Canadians tie with Swedes as the nationalities most likely to bank online, according to a recent report from the Angus Reid Group, a research firm based in Vancouver.

This finding comes from its "Face of the Web" survey-a component of a larger study-and it was commissioned by Royal Bank of Canada. The total Angus Reid research is based on interviews with Internet users and non-Internet users in 34 countries worldwide and is billed as the "most comprehensive international study of consumers and the Internet ever done."

Although Canadians share joint first place for online banking consumers as a percentage of total population, if one looks only at the subset of the population that are Internet users, Canada's percentage of online banking consumers slips. Since Canadians use of the Internet is more diverse than that of some nationalities, who use the Internet mostly for banking, Canadians slip into seventh place, behind the likes of South Africa in first place. If one looks to the future, at the likelihood to bank online, Canadians slip a notch further, into eighth place.

Canadians nonetheless strong showing can be attributed in part to the country's consolidated banking industry, coupled with various initiatives to encourage Web banking and easy Internet access across much of the country.

The Angus Reid Group findings show 31% of Canadian Internet users say they are "very likely" to bank online in the coming year, putting Canada's Web banking "adoption rate" at No. 8 out of the 30 countries included in the firm's survey of Internet users. Urban South Africa and Germany lead the pack at 46 % and 42 %, respectively, while the United States - with the most Internet bankers overall - posted an adoption rate of 21 % and a rank of 14th .

"We're finding across the world that as people go online, banking is one of the commercial applications that has an immediate appeal," says Gus Schattenberg, Angus Reid Group global products vice president. "Online banking has a following among users in the most developed Internet markets, but there are even some emergent markets where online banking is carving a niche among the leading edge of users."

At Royal Bank, the survey results reinforced an already solid commitment to Internet banking. "We've experienced exponential growth the last several years among customers moving toward our online delivery channels," says the bank's senior vice president for e-business, Tom Wolf. "This study confirms our own experience: that Canadians are the world leaders in adopting the Internet for electronic banking." Royal Bank signed up its one millionth online banking customer in July.

The Angus Reid survey looks, too, at respondents' inclination to trade stocks or embrace other investment-related services online. Internet users in both the U.S. and Canada were less receptive on this front, with only about one in 10 saying they were "very likely" to trade or make other investments online in the near future. The warmest reception to online stock trading was recorded in South Korea, Singapore and Germany.

Angus Reid Group based its report on a total of nearly 28,400 interviews with Internet users in 30 countries, as well as general consumers in a total of 34 countries, during November and December of 1999 and January of this year.

The company is working on a follow-up study this fall to gauge the state of wireless banking worldwide.

Canadians are the second biggest Internet users, per capita, after Americans. This, coupled with a banking market dominated by six leading banks- versus the 10,000 or so banks in the United States-has helped the online banking cause. Canadian banks often act collectively, having, for instance, pushed debit cards to the point that Canadians are among their leading users.

In the fragmented U.S. banking market, consumers who wish to bank online may be discouraged by lack of availability of Web banking at their own bank and unwilling to switch to a competitor that offers it, suggests Gus Schattenberg, vice president of global products at Angus Reid.

He adds that high-speed connections to the Internet are more widespread north of the border, fortifying Canada's Web banking lead.

-Stefan Wenger is a freelance writer based in New York.

Next Challenge For "Survivors"

howing the initiative of a true survivor, FinanCenter.com took advantage of the recent publicity surrounding the CBS hit television show, Survivor. Tucson, AZ-based FinanCenter.com showed how some of the 135 calculators on its award- winning Web site could be used to project what the Survivor winners' prize money will be worth 30 years from now, under different investment scenarios.

FinanCenter, whose site offers financial product comparisons, found in a recent survey of 35 online banks that their interest rates on certificates of deposits vary by as much as 4%.

The following was submitted by Glenn Weyant, public relations specialist with FinanCenter.com.

After a month on a deserted tropical island surrounded by poisonous snakes, scavenging rats, and back-stabbing friends, the finalists of CBS's hit- television show Survivor are about to face their most grueling challenge yet: What to do with all that money?

With pretax checks of $1 million and $100,000, respectively, the winner, Richard Hatch and runner-up, Kelly Wigglesworth, may appear solvent. However, their wealth could be as fleeting as reality television if they do not plan ahead.

In 30 years, at a consistent yearly inflation rate of 4%, Hatch's $1 million will drop to $308,319, while Wiglesworth's $100,000 empire will dwindle to $30,832.

Fortunately for the Survivors, today's banks have any number of lifelines ready, including tax-deferred or tax-exempt investments, which should guarantee financial comfort for Hatch and Wigglesworth come retirement.

