Will Branch Banking Suffer from the Internet?

With the explosion and popularity of the Internet, online banking has long since outgrown and matured beyond the realm of 'novelty' and is now an important element of virtually every financial institution. Whether you do business with a large national (or international) banking organization or a small local bank or credit union, it's a sure bet that you'll have the option of conducting at least some of your banking affairs through the medium of cyberspace. For the computer-literate, those that spend a good deal of time in front of a computer either as a function of their work or as a leisure activity, this convenience has become one that they'd now be hard-pressed to give up. But there are others, perhaps a bit older, who have never truly warmed to the idea of living so much of life through a monitor and keyboard. They remember with fondness the days when the local banker was a friend and transactions were done face-to-face.

Of course, time will continue to move forward relentlessly, as will technology – and certainly banking along with it. But does that mean that we can expect to see a wholesale reduction in the availability of brick-and-mortar neighborhood-banking branches? Well, that's probably not very likely – at least not in the foreseeable future. You'll still be able to visit your bank regularly and share a few friendly minutes with your favorite teller or customer rep. Nevertheless, it makes sense to anticipate that more and more services of all types will be available online and, regardless of your personal feelings toward computers, you'd be wise to be prepared for this 'progress.' So, whether you're well-versed or a newbie, here are a few basic tips to keep in mind when considering a bank that offers online services:

• Just as you would when choosing any bank, take the advice of the Federal Deposit Insurance Corporation (FDIC), do a little digging into the bank's history, the official name and address of its headquarters, and whether or not its deposits are insured. The bank should be a member of the FDIC, and be so stated conspicuously on the premises (if applicable; pure online banks will not have physical branches), on its literature and on its website. If it's not an FDIC-member institution, your deposits are not insured and you could lose your money if the bank goes under. (Remember, however, that life insurance, mutual funds and other securities often sold at banks are not FDIC-insured, regardless of where you buy them.)
• Be sure to contact the bank by phone and ask about their online services and policies. You're looking for legitimacy here; some online banking websites may seem real, but they're anything but. You'll also want to inquire about their level of customer service, as some companies' online help leaves an awful lot to be desired, while others' is surprisingly good.
• Take a good look at any online fees the bank may charge; you may get charged a pretty penny for the convenience the bank is offering.
• With the proliferation of identity theft, you'll want to ensure that your personal and financial information is well protected. Ask about the online service's website security and encryption methods; they should be the latest technology available.