Online Banks Score

Consultants rank online banks for ease of use, resources, and cost.

Lisa Moskowitz, PC World

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Whether you're a seasoned Internet user or a relative newcomer, making the move to online banking often requires a leap of faith. Entrusting delicate financial data to the Internet can be nerve-wracking. And how do you decide which online bank to go with?

To help you out, Gomez Advisors, a broker consultant group that ranks online brokers each quarter, recently added the Internet Banker Scorecard to its Web site. Based on site evaluation, a questionnaire, and telephone interviews, the Internet Banker Scorecard rates online banks for Ease of Use, Customer Confidence, On-Site Resources, Relationship Services, and Overall Cost.

Surprisingly, not every big bank made the list. The NationsBank Web site, for example, didnt even meet the minimum requirements for evaluation: account look-up, account transfer, and bill payment services. Of the 97 online banks that were reviewed, only 20 made the scorecard.

At the top of the list were Bank of America, Security First Network Bank, Wells Fargo, Salem Five Cents Savings, and Bank of Hawaii. While Bank of America and Wells Fargo are both well-known California banks, you might be wondering what Security First Network Bank is and how it landed in second place. SFNB is an Internet-only bank that's been around since 1995. According to Alex Stein, a founder of Gomez Advisors, early adopters like Bank of America, Wells Fargo, and SFNB know what they're doing and are committed to the technology.

Missing from the list are many of the big northeastern banks like Chase and Fleet. "Large banks want to differentiate themselves with their own proprietary Web sites," says Stein. "They dont want to just buy a solution. But the large number of customers and complex infrastructure means it takes them longer to deliver the kind of technology they want." In addition, many of the nation's larger banks have dedicated their technology resources to tackling the Year 2000 problem, Stein said.

The lack of monster financial institutions on the Web leaves the field open for regional and local banks. For the most part, they license their technology from third-party vendors, then customize it. Smaller establishments like Bank of Botetourt and Busey Bank, ranked number 7 and 12 respectively, are able to offer solid products inexpensively and quickly. If you don't see your megabank listed, consider a local bank's Web branch.

According to Jupiter Communications, the estimated number of households using online banking services is expected to reach 18 million by 2002. With that kind of growth, consumers can expect to see a variety of online banking products. "I'm hearing all the right things out there," said Stein. "Internet banks have the opportunity to compete in the brokerage field, linking your investing needs with your accounts and bill payments. Citibank wants to have a million online accounts by the end of the year. That would be quite a coup."

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