Bankers are busy trying to convince people to use their banks’ online banking services as the industry struggles to cope with a new wave of regulations.
But there are more banks than ever before offering online banking options.
“I’ve been on the lookout for an online bank for a long time,” said John Pritchard, a retired investment banker from Massachusetts.
“But I can’t find one.
I’m sure there are other banks out there.
But I just can’t imagine that being as convenient.”
In fact, the vast majority of the banks offering online accounts are only interested in banks with branches in their own states.
“There are a number of banks that offer a bank online, but that’s not a common thing,” Pritcher said.
“And we don’t see them in the States.”
The banking industry has been slow to react to the wave of regulatory changes that have been rolling out since the end of the financial crisis.
The new rules, known as the Dodd-Frank Act, force the biggest banks to hold more capital in reserve than they had before.
And banks are facing new threats from cyberattacks and identity theft.
Many of the biggest names in the financial services industry have moved their headquarters to states where they have better financial incentives to invest in their local communities, such as Massachusetts and New York.
“You can see that a lot of the big banks are going to be very, very aggressive to find new locations,” said Mark Oster, a partner at New York law firm Brown Rudnick LLP.
“That will make it harder for a bank that is based in another state to offer a financial service in their home state.”
“We have a real problem,” said Tom Schiller, a banking analyst at Sanford C. Bernstein & Co. “We’ve been here for 30 years, and there’s still not a single bank that does the job in our country.
That’s a big problem.”
While banks are looking for ways to expand their services to the states where the most banks are located, some experts say the banks have an even bigger problem: their customers aren’t ready to give up their traditional banking accounts.
Some experts say people are already turning to online banking to supplement traditional banking, but some also believe that some of the online banks are making the decision too late.
“I don’t think the majority of consumers understand that the banks will have to make the same financial decisions that traditional banks have made,” said Scott Mazzone, CEO of the Consumer Bankers Association.
“The problem is they’re trying to do the right thing, but they don’t have the technology to do it right,” Mazzon said.
The Consumer Banker Association has called for the Consumer Financial Protection Bureau to create a bank site that would allow customers to transfer money to and from bank accounts online.
In addition, the Federal Reserve is considering allowing online banking in the Federal Deposit Insurance Corp. But many in the banking industry say that while they support the move to allow online banking, they also want to make sure consumers are fully aware of their rights and the risks associated with doing so.
“They have to know what the rules are and what they’re getting into,” Prieger said.
“If you want to do a deposit, you’re going to have to get a credit card, and you have to sign up for a checking account, and all of that,” Preet said.
“But that’s the way it is.”
The National Association of Realtors, a trade group for real estate professionals, also has urged banks to expand online banking.
“It’s not an easy task,” said Jeff Rosenfeld, president of the National Association’s Real Estate Council.
“The banks have to understand how consumers are using the bank.
If they’re not making that decision, then the consumers are not going to understand what’s going on.”