The business of banking online is no longer reserved for the giants.
Community banks have been ramping up and serving the increasing demand for service not only at local branches, but also through the convenience of the customer's own computer.
Danvers Savings Bank, Wainwright Bank and Lighthouse, a new virtual bank, all within the past year have unrolled their online banking services.
Danvers went live with its program in November, but "the concept was floating around for two or three years prior to that," said Lisa Rose, vice president and chief information officer.
The bank purchased an online banking package and hired one employee to take care of the increasing customer service need.
The system, which so far has not suffered any glitches, pretty much takes care of itself, but customer e-mails and the opening of new accounts are handled the old-fashioned way, Rose said.
The bank benefits because the system takes traffic out of the branches and helps customers to become more knowledgeable about their accounts, she said. "The challenge is keeping up with the advances. The whole online banking realm is changing on a daily basis."
Wainwright Bank, which like Danvers, bought on on-line banking package, opened its online service offerings July 5. Wainwright made the decision based on customer demand.
"Being a Boston-based bank, our clientele is very sophisticated in terms of the Internet and online," said Steven F. Young, senior vice president of the consumer banking group. "Over the last year and a half, the demand was like a floodgate."
The popularity of Bank Boston's (now FleetBoston) Internet banking program opened the door for Wainwright.
"As all those customers had (Bank Boston's program) but were dissatisfied with Bank Boston for other reasons," they came to Wainwright, Young said.
The bank was expecting 300 new online accounts by the end of the year. Instead, by the end of the first month, the number of accounts reached 450.
"We see no end in sight," Young said.
Wainwright has created a separate online banking department with its own branch manager and one other employee. The operation takes place in a room within the bank's corporate offices.
Despite the popularity of the program, however, the traditional branch is not on its way out, Young said.
"Bricks and mortar are not going away," he said. "This is just an enhancement. It's just another option for the client."
Tom Venables, co-founder and chief executive officer
of Lighthouse Bank, sees a different future for banking
on-line. Venables, who has been in banking for 26 years,
and a partner recently established an entirely online
bank.
Lighthouse's operation center is in Waltham, but all transactions and services take place on the Internet. Brookline Bancorp. supplied startup funds for the venture.
"Bricks and mortar would have to go," Venables said. "Banks need those fees just to support their branch networks. There doesn't really need to be this physical presence."
The bank, which has been open since June 26, does not require fees and features high interest rates and low minimum balances.
Deposits can be made by mail, wire or through direct deposit, and Lighthouse offers a $6 per month surcharge reimbursement for ATM withdrawals.
Lighthouse created a customized front end and plugged it into a standardized banking package. Venables would not say how many accounts have been opened, but he did say the effort has been successful so far.
"The fulfillment operation is a challenge," Venables said. "No one is more creative than a group of customers."
Not all area banks are jumping on the Internet bandwagon as acceptance of the type of service is growing. A Salem-based bank has been in the game since the early days.
Salem Five established its Internet banking program in 1996.
When the Internet came along, it offered boundless geography for a large bank in a small area, said William Mitchelson, chairman and chief executive officer.
The early customer was very computer literate and often a member of a technology industry, he said.
Today, the Internet customer can be almost anyone.
"With the proliferation of PCs and general acceptance, we see a wider range of individuals coming on," Mitchelson said.
Salem Five did not initially ramp up operations for online banking, but eventually did more hiring as the Internet customer made up nearly 20 percent of the bank's customer base.
The bank plans on opening a "physical-virtual" branch in downtown Boston this fall. It would offer personal attention, Internet kiosks and video conferencing.
It is Salem Five's affirmation that bricks and mortar will be around for a while.
"What we have found is that the business model that is most appropriate combines the two of them," Mitchelson said. "People still like to know they can come in and touch and feel a bank."
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