Safe deposit boxes have become the latest physical-world service to be reincarnated in virtual form on the Internet.
BankAtlantic Bancorp of Fort Lauderdale, Fla., announced Thursday that it is offering a virtual safe deposit box service to its Internet banking customers. The Internet-only NetBank already offers such a service, and four or five other banks are expected to do so soon. 
The service offers a safe haven for electronic documents, such as tax files stored on a hard disk, that are susceptible to data corruption or loss. The virtual storage boxes also give consumers more convenient access to copies of paper documents that could be stored in real-world safe deposit boxes.
"Basically it's a service we offer because we have the networks and servers [for backup], which our individual customers don't have," said Jarett Levan, president of BankAtlantic's Internet division, BankAtlantic.com. "Think of Florida and hurricane season; this allows our customers to download documents and store them outside their home or their office for safekeeping."
Atlanta-based safedepositbox.com, the provider of the BankAtlantic service, has signed on 6,500 customers since its launch in January. Some of those came through its other client, NetBank, while most found the service through safedepositbox.com's own site.
D.R. Grimes, chairman and chief executive officer of NetBank, said only a few hundred people are using its electronic boxes, which were introduced in January. NetBank has not promoted the service because it wants to test it "before turning it loose," he said.
"I'm glad to see another bank making an announcement now," said Mr. Grimes, a director of safedepositbox.com, which started out as an incubator project of Atlanta-based Intellimedia Commerce Inc. in October 1998. "I look forward to lots of banks using this system going forward."
Safedepositbox.com stores customer files in a secure data center hosted by UUNet, a subsidiary of MCI Worldcom. Scott Clancy, chief financial officer of safedepositbox.com, said the company has a general liability policy with UUNet to cover loss of data. However, since the data are copied in mirror fashion and held in three separate places throughout the country, he said the possibility of loss "is so remote."
The electronic documents are only as legally binding as photocopies, so customers still must hold on to their original versions. BankAtlantic is not offering any guarantee that documents in the boxes will remain safe, Mr. Levan said.
Users digitally upload, fax, or scan their documents using safedepositbox.com's document digitizing technology and a secure Internet connection. Small-business customers can use the virtual box to archive important documents such as employee records, presentations and emails. The customer decides who can access the documents.
BankAtlantic.com is charging $2.50 a month for the box service and is offering six months of free access to customers who enroll from its home page. The boxes come in sizes of 20 to 200 megabytes. A 10-megabyte box will be introduced within two weeks, Mr. Clancy said.
Traditional safe deposit boxes generally have monthly fees ranging from $2 into the double digits, depending on the size of the box.
Jonathan Winer, an attorney at the law practice Alston & Bird LLP in Washington, said the virtual box "sounds like a reasonable business." Provided institutions stand behind the integrity of the documents, he said, it is a "very clever concept and a different way of marketing insurance against theft."
Mr. Clancy said, "The reason NetBank and BankAtlantic are offering this is because it is a value-added service for their customers. They can change the look and feel of the site and put on their own private label."
BankAtlantic.com expands its online product set to five with the virtual safe deposit box. It also offers an Internet certificate of deposit for 12 months at 7%; an interest-bearing checking account which pays up to 5%; an electronic checking account which requires a minimum deposit of $100 and no minimum balance, and bill payment for $5 a month. It is looking to introduce brokerage services this quarter and will launch account aggregation with Teknowledge Corp. in 90 days.
BankAtlantic.com is the Internet banking division of $4.3 billion-asset BankAtlantic, which has 68 branches in Florida and 800 automated teller machines in Florida, Georgia and Alabama. The Internet site became transactional in December, and BankAtlantic.com began to advertise nationally in online banner and print advertisements last month.
Mr. Levan would not disclose how many accounts BankAtlantic.com has, but he said the number of applications submitted online has been "tremendous" and regular call volume has more than quadrupled because of the advertising campaign.
