THEY'RE getting faster and easier to use all the time. Banks, like personal computers, are jumping online to bring goods and services within easy reach. Why stir from your home when all you need is a modem and a mouse?
Online banking is part of a progression away from traditional banks toward automatic tellers, supermarket mini-branches, and other conveniences. It's the latest push in an industry struggling to cut costs and keep up with time-harried customers. "People demand convenience and they want do their banking virtually any place they can," said Curt Otaguro, senior vice president of operations, research and development at First Hawaiian Bank.
It's a fledgling market, catering mostly to the young, the restless, and the well-educated. But online banking is the way of the future, industry officials say, as computers proliferate and apprehensions fade.
With 10 million American households already on the Internet, one in five will be banking online within the next five years, analysts say.
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For a nominal monthly fee, you can track checking and savings accounts, monitor spending, pay bills, transfer funds, cut checks, review credit statements and most other banking activities any time of day.All you need is a computer and a bank that's "online" to deliver the electronic goods.
Options in Hawaii are currently limited to two banks: First Hawaiian and Bank of Hawaii. But others, not wanting to be left behind, are gearing up to follow suit.
"Clearly, the future is in online banking," said Alan Ono, executive vice president for administration at American Savings Bank. "It's just a matter of when it's going to fit and fall together."
Still grappling with its takeover of Bank of America last year, American Savings recently set up an electronic banking department. It's a first step toward an online service sometime after the year 2000, Ono said.
Central Pacific Bank, currently undertaking the huge task of integrating its data bases, hopes to be online next year.
"From a long-term positioning strategy, we know we have to be accessible 24 hours a day, seven days a week," said Wayne Kirihara, senior vice president of retail group banking at Central Pacific.
There are two routes to home banking: direct access to accounts over a dedicated phone line and Internet banking. The former, generally considered more secure, requires personal finance software. The latter, a quicker and more accessible route, does not.
First Hawaiian, among the first U.S. banks to venture online in 1996, offers a service called "PC Home Banking," a closed system delivering account information over a secured line.
Software -- Intuit's Quicken or Microsoft Money -- is needed to access and download information from personal accounts. Offered free by First Hawaiian, the software allows more sophisticated tracking of finances than the Internet alternative with pie charts, graphs and other accounting wizardry.
Fees range from $5 a month for full banking to $15 for bill paying and investment services as well.
When First Hawaiian first went online two years ago, software was seen as the better alternative because of security questions surrounding the web. But new encryption procedures, protective "firewalls," and other security advances have eased concerns.
Bank of Hawaii recently opted for the Internet, providing more basic access to account balances, bill paying, investments and other services. Ross Sakata, vice president of electronic banking at Bank of Hawaii, said that's all most users need.
"Quicken is great for people who have either a lot of money or a lot of time," Sakata said. "It's a lot of effort setting up the software and keeping it current."
Still, Bank of Hawaii's "e-bankoh" service allows software users to download and manage their wealth to their heart's content.
Bank of Hawaii last year put its Pacific Century Investment Services on the Internet and plans to add banking and bill paying later this month. Banking and investment accounts are free, with a $5.95 monthly charge for bill paying.
Just two local banks are currently online, but others are gearing up. Here's your choices: Who's Online?
First Hawaiian Bank
"PC Home Banking"
Bank of Hawaii
What You Can Do
Nationwide:
Source: Booz Allen & Hamilton Inc. Whether it's done in a closed system or via the Internet, online banking is highly attractive to banks because of its low cost and vast market penetration potential.
According to the American Bankers Association, the average counter transaction at a traditional bank branch costs $1.07, compared with 15 cents in a closed system or 10 cents on the Internet.
With customers tapping directly into their own accounts at will, paying bills, and taking out loans via home computer, banks avoid the high cost of employees, buildings, property and other overhead.
A 1996 study by New York consulting firm Booz Allen & Hamilton Inc. puts the average cost of setting up an Internet banking site at $125,000, compared with $1.75 million to build a full-service branch.
But the study notes more sophisticated Internet sites can cost up to $1 million.
The report predicts that computers will be in at least 40 percent of American homes and that more than 16 million customers will be banking on the Internet by the year 2000.
The numbers have First Hawaiian taking another look at the Internet.
"Looking to the future, Internet banking is definitely in the cards," Otaguro said. "We are investigating an alternative for that as well."
But if the future looks bright on the Internet, security concerns linger.
"The difficulty might be in the area of perception," said Wayne Kirihara, senior vice president of retail group banking at Central Pacific Bank. "Customers are always reading about hackers getting in."
Caught between their conservative instincts and the need to keep up, other banks are wrestling with the high-tech alternatives.
"We don't want to be left behind but we don't want to go too quickly and offer something that's not ready," said American Savings' Ono.
