Remote banking winning converts after initial missteps

[Reuter/Thomas Witom]

CHICAGO, June 7 (Reuter) - Sitting in front of the home
computer, touch-tone phone in hand, an American householder can
check his bank balance, transfer money between accounts, pay a
few bills and even buy a shares in a mutual fund.
After many false starts going back to the early 1980s, home
banking is finally ready to take off in the United States.
``It's for real this time,'' said Glenn Santmire, senior
vice-president for remote banking at MasterCard International.
``The technology is right, consumers are ripe and a lot of
infrastructure has been put in place.''
Santmire said early software was too cumbersome, hardware
devices too expensive and consumers generally gun-shy about
making the switch from traditional banking.
``In the past, banks have spent much of their time talking
about the technology. Well, it's here, and the real issue is how
to reach consumers and make the technology work for them,''
Santmire said.
Consumers have become more accustomed to the wiles of
automatic teller machines, and average use is six or seven times
a month. Payroll direct-deposits have increased to 35 percent
from just 4 percent in 1986. And about 33 percent of U.S.
households have personal computers.
``In the past, acquiring money was a priority for consumers.
The 1990s is a period where they are trying to hold onto and
better manage their money,'' Santmire said.
Remote banking allows a home consumer, using a touch-tone
telephone with or without a screen or modem-equipped PC, to
perform many functions normally done at a bank.
These range from reviewing balances to credit card
outstandings and transferring funds to savings from checking or
paying off a loan or a utility bill.
Despite the inroads, electronic banking has some drawbacks.
James Shutz, Chicago Corp vice-president and bank securities
analyst, points out a big constraint -- ``people's desire for
cash.''
``The proliferation of online (computer) services such as
Prodigy and America Online permits a person to conduct some
banking chores at home. But to get one's hands on cash means a
trip to the ATM or branch,'' Schutz said.
Nevertheless, Santmire said MasterCard expects remote
banking to witness ``a genuine takeoff in 1995.'' By 2000, he
believes, most U.S. consumers will be banking remotely ``in one
form or another.''
MasterCard itself is aggressively pursuing partnerships with
PC, screen and interactive television providers. ``We have
several (deals) in the wings right now, and you'll see some
major announcements coming in terms of software and access
device providers.''
Shutz said banks and branches will never go out of style,
noting, ``You need face-to-face contact to set up a trust.'' But
he too predicted increased use of remote banking over the next
10 years.