Finance U

At Your Fingertips

Online banking saves time and money--yet few small businesses regularly bank on their PCs. Why?

"Banks haven't yet delivered anything significant for small businesses on the Net," contends Alex Stein, whose Concord, Massachusetts, research analysis company, Gomez Advisors Inc., focuses on Internet financial services.

Jim Bruene agrees. "Web sites right now are not built for businesses," says the publisher of Seattle-based newsletter Online Banking Report, which advises bank executives on electronic customer service. He sees a future site "where banks will have all your customer files, billing information and accounts receivables. You check boxes, do billings and have customers pay directly on the site."

To take advantage of what's available now, Bruene advises small-business owners working on a cash accounting basis to use consumer software or Web sites to bank online. Bruene, for instance, accesses his business accounts, transfers funds and pays bills--all using consumer sites. "The more complicated your finances, the more online banking can do for you," he contends.

Another reason businesses have been slow to get online, says Stein: "Internet banks are targeting consumers, not businesses. They're protecting . . . their business relationships. Think about Y2K problems and other challenges banks have in the off-line world. They're waiting to deliver an interactive product that enhances the customer experience at a reasonable cost. It's better not to do something new than to embarrass themselves."

Another dissuasive factor may be security, according to a survey by the Emerging Technologies Research Group at FIND/SVP. But FIND/SVP reports users fear loss of privacy more than losing funds to online fraud. "Risk perception is fading," argues Bruene, a former banker who led U.S. Bancorp's online development efforts in 1992.

Of about 800 banks offering online services via PCs, growing numbers also feature so-called "small-business programs." Among them: Wells Fargo (800-956-4442,; Chase Manhattan Bank (800-CHASE24,; BankBoston (800-788-5000,; First Chicago National Bank (888-963-1900,, and Bank of America (800-477-5899, Service is free to business customers at Chase, and as high as $17.95 a month at First Chicago.

Before banking online, verify the site's authenticity by calling the bank or the FDIC Consumer Hot Line (800-934-3342) or checking out the institution online (

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This article was originally published in the January 1999 print edition of Entrepreneur with the headline: Finance U.

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