Banking by Computer Makes Life Easier

Many of the fantastic visions about computers and technology from the early 1980s have remained simply fantasies, the stuff of imagination deferred.

Sure, the Internet has brought a world of information to individuals in their homes and offices, but personal and domestic robots, even simple ones, never caught on. And almost no one uses home automation technology to control their appliances and lights, even though the underlying X-10 technology has been static for almost twenty years.

At long last, however, one of the key visions of the early days of hobbyist computing--home banking--is taking off. Forget those annoying trips to the local Cambridge Savings Bank to check balances; no more searching for stamps. After years of false starts, home banking via personal computer (PC) is becoming a major new use for home computers.

Of course, home banking doesn't let you cash a paycheck or withdraw funds. Even Apple hasn't yet created a PC with a cash dispenser built into the chassis! When it comes to checking your balances and paying your bills, however, you have access to your account 24 hours a day, seven days a week.

From the banker's perspective, the migration of consumers to home banking is an extension of the trend towards automation that has occurred over the last two decades.

Automated teller machines (ATMs) allowed banks to cut operating costs by replacing human tellers with electronic cash dispensers. And what was once a novelty is quickly becoming a standard. Many large banks are now offering free ATM use but charging service fees for speaking with a human teller.

Home banking is the "second wave" in this automation revolution. On-line bill payment decreases check-processing costs for banks, and every customer who tracks his or her balance through a home computer makes it one less person who needs to call a customer service phone number.

But home banking isn't strictly beneficial to banks. From the consumer's perspective, it makes it quicker, faster and ultimately cheaper to pay bills and to manage your money. Forget writing checks each month; why not just send payments to your creditors via computer?

If you have an account with a major local bank, chances are you already have access to home banking. Undergraduates who have accounts through BankBoston (www.BankBoston.com) have undoubtedly already been inundated with information about the HomeLink system, for instance. The service and software are free, although there is a nominal monthly charge for electronic bill payment.

With the HomeLink system, you use a modem to connect to BankBoston's encrypted dial-up system via the phone lines they provide with their software. (You can't access HomeLink over the Internet yet.) Enter your personal identification number (PIN) code, and you're ready to go.

Checking your account balance is as easy as a keystroke. You can also check recent bank activity, sorted in dozens of ways. But the selling point of home banking, as the Packard Bell commercials enthuse, is bill payment.

The first time you pay a bill with HomeLink, you tell the system the company you're sending a payment to, their mailing address and pertinent information like your account number. From then on, whenever you want to send a payment to that creditor, you select them from a menu and tell HomeLink how much you want to send. Forget looking for stamps; BankBoston either transfers the funds electronically or mails the check itself.

HomeLink's interface is primitive, harkening back to old MS-DOS terminal programs. All the menus are accessed by the keypad on your computer, with little mouse support and no graphics. Bank-Boston's promise to deliver a new, graphically-oriented version is almost a year late. But you can use HomeLink to transfer data between Quicken, the popular personal finance software package, and your account.

HomeLink and other packages like it are great if you have a bank account locally and just want to access it electronically. If you're really interested in Internet banking, however, you can now transact all your banking without ever seeing a banker, or even a bank branch.

Security First National Bank (www.sfnb.com), insured by the Federal Depositors Insurance Corporation (FDIC), offers services strictly over the Internet. There is never a local branch to visit. To deposit funds, you use ATMs or direct deposit. All bill payments are done over the Internet with a secure browser like Netscape Navigator or Microsoft Internet Explorer.

SFNB is evidence that banks can save customers money by turning to the Internet. After making a $100 minimum initial deposit, there are no monthly fees, no monthly balances, unlimited free checking and 20 free electronic bill payments per month. If you don't mind changing your banking habits, you can get a free account and access it from anywhere you can access the World Wide Web.

With all the available options for banking, it's hard to go wrong. If you feel comfortable with technology, you'll love throwing away your checkbook and paying your bills electronically. And if you don't--well, as the history of ATMs shows, you may not have much choice in a few years.