecisionsabout their investments, compare mortgages, or consider the impactof loans against their 401 (k) plan.Access to assistance. Even with online access, employeeswill need additional information or help on occasion. Through yourwebsite you might offer the opportunity for employees to submitquestionsvia E-mail, or include a telephone number for employees to call toreach service representatives.Companies are using online access to benefits information tohelp meet a wide range of challenges in their retirement planeducationefforts. CoBank, an international agricultural bank cooperative basedin Englewood, Colorado, that uses Merrill Lynch’s BeneOnLineservice, has 10 domestic and two international sites. They’ve foundthat a central, technology-based source of information is critical.”The ability to access our CoBank 401(k) information through (theservice) has been very positive with our employees,” said CarlaHueckstaedt, CoBank’s technical training manager. “Our employeesare excited about being able to monitor their investments from theiroffice or home.”Providing online access to benefits information for your employeescan ease the demand on your benefits manager or human resourcespersonnel.But online access can’t replace the personal touch. Used inconjunctionwith financial planning and investing seminars or personalconsultations,online access to benefits information can help your employees bettermanage their employer-sponsored saving and retirement plans.Patrick J Walsh is senior vice president and director, GroupEmployee Services, for Merrill Lynch.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
