Research the cash management services available at three ...



Online banking has brought traditional financial functionality into Cyberspace. The Compounded annual growth of online banking since 1994, has been 80%. Worldwide, more than 100 million households now bank online. Looking ahead, usage is projected to increase to 50+ million U.S. households. Worldwide, the total is expected to triple to 300 million or more households (“What is Online Banking?”, 2003).

In brief, Internet Banking enables financial institutions to market and sell new products, increase their end user base and build longer lasting relationships. Launching online banking services requires minimal demand on the banks existing infrastructure and resources. With Internet Banking, the Internet branch serves as the financial hub for end users' online banking needs and strengthens the brand and image. Banks view online banking as a powerful "value added" tool to attract and retain new customers while helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment.

The key benefits of online banking to businesses and consumers are time and convenience. Banking hours or holidays do not restrict online bankers; they have access to their account information 365 days a year. However, convenience is most likely the driving force in the demand and increase of online banking. The client has the ability to transfer funds, pay bills, review account balances, and monitor account history, all from the convenience of their keyboard. Online banking allows clients to bypass the time-consuming, paper-based aspects of brick and mortar and banking hours for more convenience and accessibility at home or work, or even on the road (“Online Banking Report,” 2009).

Today, most large national banks and many regional banks offer some form of online banking. However there are varying degrees of online services offered by banks from the traditional brick and mortar banks who still depend exclusively on personal interaction, to the "brick-to-click" institutions who offer both a physical and online presence, to those who specialize in online or "virtual" banking only and have no physical branches or tellers whatsoever. The challenge for the banking industry has been to design this new service channel in such a way that its customers will readily learn to use and trust it (Ponemon, 2005).

As an example, Internet Banking is offered at Bank of America, Wells Fargo, and Citicorp (; ; ) . In addition to Internet Banking as an example of cash management services though, two other recent offerings stand out: Foreign Exchange for Small Businesses, and an online interactive tool called “Spending Reports and Budget Watch.”

Bank of America and Citicorp offer extensive online banking services, all with the ability to download into Excel, Quicken, or manage with another software application. However, only Wells Fargo, to date, offers both other innovative products, the “Foreign Exchange for Small Business” and the “Spending Report and Budget Watch.”

| |Wells Fargo |Citibank |Bank of America |

|Internet, online banking |$14.95/month consumer for module through |FREE – no disadvantages |FREE – no disadvantages |

| |Office or Qbooks, FREE otherwise, with | | |

| |business package, free | | |

|Foreign Exchange for Small |Free to small businesses, no |Not available real time, fee |Not available real time, fee |

|Business online |disadvantages, may be used as needed |structure is disadvantage, depends |structure is disadvantage, depends |

| | |on amount, timing, and country |on amount, timing, and country |

|Reporting structure and real |Free to online customers, no |Advantage – FREE for simple issues |Advantage – FREE for simple issues |

|time tools for online |disadvantages, may be used as needed. |(stop payments, copies of checks, |(stop payments, copies of checks, |

|customers | |etc.) but no real analytical tools |etc.) but no real analytical tools |

| | |– need to upload into Qbooks or |– need to upload into Qbooks or |

| | |Quicken |Quicken |

Wells Fargo Bank was the 2009 Winner of Barlow Research’s Monarch Innovation Award. This prestigious award was created to honor certain financial institutions that provide the most innovative and consumer driven products to business customers. It is also known to reward risk-takers who create, promote, or exemplify innovation within their own organizations.

What is so unique for this year is that Wells Fargo received two of the four awards. First, For the “Most Innovative Product,” Wells Fargo’s Foreign Exchange For Small Business was a clear winner. This product provides small and medium sized businesses with the tools to make international payments in more than 100 foreign currencies with “real time” exchange rates and settlement by wire or draft. This innovation is available 24/7 and it is accessible for users simply through their Wells Fargo Business Online banking service. One of the Judges for Monarch, Bob Leahy, commented on this product by saying, “I especially liked that this product allows small businesses to print out paper drafts that they can mail to their overseas vendors,” (“Digital Insight,” 2/9/09).

The 2009 “Most Innovative Feature Award” went to Wells Fargo as well for the My Spending Report with Budget Watch. This service was designed so that small businesses can many their funds by comparing total account inflows with outflows on a regular basis. It is really a cash flow management tool, and helps the business find ways to increase saving dollars, reduce debt, and do future planning. Because it is interactive, the business can customize the report directly for their business.

These two awards to a great deal for Wells Fargo. First, they impact their Strategic Plan in showing how a tactical application focused on the small business field can be a powerful tool for gleaning and retaining accounts. Second, since this seems to be the sector Wells Fargo is most “after,” the more innovative tools that can be utilized cost free for small businesses, the greater the potential for growing that segment of their base. This is especially critical in these economic times, and most critical in the global economy when many smaller businesses are doing transactions internationally.

The most innovative of the two, and the one I would choose after reviewing offerings from most other banks that have Internet banking is the “Online Banking Report – My Spending Reports.” This is a free service to all Wells Fargo online banking customers. It actually allows a consumer to “manage” but categorizing spending, sorting, reporting, and using all the data that the customer has in the account. Banks have had the data all along, it was giving the additional value to the customer that has been so innovative with Wells Fargo (See: Henderson, 2006).

With this new service from Wells Fargo, clients, “combine spending transactions from a customer's check card, credit card, checking account and bill pay in one convenient place, accessed through a secured, online banking session and updated automatically each day. Electronic and bill payment transactions are organized by familiar categories such as gas/automotive, groceries, ATM withdrawals, etc.” (Brune, 2005). It is the immediacy (real-time) and ability to keep all transactions in one place, AND do analysis of budgets (how much of our budget did we really spend on food last month), complete with reports that makes this product so fascinating and unique. Clients can now do the same kind of analysis at home that they typically took to a CPA – at no extra cost (“Wells Fargo Offers,” 2005).

These analytical tools, however, are not just limited to one’s personal account. Business accounts can utilize them as well, and in the case of a health-care organization, the use of budgeting and most especially, forecasting tools would provide a unique way to manage and strategically plan. This tool would also work in the decision-making process regarding opportunity costs. With the categorization of budgets, and real time cash flow, decisions are able to be made under the rubric of scarcity and choice. The opportunities present are intangible, many times, but it does take real numbers to ensure the decision is at least applicable In any organization, fiscal analysis and budgetary planning is usually done by the CFO, or the accounting department, and typically takes a great deal of time because all the needed data is not accessible real time. But with this new program, at any given snapshot, one can revisit scenarios and make adjustments and plans for future use of cash, as well as examine a more accurate picture of the business as it is on a daily basis.

References

Bruene, Jim. (February 17, 2005). “My Spending Report,” NetBanker. Cited in:



“Digital Insight, Wells Fargo, and Bank of America Win Barlow Research’s 2009 Monarch

Innovation Award,” (2/9/09), Cited in pr-.

Henderson, Colin. (September 27, 2006), “Online Banking Report.” The Bankwatch. Cited

In: trumps-free-bill-pay/.

“Online Banking Report,” (2009). Online Financial Innovations. Cited in:



Ponemon, L. (April 26, 2005). “Trust in Online Banking.” Computerworld. Cited in:

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“Wells Fargo Awarded 2009 Monarch Innovation Awards By Barlow Research,” (2/17/09),

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“Wells Fargo Offers and Online Personal Spending Report for Retail Customers,” (May 1,

2005). Marketing News.

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