Headlines:
Web Bank Deposit Rates Rising
Deposit rates at Internet banks are on the rise.
ING Bank, a Wilmington, Del., unit of ING Group NV of Amsterdam, was offering customers a 2.35% return on its ING Direct savings accounts in February, but the rate has since increased to 3%.
In January, Emigrant Bancorp of New York started offering accounts with a 3% interest rate under the Emigrant-Direct.com brand. Howard P. Milstein, Emigrant's chief executive, president, and co-chairman, said at the time that he planned to compete with other Internet banks primarily with higher interest rates; its current rate is now 3.25%.
And the rate on the online savings account HSBC Holdings PLC of London started offering last month has risen 25 basis points, to 3%. An HSBC spokesman said the increase reflects its strategy of competing on returns.
ING has more than 2 million U.S. customers, and Gwenn Bezard, a research director at Aite Group LLC of Boston, said its rate increase was at least partially in response to pricing pressure from the newcomers.
However, ING has strengths besides its rates, Mr. Bezard said. The two new online banks "adds competition for ING Direct, but at the end of the day it's unlikely to be a major threat."
Chris Musto, a vice president for research at Watchfire GomezPro, offered a simple explanation for the increase in deposit rates: The Federal Reserve Board has raised interest rates seven times since June.
Citizens to Upgrade Software
Citizens Financial Group Inc., a Providence, R.I., unit of Royal Bank of Scotland Group PLC, plans to upgrade its branch automation software.
"The primary thing we thought about is, what is the life of a teller like?" said William K. Wray, the chief information officer of Citizens.
Citizens has been using Getronics NV's Aladdin teller software, which Mr. Wray called a "very reliable green-screen application," since 2001. However, early next year Citizens will install the Dutch vendor's GlobalFS software, which uses a browser interface and is more flexible.
GlobalFS is a "system of the future," Mr. Wray said. One of his key goals is improving the customer experience. "If tellers are happy and can do things quickly, then our customers are happy."
