Within the next year plans call for more banks to start letting their customers chart their spending online, make last-minute bill payments from a credit card, check their balances from a cell phone screen, and program automated teller machines remotely.
Some of these changes are being spurred by a desire for a differentiating factor in an experience that has largely become a commodity, and some are being spurred by genuine customer needs and demands.
Analysts applauded the efforts by banks and their vendors to innovate, but they cautioned that customers may not want to use some capabilities that are becoming available, such as online personal financial management, at least to their fullest extent.
"PFM-lite, online banking, and universal money movement are on track to provide a new level of sophistication," said Dan Schatt, a senior analyst for the Boston market research firm Celent LLC.
However, any of these changes, no matter how promising, can be derailed by poor execution and marketing, he said. "Not all implementations are going to be that successful."
Financial management promises to be a prominent theme for online banking this year.
When Intuit Inc., famous for its Quicken and QuickBooks financial management software, announced in November that it planned to purchase the online banking vendor Digital Insight Corp., the buyer said it would weave elements of Quicken and QuickBooks into Digital Insight's software.
Intuit also said it would focus on developing better online banking software for small businesses, which some observers call an underserved market.
Also, CheckFree Corp. is about to launch a pilot test for Financial View, an online personal financial management system it initially announced in November 2005.
Matt Lewis, an executive vice president at CheckFree and the general manager of its electronic commerce division, said the system is "kind of like the features of PFM products that we all like" but is designed to draw data automatically from a customer's bank accounts and present the information online.
Such services are becoming more popular but are not new to the scene. Corillian Corp. started offering one in April, and Wells Fargo & Co. has offered spending charts to its customers through its Web site since February 2005.
Banks and vendors also are introducing more powerful features that give personal online banking capabilities more like those offered to businesses.
For instance, Bremer Financial Corp. of St. Paul plans to start using Family Banking, a Corillian consumer online banking product that includes features normally reserved for business customers. For example, it offers tiered levels of access, which allows some family members basic access, such as viewing check transactions, while reserving other capabilities only for the account's owner.
Thomas J. Ryan, a senior vice president and chief information officer at Bremer, said that even though many retail customers are happy with what they have at home, and many business customers are happy with what they have at work, "where it gets fuzzy, and where the demands overlap, comes in the small business and the high-net-worth individuals," who expect their personal and professional banking services to offer similar capabilities.
Bremer will offer Family Banking to satisfy those groups of customers, Mr. Ryan said; the company does not expect all retail customers to use those features like tiered access.
Payments are likely to be another prominent area for change in online banking.
CheckFree plans to start offering same-day payments through bank sites by midyear by adapting a service it offers through its walk-in bill payment stores. No banks have signed up for the service, Mr. Lewis said, but it will be made available (for an extra fee) through the system they already use.
The service also will let consumers make the payments with their credit cards in addition to their checking accounts.
CheckFree already has one customer using mobile banking software from Firethorn Holdings LLC. BancorpSouth Inc. of Tupelo, Miss., finished its pilot test last month, and plans to offer the software to more customers this year, Mr. Lewis said.
"We're really bullish about the mobile space," he said. "Mobile is definitely happening."
Michael Lindsey, a senior vice president and the manager of electronic delivery services at BancorpSouth, said the results from its pilot were encouraging even though the test group was small.
There were some limitations on the test - for example, users had to be customers of Cingular Wireless LLC, the only carrier that Firethorn has a partnership with. BancorpSouth plans a broader rollout for late in the first quarter.
Citigroup Inc. plans to introduce a mobile banking application early this year, and vendors are promoting ways to make their systems work with existing cell phone features. Yodlee Inc., for example, offers software that provides banking details through a phone's Web browser. Clairmail Inc. offers a service that allows banking transactions through text messages.
Other banking companies are taking different approaches to modifying online banking. JPMorgan Chase & Co. of New York began offering a feature in October that lets a user set ATM preferences (their preferred language, a typical withdrawal amount, and whether they want a receipt) for future visits. The feature is designed to make ATM transactions quicker.
The feature, called QuickChoice, can be programmed at the ATM, but most customers program it from the Web site, said Tom Kelly, a JPMorgan Chase spokesman. "The channels are interrelated."
Though rivals such as Fifth Third Bancorp. of Cincinnati plan to offer a similar service this year, right now JPMorgan Chase considers the feature a way to draw customers to its own bank.
"We view it as a way to both retain customers and get new ones," Mr. Kelly said.
Avivah Litan, a vice president and research director at the Stamford, Conn., market research company Gartner Inc., said some features available today may not take off.
For example, mobile banking addresses a need that may not exist, she said. Though it is pitched as a way to check balances on the road, "it's not like such an emergency that you can't wait to go to your PC to look at your balance." In cases where it is necessary to get that information from a cell phone, "it's so easy to call your bank and get that."
Mobile banking is "a supply-driven kind of feature," where banks think it will lower call-center volume, Ms. Litan said, but even that may not happen. After all, she said, online banking and ATMs did not force the shutdown of branches, so there is no reason to expect mobile banking to replace other channels.
Online money movement also may slow down as banks become more risk-averse, Ms. Litan said, but bill payment will not. CheckFree can actually speed up payments, because "CheckFree's got a pretty contained environment, and they know who the billers are."
But for other types of online transfers, risk concerns are likely to make each transaction slower, she said.
Other features that banks are experimenting with may catch on as niche offerings, she said.
The ATM enhancements by JPMorgan Chase and Fifth Third "make a lot of sense in New York, for example; in congested areas," she said. "If you're looking at suburban ATMs, it's not worth the trouble." Still, "it's a nice feature." Like many other new services, "it will probably take off, but I don't see it as a killer app."
