Published: April 21, 2008 10:04 am      

Online transactions better, bankers say

Technology has introduced ATMs, debit cards and online transactions to the banking industry.

Future technology will have to address the safety of these features.

While some consumers may be leery of managing their money online, Karen Addleman, vice president of electronic banking for Somerset Trust Co., said that in her experience, most identity theft or identity fraud happens as a result of papers stolen from mailboxes or trash.

“Statistics prove that electronic banking and online banking are actually safer than a paper check,” Addleman said.

“Unless there is a specific reason for the bank to look at a customer’s electronic transaction, no human eyes look at individual electronic transactions. With a paper check, who knows how many people have seen the customer’s account number and bank routing number?”

Addleman also is leery of allowing credit cards out of sight – while paying a restaurant bill, for example.

“You have no idea what is happening,” she said.

Addleman believes online banking is very safe. It enables the customer to look at his account, pay bills and transfer funds.

Somerset Trust, with offices in Cambria and Somerset counties, introduced online banking in 1999 and has more protection features in place than a simple user name and password.

On the horizon, Addleman said, is banking by cell phone or a hand-held device.

“Mobile-device banking – via cell phone, text messaging or delivered via the Internet on your BlackBerry or other hand-held device – will become routine in the next few years,” she said.

“I have personally tested paying a bill using texting and my cell phone, and it is cool stuff.”

Mobile-device banking is still in the testing phase in this area, but Addleman found it easy.

“I can see it being used to pay routine monthly bills,” she said.

“When I tested it, if you didn’t pay a routine bill, you got a notice asking if you wanted that bill to be paid.

“(Use) will be limited at the outset, but the possibility exists,” Addleman said.

“I’m sure it’s at larger banks. I’m sitting back and researching, waiting until the bugs are worked out.

“It’s the next logical step,” she said. “Young adults live by the cell phone. They will demand it.”

Louise Lowery, chief information officer for First National Bank of Pennsylvania, agrees that online banking is safer than most people think.

“As a consumer, I prefer online banking to having bills sit all day unattended in the mailbox,” she said.

While online banking may be convenient and flexible in today’s go-go-go society of instant gratification, the challenge for technology will be to add controls to protect all that personal information and the financial institution as well, she added.

“Trust is a big component and will have to be taken seriously,” Lowrey said. “The focus will be on delivering mobile banking safely into the hands of the customer.”

She recalls seeing a movie in which a bank robber was after information on the bank’s servers, not the cash.

“He said, ‘That’s where the real money is,’ ” Lowrey said.

“With phishing attempts, fear and uncertainty make the consumer more vulnerable. We need to have education and awareness to assist with common-sense practices to help customers be protected.”

First National, which has offices in Cambria and Somerset counties, will provide not only the tools, but the controls to make technology safe and secure, she added.

“Nothing in this world is100 percent protected,” Lowery said. “It’s a calculated risk, but the convenience factor is awesome. It’s a phenomenal use of technology.”