Online Banking On Its Way Out?

In a conversation with a banker last week, I asked about his intentions to add online account opening capabilities for his customers. And, this sparked an interesting conversation about the limitations placed on his institution's online banking platform by its core processor (the company also hosts his online banking service).

You see, this banker had been considering adding this feature to his online banking for some time – and he really saw the value in making online account opening available to his customers. But he told us he couldn't add it because his core processing company had no plans to offer online account opening as part of its services to its bank customers. I understand that it takes time to develop these technologies, but it was the rationale behind this specific company’s choice not to offer online account opening capabilities to its bank clients that was pretty shocking.

They told the bank's management that online banking was on its way out. That’s right, they told them that the regulators would certainly kill online banking in the near future, and as a result, there was no reason to make the investment in developing the technology which would allow online account opening.

Online banking on its way out? Seriously? I don't think so.

Consumer behaviors are changing rapidly - especially relative to the Internet. And, today's successful institutions are those that embrace the changes and partner with outside companies who do so as well.