To the Editor,

As a technologist I just could not let the Jan. 4 article “2000 Delivered a Net Gain for Bank Branches” [Review/Preview, page 1] go by without comment.

Good, in-depth article. However, it is full of conjecture about the online banking concept’s weaknesses and does not address these key points:

• 2000 was not a great year for anyone associated with technology. Online banks downsized. Big deal, so did everyone else. It’s wrong to draw conclusions about the industry from this brief period. If I were to look at Wall Street, it would be easy to say that investing is dead, too. Going back further, I seem to remember similar analysis by the radio and movie industries about that newfangled abomination — TV.

• They said the same thing about online retail purchases the first couple of years. It takes time for the word to get out and for value propositions to be clarified. Granted, there are still some people who value the purchase experience over best price, but the mainstream purchaser will go online if the savings are good enough.

• Broadband will have a significant impact. Right now, naturally you’re going to use the telephone or stop by a branch rather than wait for slow downloads and confusing menus. But add an always-on, fast line to your house and it suddenly becomes much easier to use the tube than the phone. Any transaction, any time. Wake up at 3 in the morning and get the hankering for loan product? Just walk as far as your PC and click.

I got DSL last month. I just threw away my paper yellow pages. I no longer watch the weather on TV. I check the state of my commute on my way out the door with a click. The Internet doesn’t change everything — but broadband does.

Broadband is reaching further and further with telco upgrades and new technology (as my COVAD installer remarked, “God never intended broadband to run on copper … but we do it anyway”). And jus wait until new wireless starts getting deployed a year from now. OK, a chicken in every pot and an Internet appliance in every kitchen is still a couple of years away, but it’s inevitable.

Online banking, like online retail needs to gain acceptance. Web shopping got accepted because price and convenience outweighed the annoyance of a slow, lousy user interface. Online banking offers the same value proposition, but the tradeoff against the user interface is not there yet. Technologists must see to it that this changes.

I notice the article does not address the state of business banking, but tends to focus on consumers. The business community is much more likely to (a) have broadband access and (b) be looking seriously at the value proposition that online banking offers.

To date there have been very few serious attempts to capitalize on this market. It’s likely that when the business community starts to discover the joys of online banking, the public will follow suit.

I wonder how this same article will sound five years from now. Probably quite different.

Rich Carlson
Chief technology officer
Bedford, Mass.

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