Internet banking: It's closer than you might think<\/p>\n
By Zatni Arbi<\/p>\n
JAKARTA (JP): One of the hottest issues in our letters column
\nlately has been the unfairly huge commissions claimed by local
\nbanks that offer savings accounts in U.S. dollars.<\/p>\n
Just last week a letter on the same issue also appeared in the
\nKompas daily.<\/p>\n
Complaints varied from inconsistent policies to arrogant
\ncustomer service staff and branch managers.<\/p>\n
The bottom line is the question whether it is worth putting
\nour hard-earned U.S. dollars in a savings account in an
\nIndonesian bank after all.<\/p>\n
Based on reports that people have given us, it is clear that
\nwe need to leave our money in their vaults for a long time before
\nwe ever see it grow.<\/p>\n
If we deposit our funds in the account and withdraw them only
\ntwo or three months later, we will end up losing money instead of
\nearning any interest -- thanks to the exorbitant and arbitrary
\ncharges.<\/p>\n
Well, like in so many other things in this country, we are not
\ngiven much choice.<\/p>\n
Obviously these banks think that, since they are big and we
\nare small, they can dictate any rule.<\/p>\n
The unfortunate thing is that rarely do these rules ever
\nbenefit us, their customers.<\/p>\n
Take the bank statement that embassies usually require before
\nissuing you a visa to enter their country.<\/p>\n
The branch of the bank where I have my savings account, for
\ninstance, charges me Rp 25,000 to get this statement.<\/p>\n
I find it rather unfair, because everything is automated and
\nthere is very little human effort required to produce that simple
\npiece of paper.<\/p>\n
Yet I have no choice, because that is the bank's policy.<\/p>\n
But, take heart, folks.<\/p>\n
Banks are all about services and it won't be long until you
\ncan choose your bank based on how well they serve you. When the
\nfree-trade era arrives and most services get truly deregulated,
\nyou will have the choice of foreign banks that do not reside in
\nIndonesia to put your money in.<\/p>\n
Even today a lot of banks already provide Internet-based
\nservices.<\/p>\n
Just this week I got a note from Bank of Hawaii.<\/p>\n
I was informed that they were establishing an electronic
\nbanking system that I would be able to access through their own
\nWeb site. Since I still maintain a small checking account with
\nthem, I went straight to visit www.boh.com and see it myself.<\/p>\n
Easy access<\/p>\n
When I left Honolulu in 1992, I maintained a small amount of
\nmoney in a basic checking account at this bank just in case I
\nwould need to write a check once in a while when ordering books
\nor software from the U.S.<\/p>\n
I am glad I did. In the past six years this checking account
\nhas been very useful. Each time the balance becomes dangerously
\nlow, I'll just buy a money order from the local American Express
\nand mail it to Bank of Hawaii.<\/p>\n
They will deposit it for me. It's so simple.<\/p>\n
But now with the on-line services that they are going to
\nprovide, banking with Bank of Hawaii will become much more
\nconvenient.<\/p>\n
When the service starts next month, I will be able to check my
\nbalance in real time.<\/p>\n
I will no longer have to wait for my monthly statement to
\narrive--usually three to four weeks later.<\/p>\n
Being a rather sloppy person, I really like this capability as
\nit will help me avoid bounced checks.<\/p>\n
I will also be able to open a savings account and transfer
\nfunds from one account to the other on-line.<\/p>\n
If I should suddenly strike a fortune and become a
\nmillionaire, I could even invest in Bankoh money market accounts.<\/p>\n
In the long run, I will even be able to obtain loans from this
\nbank without having to show my face to them.<\/p>\n
If you had a Bankoh Visa or MasterCard, you would also be able
\nto keep track of your available credits.<\/p>\n
If payments were due, you'd be automatically reminded -- as
\nyou can see in the accompanying picture. You can even invest in
\ntheir Certificate of Deposits, and you'll know when your CDs will
\nmature.<\/p>\n
Furthermore, if you had bills to pay, you could make the
\npayments from your home PC.<\/p>\n
For most of us, paying bills is a task as abhorred as renewing
\nour driver's license.<\/p>\n
Just imagine how convenient it would be once we bank on-line:
\nNo more stamps, no more envelope licking, no more trip to the
\npost office.<\/p>\n
Keep in mind that the checking, savings and time deposits
\nstatements you see in the picture are part of the demo screen.
\nCyber banks<\/p>\n
They are not real, and, more importantly, they are not mine.