For example, Hatch, now 39, could more than double his winnings in just 10 years using fairly safe investment vehicles. His stash would grow to $2,003,483 in a decade, assuming a 4% inflation rate and that Hatch invests his $1 million in a tax-deferred or tax-exempt investment, such as a 401(k) plan or IRA paying 11% interest, and that he makes additional monthly contributions of $500.

Wigglesworth, though she failed to win the grand prize, could still walk away with a cool million. If the 23 year-old also invests her winnings in a 401(k) plan or IRA at 11%, also makes another $500 in monthly contributions, and we again assume an inflation rate of 4%, she will have $1,284,363 in 30 years.

By that time, Hatch's take would have grown to $7,636,673.

"FinanCenter.com used its tools, which can be found at a majority of prominent bank sites, to calculate the financial options of the Survivors," said Sherri Neasham, president and chief executive officer of FinanCenter.com. "If Hatch and Wiglesworth use tools like the ones we provide, they will continue to both survive and prosper."

P49

Salem Five Gives Auto Branches A Try

By Maria Bruno

alem Five Cents Bank will open its first virtual branch in October, ushering in the start of its bricks-and-clicks strategy for directbanking.com, its Web- based bank.

In January, the $1 billion-asset Salem, MA-based financial institution was initiating the rebranding of its Internet product. In an interview with BTN at the time, Michael Fitzgerald, president of directbanking.com, said Salem Five's Web bank was going to be "a hybrid where we intend to extend the brand with microbranches." These micro, or virtual, branches were to be highly automated and manned with a handful of people.

A few months later, the 144-year-old bank's plans are coming to fruition as it opens its doors in the fall to its first virtual branch in the heart of Boston.

"People are looking for a point of contact," says Janis Dodge, senior vice president of retail banking at Salem Five. "They like the convenience of the Internet, but they still need brick-and-mortar service, even if they don't use it. It gives more credibility (to the bank)."

With more than 6,000 customers and $100 million in deposits, directbanking.com was ranked No.12 on Gomez Advisor's Internet Banking Scorecard, placing it one point ahead of the Web offering of its larger Beantown rival, FleetBoston Corp.

Dodge says its virtual branches won't be anything like what its New England competitors are offering in terms of automated branches. For starters, customers can watch financial news or videos on TVs located throughout the floor. There will also be at least three ATMs with night depositories.

Central to the virtual branch will be Personal Web Banker kiosks. "These are free-standing kiosks with a PC that allows users to access video conferencing with our call center." Directbanking.com customers can access their online accounts and request live help for Web site-related issues via the two-way video feature.

But if its clientele consists of people who bank via the Internet, why the need to access their online accounts in the new branches? Dodge says this is simply a means of offering consumers another point of access. "A customer might want to look at his accounts during the day, and he can do so quickly at the branch," she says. Additionally, while video-based customer service is not available for directbanking.com users on their home PCs, Dodge says there are plans to launch one-way video customer service in the future.

Also at the virtual branches will be what the bank calls Video Banker video conferencing screens. These are separate from the kiosks, Dodge explains. "These will provide customers with access to information from our product specialists from our investment group, business banking group and mortgage lending group at times when there are none on location."

Using technology from Houston-based Zibex Corp., people can open accounts with a representative at the bank's Salem-based call center via video. This includes checking accounts. The unit comes equipped with a scanner that scans customers' IDs and captures their signatures. In addition, micro-encoded checks with a person's name and address are printed on the spot, and it also produces temporary ATM cards. Taking a cue from service-minded retailers such as Nordstrom, Dodge says, "Once a transaction is complete, the call center agent pages someone at the branch to personally thank them for their business."

Along with thanking and greeting customers, staff members will be cross- trained in all aspects of service and on how each piece of equipment works. In the beginning Salem Five will deploy at least three people on site.

Salem Five's strategy of moving its Web offering into the physical world perhaps mirrors an emerging trend of Net-only players like E*Trade seeking a real-life presence with which their customers can interact. It may also reflect the assessment of some analysts that pure Internet financial services firms may find themselves out of business in the future.

Other Internet banks cut deals with couriers like FedEx for express deposit services and the like. Although such a strategy might have saved Salem Five money, (Dodge did not disclose the cost of the virtual branches, though she did say they came within the bank's expectations) she believes people still want service. "We can do more with less staff."

Whether directbanking.com's customers think so remains to be seen. No matter the quality of picture and sound, video conferencing is still not the same as a face-to-face encounter. In the early '90s, Columbus, OH-based Huntington Bank tried a similar scheme using video customer service that did not go over well with Huntington's patrons. But Dodge is convinced people are ready for this. "Customers might not be sure how to use it at first," she says. "So we're going to train our people to educate our customers about how easy and convenient (video) is."

Salem Five does not plan to stop with this one microbranch. It is currently seeking other locations in the Boston area. "We want at least five virtual branches," Dodge says. "The newer ones will probably have less square footage."

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