June 14, 1999
Clueless banks are spelling opportunity for online start-ups
I'm mad as hell, and I'm not going to take it anymore.
This may not be news to you, but the banking industry hasn't got a clue about the Internet. During the past two months, I've discovered how frustrating that cluelessness can be for an ordinary, wired consumer.
After my local bank got acquired by a large out-of-state bank, Washington Mutual, Quicken-based access to my account information was terminated without warning: The new bank doesn't support it.
Washington Mutual's customer service representatives were eager to point out their new Web banking site to me. And, after filling out a Web form, waiting a week, making a phone call, then waiting another three days, I was finally able to access it.
I'll admit that when the servers are up, the system works reasonably well for showing me account details and transaction histories. But there's no way to synchronize my Quicken files with the Web system, other than by manually re-typing the data, one transaction at a time.
It seemed like a good time to find a new bank. And, since I'm an Internet columnist, I started by looking at Internet banks. Unlike physical-world banks, these start-ups should be scrappy, service-oriented, and competitive -- at least that's the theory.
But integration with Quicken or Microsoft Money? Forget it -- no Internet-only bank that I could find offers it.
This sad state of affairs reminds me of the early days of electronic commerce, when commerce-site operators would print out orders they had received online, then manually type them into their order-entry systems. It's only in the last year that e-commerce vendors have started to concentrate on end-to-end automation.
In the online banking world today, there are legacy integration problems, but they're on the client side: I can't synchronize Web data with the personal financial management software of my choice.
A deeper problem is that the banking industry as a whole has almost no customer-service ethic. And there's been very little real competition among banks because it's so hard for consumers to compare the offerings of different banks.
Even on the Internet, comparisons are difficult, although that's starting to change. Sites such as Gomez (www.gomez.com) and BankRate (www.bankrate.com) provide basic tools for comparing banks' online offerings. I wish these sites would publish more details about account features and fees, and that their reviews of online banks were more hard-hitting, but it's a start.
The service vacuum in banking should present a golden opportunity for online entrepreneurs. E*Trade grasps this, and that's why it recently made moves to acquire Telebank, an Internet-only bank. But the window of opportunity is still open.
All you need to do is create an online financial service provider that offers Web-based access to all account features and data, along with Quicken and Microsoft Money integration. Add killer customer service, competitive rates, and an array of value-added financial services, such as investing, mortgages, car loans, and online shopping services. Free of brick-and-mortar overhead, you should have a winning start-up capable of taking on the industry's biggest dinosaurs.
And, if you do that, I'll be happy to become your first customer.
How will the banking industry adapt to the Internet era? Write to me at dylan@infoworld.com.
Dylan Tweney is the content development manager for InfoWorld Electric. He has been writing about the Internet since 1993.
Previous columns by Dylan Tweney
Better claim your space: The Internet land grab will produce many minimonopolies
June 7, 1999
Affiliate marketing: the future of e-commerce or another hard sell?
May 31, 1999
Push: The rumors of its demise have been greatly exaggerated
May 24, 1999
Distance learning is no substitute for real-world education
May 17, 1999
Every column since August, 1997