\nThe demo screen is a glimpse of how we will bank in the future.<\/p>\n
The best news of all is it will no longer matter where the
\nbank is physically located. Some banks even do not have any
\nheadquarters as they exist entirely in Cyberspace.<\/p>\n
If we click on the Statements button, the screen will display
\ndetails of all the deposits made to our account within the time
\nperiod and the dates they were made.<\/p>\n
It also reports the amounts of checks drawn against it,
\ncomplete with dates when the bank received the returned checks.<\/p>\n
It also tells us all other charges against the account, such
\nas the monthly service charge, a stop payment or printing of
\npersonalized checks.<\/p>\n
And, of course, it will tell us our current balance.<\/p>\n
Indeed, on-line banking has been around for some time and not
\nmany of us are aware of them.<\/p>\n
According to Online Banking Report, in early 1996 there were
\nonly about 250,000 people in the U.S. who accessed on-line
\nbanking services. Today it is 2.5 million.<\/p>\n
When I used AltaVista to collect all the documents containing
\nthe words \"on-line\" and \"banking\" from the Web, I got a whopping
\nlist of 11.5 million items.<\/p>\n
Some of the materials -- I only browsed through a few of
\nthem-- were pretty informative.<\/p>\n
There were publications that specifically deal with problems
\nand prospects of this type of electronic business activities,
\nsuch as the Online Banking Report (www.onlinebankingreport.com).<\/p>\n
Another large institution that also provides Internet-based
\nbanking services is Wells Fargo, the 10th largest bank holding
\ncompany in the U.S.<\/p>\n
This bank has close to 2,000 branches in 10 Western states.<\/p>\n
Incidentally, if you're interested in history, you can go into
\nWells Fargo's site (http:\/\/wellsfargo.com) and read intriguing
\nstories about its past since its founding in 1852..<\/p>\n
Wells Fargo, which will also be providing customers electronic
\ncash stored in chip cards that they call Mondex, seems to be
\nquite keen in using technology to leverage their Internet
\nofferings.<\/p>\n
They are one of the first few who have jumped on the WebTV
\nbandwagon. You can find extensive demos on their Web site.<\/p>\n
You can go over these demos to get a feel of on-line banking,
\nand if you're interested you can open an account with them.<\/p>\n
Secure?<\/p>\n
Unfortunately, to open a credit card account you are still
\nrequired to have a U.S. Social Security number and a driver's
\nlicense number.<\/p>\n
One major concern in the minds of most of us each time we
\nhear the term \"Internet banking\" has obviously been security. How
\nsecure is on-line banking?<\/p>\n
Bank of Hawaii claims that it is as secure as depositing money
\nin the bank branch near your house.<\/p>\n
They use advanced encryption techniques to make sure that no
\nthird party can intercept the data that is being pumped back and
\nforth between our browser and their system. They also have built
\nFirewalls that fortify their internal networks from the Internet.<\/p>\n
A Firewall is a system of servers that stand between the
\ninternal network and the Internet.<\/p>\n
When we communicate with their system, actually we are
\ncommunicating with the Firewall, which will then be communicating
\nwith the system we want to speak to.<\/p>\n
You must also have heard of software such as MS Money and
\nQuicken.<\/p>\n
These are software programs that you can use to organize your
\npersonal and family financial matters.<\/p>\n
Many banks cooperate with Microsoft and Intuit in developing
\nthese packages, so that data can be copied from the banks
\ndirectly into Money or Quicken.<\/p>\n
So, guys, if local banks keeps on robbing you by taking too
\nmuch commission from you, perhaps you can start looking at the
\noption of on-line banking.<\/p>\n
At least you know that in the near future they will become as
\ncommonplace as the ATMs in your neighborhood shopping centers.
\nInternet banking will also enable you to bank across the Pacific
\nOcean -- Bank of Hawaii and Wells Fargo are just two examples.<\/p>\n
So far, I think, the only problem you may face in the future
\nis that you cannot get cash as fast as you might wish in case of
\nan emergency.<\/p>\n
Suppose I had a lot of dollars deposited in my Bank of
\nHawaii's accounts, it will take about one week and two or three
\nwire transfers before I can see them here in Jakarta.<\/p>\n
But, then again, your credit cards allow you to use some cash
\nadvances, and credit cards are more universally accepted.<\/p>\n
Clearly, in the not so distant future, there will be less and
\nless reason to put up with the arrogance of our local banking
\ninstitutions.<\/p>",
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"sponsor": "Okusi Associates",
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