Web Banking Makes Friends, One at a Time

I don't bank online. And until recently, I didn't know a lot of people who did. But lately, people who bank online are everywhere and they're not afraid to admit it.

Not only that, they are, to a person, happy customers.

When someone gives you, completely unsolicited, a glowing review of online banking, you know those bankers must be doing something right.

And that's good news for an industry that everyone thought would have taken off long before now.

Trust Me

Recently, I heard two testimonials about Web banking in as many days. Not exactly a landslide, it's true, but they came from people in completely different walks of life and regions of the country.

For a moment during each conversation, I felt each was trying to convert me. Like they could nudge me toward the light and I would be saved.

"I haven't bought stamps in six months," one person told me.

I didn't tell him that I kind of like stamps, especially now that you don't have to lick them any more.

Into the Unknown

The other person had a more practical approach: "Paper bills get lost in my apartment."

I believed these testimonials because they came with reservations.

"The first time you do it," one person said, "you don't know if it (the payment) got there. You half expect a guy to show up at your door with a wrench and shut off your gas service."

But of course, that doesn't happen. Or at least my friends didn't tell me about those kinds of incidents.

Bricks of Gold

Both of my Web banking friends also use brick-and-mortar banks that have built up significant online services. In other words, they are shunning pure-play Internet banks, just like almost everyone else in every other industry.

What's interesting is that neither person is particularly adventurous when it comes to technology. Neither owns a PDA. Neither uses a cell phone to surf the Web. But they broke through the worry barrier on online banking, and they seem to be glad they did.

This, of course, is pleasant to hear for online banking, which has been waiting for its time to come for a long while now. As the old saying goes, word of mouth is the best form of advertising there is.

One by Each

It's not the fastest, however. And people seem to be adopting Web banking one at a time, not in big bunches. If Web-only banks needed more bad news, there it is: Banks that can hold on the longest will emerge victorious.

If you don't have a stream of customers from your brick-and-mortar and ATM machines keeping you in the green in the short term, you might not be around long enough to collect a sizeable share of the online customer base.

By now, we're used to seeing pure plays get waylaid by the bullies from the real world. But in the banking world, how surprising a development is that, really?

Bad Timing

If Web banks had another two or three years of deep-pocketed investors and no worries about profits, maybe they could have wooed enough customers to make their existence more than a blip on the radar screen.

But when you're talking about taking someone's money, holding on to someone's money, doling it out when they say to, you're talking about an awesome responsibility. It's no surprise that people weren't willing to hand that responsibility over to a faceless, nameless person on the other end of an Internet connection.

Before long, Web-only banks will be extinct, another symbol of what the Net was supposed to be capable of eliminated.

Brick-and-click Web banking will continue to pick up steam, however, one customer at a time. And that's not a bad consolation prize.

What do you think? Let's talk about it.