The myth? That internet banks are out to replace traditional banks. The fact is - they complement each other. They co-exist. Effectively.

In a nutshell, internet banking revolves around the supremacy of electronic automation - while traditional brick-and-mortar banks build a personalized relationship with the all important customer. Science, after all, cannot contribute to the emotional attachment that a customer experiences when he looks into the eyes of the branch manager - and entrusts his funds with the owner of those eyes.

On with the comparison then. FundSafe is a fictional bank that doesn’t exist in reality (hopefully). Google couldn’t find any FundSafe bank, and on it’s face value, I buy the non-existence. Shyam and Sean are the characters in this write-up, no guesses as to who’s traditional and who’s not!

Shyam’s profile

Age: Mid 40s
Income: Owns a textile business
Upbringing: Traditional
Priority: Cultural values, ethics, trust
Balance: INR 9,500,000

I’ve been banking with FundSafe for over 10 years now. I find it very convenient to visit the main branch, speak with my branch and relationship manager, and discuss the offerings specific to me or my corporate segment. I feel very secure when I see cash flowing in an out - it makes me feel that my money actually exists, and the people take good care of it. I express a level of growing trust with every handshake and experience with the brick-and-mortar bank.

Of late, they have been enforcing us to use what they call NetSafe, which I believe is their internet banking solution. I am no great shakes at computers, and after much agony I manage to locate the Internet Explorer icon on the desktop (is that what it is called). I tried logging in once or twice to see what it was. I couldn’t understand much, but I saw my statement online and the latest balance. I click on the other options and I found I could do my bill payments and also transfer funds outside the country as a TT. But I don’t know how it would work, and whether it would actually reach the recipient - so I think I’ll ask my branch manager the next time.

Guess what? The ’’next time’’ probably never came. It’s not just that people like Shyam are not educated enough to use internet banking - but the fear of the unknown adds to the hesitation factor. So it’s a shame, really, that internet banking hasn’t yet matured to the extent it should have, while ATMs and Call Center agent assisted ’’automated’’ banking has grown in leaps and bounds.

Let’s face it - Shyam has good reason to believe that NetSafe cannot meet his requirements in terms of the comfort levels he expects when he has close to a crore with FundSafe.

Clearly, with customers like Shyam, traditional banking has no substitute and internet banking will do well to focus on contemporary customers - like Sean.

Sean’s profile

Age: Early 20s
Income: Full time call-center agent, part-time hardware technician
Upbringing: Contemporary
Priority: Speed, technology, and the ’’kicks’’
Balance: INR 300,000

I opened my NetSafe account a month back, and it’s totally radical! With the previous bank, I had to wait ages in a queue for simple banking applications but they’re all online on NetSafe. I can add currency to my Hutch pre-paid anytime, anywhere and guess what - I get SMS alerts every time something happens on my account! Banking is so easy now, there’s a bit of fuss on the securities and things like that but I see the lock down there and that makes me feel safe enough.

I’m not dealing in millions anyway, just transfer funds in and out of my savings accounts - and I’m sure there are high priority customers than me (like Shyam?) so I think NetSafe is pretty secure.

The other day was so difficult for me, when NetSafe was not accessible and I needed to up the talktime on my Hutch pre-paid. After ages I had to walk down to the local store and I had almost forgotten how to top-up otherwise!

There you go - for people like Sean, NetSafe is their relationship, not the bank! Without NetSafe, they are handicapped. And why not? For the common retail customer who is comfortable on the PC - nothing like a convenient internet banking solution.

The pros of traditional over internet banking

More personalized, increased comfort levels
No substitution for emotional attachment
Your funds are tangible
As a customer, you can express your authority for service - life is easier when you can shout into your branch manager’s face and shoot off the complaints in comparison with filling a long complaint form on NetSafe’s complaint registration webpage.

The pros of internet over traditional banking

Speed - Information in a flash
Accuracy - Latest, updated statements and balance information
Accessibility - Get connected to your bank and money - anywhere, anytime
Thrill - the kick you get out of transferring money online and real-time

The obvious question is - how do I choose? And the obvious answer is right here - you DON’T need to choose. It’s simple - use internet banking when real-time accurate balances are what you need. Save the branch visits during off-peak hours or when you know for sure you will be serviced.

Me? I do all my enquiries online, the quickfire, less value transactions online. Sorry FundSafe, but for high value transactions, I need to see those eyes again.

Footnote: In the rush for automation, aggressive banks have automated almost all brick-and-mortar finance processes with the hope of leading the race. Some of these online services just exist for the sake of it - without any value add or business justification. So don’t be misled by these. I am a firm believer that quality rules over quantity, and adding all these services online without improving the critical ones is like adding water to milk - there’s more solution, but less cream :-)

Until next time,
Sandu