Your bank may soon be as near as your home computer
As Bostonians rummage through the local papers this week, clipping coupons, the Shawmut Bank of Boston hopes its coupon will not be missed.
The bank is searching for 100 personal computer owners. It wants them to participate in their electronic home banking pilot program, the first such test in New England.
Electronic banking doesn't eliminate all trips to the bank, but it does offer such conveniences as viewing up-to-the-minute account balances; automatic bill payment; and transferring funds from one account to another. In the near future loan processing and brokerage services from banks will be accessible from home too.
The Shawmut pilot program is one of about 26 home banking tests across the country. Chemical Bank in New York last week announced plans to make its system - called Pronto - commercial by the end of the year. Citibank, Bank of America, and Chase Manahattan Bank are among the major banks testing the idea, and a few regional banks are also trying it out.
In all, nearly 2,000 Americans now bank at home by computer, says Robert Wells of the Yankee Group, a consulting firm specializing in communications and high technology. Mr. Wells estimates 8 million households will be banking via home video computer by 1990.
In the Shawmut program, Atari and Apple computer owners will have access to their accounts through CompuServe, a large data bank based in Columbus, Ohio. Users will link up with the CompuServe by telephone. CompuServe will then switch them to the banking service. After entering a password, users will be able to choose from a menu of banking services shown on their video screens.
The service will be available around the clock and will give such information as location of the bank's automatic teller machines (ATMs) and dates and amounts of cleared checks. For bill payments the user must tell the bank, in writing, which merchants are to appear on the bill-paying list. Then the user types in the amount and date of the amount to be paid to his or her account with a particular merchant.
Users will also be able to send messages to Shawmut via computer, learn current rates on loans and certificates, cancel checks, and eventually have access to the bank's upcoming brokerage services.
John Farnsworth, Chemical Bank senior vice-president who heads the Pronto project, says fear is a major roadblock preventing consumers from fully accepting the idea of electronic home banking. ''They are afraid . . . they, or the system, will enter information incorrectly,'' he said. Also, people fear electronic theft.
But with passwords known only to the user, bankers say the chance of tampering with accounts is minimal. ''Besides,'' said Mr. Farnsworth, ''even if someone discovered your password, once in the system you can only move money between your accounts. It can't be rerouted to someone else's.''
United American Bank of Knoxville, Tenn., began testing home banking in early 1981. The bank sold Radio Shack TRS 80 color computers to people wanting to participate in the test.
''After three or four months of testing, the program became a full product and is now up and running strong,'' said Michael Bridges, United's product manager for banking at home. The bank charges a flat rate of $5 a month to its 500 subscribers, some of whom bank from out of state, Mr. Bridges says.
Linda Turner and her husband bought the TRS 80 from United American last September. ''The banking part is very simple to use,'' she commented. ''The main thing I like is paying the bills. It takes maybe 30 minutes a month to do everything. The only problem is . . . I never know when it reaches the company.''
Mrs. Turner said she and her husband wanted a computer anyway, ''but if banking had been the only feature (available on the computer) we wouldn't have bought.''
Most analysts agree there is no market for a service that offers only banking features. ''Research shows home banking as the only service doesn't cost-justify the system. So banks link up with other (data bank) services (such as Compuserve , ADP Inc., and Tymeshare) that include shopping, home security, and news,'' said Robert Price, who tracks home banking for Trans Data Corporation in Cambridge, Md.
First Bank System in Minneapolis reached the same conclusion. In June, it began its test program in Fargo, Wahpetoncq, and Valley City, N. D. Banking features are secondary to agricultural information.
''In this area, people are interested in analyses, markets, news, weather, etc. that may effect their crops or livestock. If (the agricultural community) becomes more profitable, then we can keep more customers,'' explained Wendy Boloum, spokeswoman for the bank.
Consumers may question the convenience of home banking since it's hard to avoid a trip to the bank for deposits and withdrawals.
''You can't put a printing press in the home that will roll off crisp $20s, but some banks will find a way to print cash equivalents,'' said the Yankee Group's Mr. Wells. ''You may be able to order (on a computer) Citicorp travelers checks that are electronically presigned and have them sent to you,'' he said.
Chemical Bank's Mr. Farnsworth says the proliferation of ATMs means people rarely have to go to banks. Most banks involved in electronic home banking are also beefing up their ATM services. ''And there is a growing proportion'' of employers who automatically deposit paychecks in employee accounts, he stated.