Online Banking: Are You Ready? - Page 2 of 6

Online Banking: Are You Ready?

are more likely to bank online.

“We are later getting broadband, and we are less likely to use the Net for e-commerce. And we are underbanked as it compares to non-minorities,” says Irving. “Major factors are race and class. Increasingly, [online banking and e-commerce] are occurring during working hours and in the office where many people have daytime access to the Net. We are still disproportionately in jobs where, during the day, we may not have access to the Internet.”

Irving acknowledges that not all African Americans are behind the curve when it comes to reaping the benefits of online banking. “A lot of black folks are whizzing through this, particularly those who are college educated and have medium to high incomes.”

Vanessa has been using computers since college and is not intimidated by new technology. She loves having the power to check her account balance at her fingertips and having the ability to identify and report fraudulent charges to her financial institution before her monthly bank statement arrives in the mail. Online banking can also cut down on late fees because you can pay bills almost instantly.

Ultimately, Vanessa won in the money management disagreement with her husband: they’ve agreed to let her take over the bill paying. Cyril says he trusts Vanessa, though online banking isn’t his forte: “I’ll never feel comfortable online. Maybe I’m just old fashioned. She says she knows what she’s doing.”

Vanessa checks their online bank account regularly. Every two weeks, she spends about 15 minutes paying the bills. Doing it the old way—with pen, checkbook, envelopes, and stamps—often took 45 minutes or more. Now she pays all their monthly bills through an account she set up with Baltimore-based M&T Bank. She even pays one-time bills, such as a medical invoice, online. “It’s fast and efficient,” Vanessa says. “I don’t have the fear some people have.”

For most people, that fear is of identity theft. According to a study released last year by Forrester Research, 71% of online shoppers who don’t bank online cite security and privacy concerns as the reason for their resistance. Other fears, habits, and misconceptions cited in the study include the following:

  • Many said they were content driving to a bank branch or using phones and ATMs and see no reason to add online banking to their repertoire.
  • Others said they didn’t think their financial institution offered electronic banking services. (Actually, of the country’s 9,000 banks, about 6,800 have Websites. And 80% of those Websites offer online banking services to their customers.)
  • Some said they just haven’t gotten around to banking online or that it seems too complicated.

Banks and credit unions are working hard to entice their customers to bank online through advertisements, letters, and e-mails, and most banks offer the service free of charge.

Moving their customers toward electronic banking makes good business sense for banks. Most have used automated electronic systems for years; it was only the customer who kept paper copies of their account information. It costs more for banks to produce paper copies than it