Online Banking: Are You Ready?

Taking the leap is as easy as point, click, and save

When Vanessa and Cyril Bright married last year, they merged their banking styles. For the newlyweds, it was a matter of old meeting new. Vanessa is a self-described online banking whiz. Her hubby prefers to pay his bills in person and in cash.

For Vanessa, the convenience of managing money and paying bills using the Internet makes it all worth it. It means not having to lick envelopes and buy stamps because everything is done online. Cyril doesn’t trust electronic banking with his hard-earned money and often drives to the store where he bought an item to pay the bill in person and walk out with a receipt.

Vanessa, 38, says she is savvy enough to recognize fake e-mails from scammers trying to trick her into divulging personal and financial information. Cyril, 41, had his identity stolen years ago and thinks putting his account information on a computer is a risky move.

The Brights, who live outside of Washington, D.C. in suburban Maryland illustrate the divide that exists in the black community when it comes to banking via the Internet. Larry Irving is an expert on the digital divide. He’s president of Irving Information Group in Washington, D.C., and former senior adviser to President Clinton on telecommunications and Internet initiatives. He says African Americans like Vanessa make up a small percentage of the 53 million Americans who bank online.

African Americans who are fearful of mixing their finances with the World Wide Web are being left behind by those who have embraced the technology and convenience of online banking. Those enjoying the opportunity to check their account balances 24 hours a day, view their account activity and history no matter where they are, transfer money instantly, reorder checks electronically, and perform other banking functions from home without picking up the telephone, say there’s no reason to continue sitting on the fence.

On a typical day, 13 million Americans are banking online, an increase of 58% from 2002, according to a study released this year by the Pew Internet & American Life Project. Irving suspects that only a small segment of that number are African Americans. “We, historically, have been less trusting, particularly with our finances as it relates to electronics. Generally speaking, people of color have wanted to see their money and hold their money. And they’ve been less trusting that they won’t get ripped off,” says Irving. “A lot of times, we don’t want people to have that much information about us. We don’t want to be caught in the databases of institutions that we, historically, haven’t trusted and that have not always done right by us.”

It’s not surprising that African Americans are more wary of banking electronically than other consumers. We are the group least likely to buy online, according to a study by Cambridge, Massachusetts-based Forrester Research. In addition, according to research conducted by Pew Internet & American Life Project, people with higher incomes who have been using the Internet for six years or more and who have broadband Internet connections

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