Electronic banking 2.0

Jim is in a bind.

A payment to one of his largest suppliers is missing, and if it is not received by 5 p.m., the supplier will refuse further service to him. He doesn’t want to wait to find out if the check makes it there by the deadline, so he logs on to his online banking program and issues a stop payment order on the check. Then he sends the amount he owes directly to his supplier’s main operating account via a wire transfer.

In another example, Angela downloads, then e-mails, detailed records of her company’s accounts for the last month to her boss while she is on vacation.

Thanks to technological developments over the past decade, online banking has moved from concept to reality, allowing customers to perform treasury management functions normally handled by a banking officer.

Additionally, most financial institutions know that to stay competitive, it’s important to have secure online channels for their customers to do business. Online banking now forms the basis for the modern relationship between banks and customers, a relationship that relies on timeliness, convenience and ease of use in addition to the personal attention customers still expect from the branch office.

By far the biggest benefit of online banking is convenience. For the customer, this means the ability to perform banking functions anywhere, any time. Tasks previously handled by the banker can now be easily performed online by an educated user, so customers no longer need to wait to complete their transactions.

For the bank, a comprehensive online banking program eliminates the need for many employee commitments; the system is self-sufficient in handling customer inquiries.

The constant development of online banking programs helps improve efficiencies and drives down costs for the customer. The savings comes in the form of improved time management for business customers using online banking offerings.

For customers, comprehensive online banking programs largely eliminate the need for trips to the bank, except for cash transactions. For banks, online banking allows the redirection of critical resources such as staff away from routine transactions to address customers’ more complex needs.

Online banking forms a new channel between the customer and the bank, allowing the customer to perform lightning-fast transactions and exchange information safely and accurately. Without a speedy, accurate response to customer demands, the other benefits to online banking may be overlooked.

The best way to find out if online banking is right for you is to develop a healthy working relationship with your bank representative. Through a better understanding of your daily operations, your banker can make recommendations of what online capabilities will work best for you.

Some of the main modules to consider are the ability to transfer funds to outside accounts, create and print balance reports and monitor account activity on a daily basis.

Online banking has provided new tools of business that benefit both the customer and the bank. As technology continues to develop and be implemented, more controls will be given over to the customer, providing greater access to their banking needs. Clay Lanctot is cash management officer of Corporate Treasury Management for Fifth Third Bank. Reach him at (614) 341-2515.