Are financial professionals embracing the cutting edge of the new e-culture, or are they conforming to the cautious reputation of the counting classes?
According to the results of a recent survey of financial professionals about their attitudes to online banking, there is still much mistrust about the multiplying number of online services now on offer.
Most are happy to sit back and wait for other guinea pigs to try out looking after the financial affairs of their business on the internet.
And faced with a potential ‘soft landing’ in the economy, many businesses might not be prepared to take on the perceived risks of online banking – for example the disappearance of the weekly wages bill by pressing the wrong button – which they fear could cause all sorts of unforeseen problems.
The survey, carried out by Business Direct, the Co-operative Bank’s 24-hour telephone and internet bank, and Accountancy Age, revealed that only 17% of financial staff normally did their business banking through the internet.
A majority, 54%, preferred the safe option of dealing direct with a bank branch, with 28% happy with phone banking services.
But perhaps more telling is their attitude towards new methods of banking.
A similar majority, 56%, said they would ignore new methods such as online banking until they were ‘tried and tested’.
One third of the finance staff quizzed, however, said they would embrace the new culture with enthusiasm.
Proponents of online banking point to cost as a major part of the attraction.
Bank charges for small businesses are rarely out of the news, and most finance staff are always interested in finding ways to reduce these costs.
There are also practical attractions. Why waste time queuing up at your local bank branch when it is quicker to log on and view the company accounts on screen in the office?
This point is key to the success of internet banking, according to a spokesman for the Co-op’s Business Direct.
‘It is immediate and available 24 hours a day,’ he says. ‘The site gets hits at 4am and at weekends; often it is only then that many business people have the time to deal with the mundane reconciliations,’ he adds.
One in five of Business Direct’s customers have taken up its internet banking service since it was launched in September last year, a speed with which the bank is very happy.
‘This reflects the fact that the internet is now part of the daily business process,’ a bank spokesman said.
Other banks have also introduced internet banking for their business customers, the importance of which was highlighted by David Weymouth, chief information officer at Barclay’s e-day in the city last year.
Barclays’ business banking first introduced PC online banking in 1996, subsequently moving it over to internet banking.
Of its 435,000 small-business customers, 160,000 have signed up to the service.
Larger companies can use an extended, PC-based service that offers multi-levels of secured access, depending on an individual’s position within the company.
Jeremy Wright, Barclays’ head of online business banking services, like the Co-op, highlights 24-hour access as a key factor.
‘The ability to pay bills from anyone in the UK at any time is a definite advantage,’ Wright says.
The ability to download information and export it to spreadsheets is also an attraction to business, particularly for the accounting staff.
In the past, staff would have had to take details of transactions over the phone if they wanted the most up-to-date information on bank balances.
Now they can download all that they need and work with it offline and at their own pace.
Barclays’ split between small businesses and the mid to larger tier companies accurately reflects the current market for online services.
According to KPMG Financial Consulting’s director of research, Chris Gentle, there are two distinct camps of business users.
The small companies, typically with fewer than 10 employees, have banking requirements similar to personal customers.
The larger organisations are more sophisticated, requiring treasury, risk management and cashflow facilities, some of which can be done online.
‘Nine out of ten small businesses visit their branch at least once a week, making a net-only business banking proposition very difficult,’ says Gentle.
‘Having said that, half of the businesses are happy to bank online, showing that internet banking is part of an integral service, not a standalone.’
The 17% of finance staff in the Co-op’s survey that normally bank over the internet could be classed as ‘early adopters’.
Net banking has a way to go if it is to become the dominant method of banking.
As KPMG’s Gentle says: ‘It will require a change of behaviour, and banking habits do not change very quickly.’
Details about the online banking services above can be found at www.co-operativebank.co.uk and www.barclays.co.uk.
Other results of the Business Direct/Accountancy Age survey can be found at www.accountancyage.com/Practice/1115444.
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