|
|
|
Virtual Trust
Banks build Web businrss on brick and mortar values
|
Business New Haven
10/30/2000
By: Lori Green
|
Behind the thrills of speed-clicking through killer apps, access on-demand, free shipping or dancing icons, lies the heart of e-commerce: trust. Without it, nothing sells.
Banks have understood the value of trust for a long time. In fact, it used to be a kind of popular last name for financial institutions, as in “Union Trust” and “Manufacturers Hanover Trust.” Those companies may be history, but brick banks today leverage brand and “trust-equity” to drive growth online.
Some banks are going beyond the standard bricks-and-clicks model to building e-commerce spaces for local businesses. For example, The Savings Bank of Manchester (SBM) recently launched its NetShop marketplace and expanded business-oriented content on its site.
“What we want to do is to offer portal services to bring information and products to our customer base,” explains Douglas Anderson, executive vice president at SBM. “We have the ability to do this because the bank is regarded as a business partner - especially by the small-business world.”
Shoppers - bank and non-bank customers - sign up once and use a single shopping cart for all of the vendors hosted on NetShop. Many banks, including SBM, believe they offer users greater comfort by providing an envelope of security and trust around the e-commerce transaction. “We're requiring participating merchants to adhere to the security standards that we think are necessary,” says Anderson.
NetShop may be as safe as the bank vault, but participating local businesses have to share the site - and their shopping cart - with national heavyweight competitors like Land's End, Sharper Image and OfficeMax.
“Competition with the big companies is a fact of life today,” Anderson says. “Our local merchants are in competition with these national brands constantly. But it now appears that all of the large Internet vendors are looking for local entities to help them as customer-service partners.”
In fact, Anderson sees SBM as leveling the playing field by featuring local merchants alongside large national companies. “The advantage of the local merchant is that he can say, 'Come down to the shop and I can show you how to use the item you purchased, or show you something different.'” The bank is betting that bringing smaller retailers online will help to drive their in-store traffic and sales, in addition to generating Web-based revenue.
And giving small businesses more reasons to visit a bank's site has distinct cross-selling advantages. That's why even smaller, local banks are devising strategies for becoming the e-banking partner of choice among hometown businesses.
New Haven Savings Bank is beginning to look at setting up an e-marketplace after it completes roll-out of its new online commercial banking solution. The system will permit business customers to conduct authorized clearinghouse (ACH) transactions, manage payrolls, pay taxes and collect balances.
“We're also able to extend the e-commerce capabilities of customers' existing sites, such as helping small businesses to accept payment over the Web. This lets them draw more volume to their site,” says Joe Tartaglia, assistant treasurer for cash-management services at New Haven Savings.
But what about small businesses that tend not to click on their bank's site to shop for jeans or to extend their own Web capabilities? s it better for businesses to bank online?
Bankers report that some people like it and some don't. All agree that e-banking security is not a problem. Most banks use the industry's standard 128-bit encryption technology, and some periodically hire professional hackers to test their site's defenses.
Says Webster Bank's Fran Duggan, senior vice president of the bank's e-business group, “We're certified by the security testing firms we hired to try to hack into our site and were not able to do so.”
After re-launching its Web site a few weeks ago, Webster now offers small businesses expanded bill payment and invoicing services. The bank's strategic alliance with New Jersey-based Princeton eCom enabled it to upgrade and expand billing functions.
Also available are capabilities such as electronic collection, electronic lockboxes, as well as credit card balance transfer services. A suite of online cash-management services is slated for rollout by year's end.
Banks of all sizes are now able to afford the same level of security for their online operations, but regional giants such as Fleet can hire companies like Microsoft and EMC2, among others, to build proprietary, super-secure systems. That's how Fleet developed its new fileTRUST product, targeted to home office, small business, and professional markets, and especially to physicians, CPAs and attorneys.
Touted as the “first-ever Web-based safe deposit box,” fileTrust allows users to rent e-space in order to securely upload or download important files at any time - 24/7. Fleet claims that documents housed in their virtual safe depository will be protected from “deadly viruses, computer damage or system failure.”
Fleet's core commercial electronic banking product, OfficeLink, permits businesses to do real-time checking and account reviews, bill-paying and fund transfers. The system is scalable to the needs of small-business owners, with customizable settings such as balance alerts.
While Fleet recognizes that the banking needs of small businesses differ from those of bigger companies, bank officials do not believe those needs vary by geographic market.
“We don't see any distinctly different characteristics here in Connecticut from those of small businesses across our franchise. There are volume and sophistication differences, but I would say that Connecticut lies right in the middle of what we've seen,” says Jim Schepker, Fleet's SVP for media relations.
According to Schepker, small businesses have not been demanding expanded e-banking solutions. During the past year, Fleet has seen many smaller firms more preoccupied with business development, sales and marketing initiatives, as well as recruitment. Office automation is only now becoming a priority.
Mike Leone, People's Bank's EVP for its e-business division, holds a similar view.
Says Leone: “We look at the Internet as a way to satisfy customers' needs. Quite honestly, there's not an overwhelming demand right now for additional online services from small-business customers. We're spending our investment dollars where we think the customers have the greatest need, and our small-business customers are pretty happy with the way things are working at the moment. As that appetite increases, we'll respond to what our experience tells us.”
Bridgeport-based People's currently offers basic e-banking services for both small and medium-sized businesses.
The bank is focused on delivering multiple product lines through multiple delivery channels - all of which permit customers to deal with People's in an integrated fashion.
With respect to the bank's commercial e-banking strategy, Leone says, “We have invested some resources in developing commercial banking functionality, and we're running it on a platform that has a lot more capability than we've rolled out so far. We're doing a lot more online with our credit-card and investment businesses than in our commercial or consumer banking.”
However, Webster Bank has identified substantial opportunities in the small-business e-banking market and, like SBM, envisions itself playing a lead role in helping local businesses expand to the Web.
“Online banking is not just about facilitating the transaction,” says Webster's Duggan. “What we want to do is to offer portal services - providing information, services and advice for our small-business customers, including answers to questions such as, 'How do I get help with VC financing?'
“We're always getting requests like 'How do I get to the other businesses that you have dealings with?'” Duggan adds. “We see the bank as able to link our business-to-business customers with each other.”
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
