High technology consumer banking

Whatever else you might say about the US banking system, it is way ahead of Australian banks in terms of integration with technology. Just some examples:

  • Multi-check ATMs: Bank of America have these multi-check ATMs where you put in a bunch of checks, the ATM scans them and then deposits them with a print out of the check images on the receipt. So easy. That said, it makes errors. Once it reported that a check I had offered was for $50,000 but it was for no such thing. But there is an opportunity to catch such errors (if you wish — and I did).
  • Quicken Online: Quicken has an online and free consumer software service that allows you to check balances and keep track of finances. There is also an iPhone app. The service accesses your banking information and so everything is updated in real time. That said, Bank of America does the same thing too and it can also put my Australian banking details there. So let me just repeat: I can access multiple bank accounts from the same service including Australian banks in the US something that I can’t do in Australia!
  • Quickbooks Online: If you are running a business, Quickbooks online is a great way of managing accounts. You can get this service in Australia but it is PC only — operating in some virtual Microsoft environment — and so it is slow and it can’t interface easily with your bank and credit card information meaning all that has to come in by hand.

That all said, one area where Australia comes up better is bank to bank transfers. Here in the US, the best you can do is get your bank to mail someone else a check. If you want to transfer money between your own accounts you are better off writing yourself a check. It is hard to understand why US banks find this sort of thing so difficult when they get other stuff so right.

8 thoughts on “High technology consumer banking”

  1. I wonder why the banks haven’t used online banking to differentiate themselves by offering money management tools as part of their online banking. For instance it would be useful to have multiple virtual accounts as part of your main account where you could allocate money for different purposes. Maybe the banks are just very conservative by nature. Maybe they see offering such tools to help people manage their finances as against their interests. They seem to have mainly focused on replicating offline processes rather than taking advantage of new possibilities.

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  2. Yes it’s crazy that when someone in the US wants to pay me they send a paper check all the way to Australia which I then send all the way back to the US to my bank there. Americans have told me online that they regard being asked for bank account details as a sign of potential fraud. All this works so much better in Australia and in parts of Europe etc. where I have lived. I see the US as backward. I’m not interested at all in the three features you mention in the post. Electronic payment is so much more important IMO.

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  3. I certainly agree about the problems of bank transfers in the US.  Paypal has filled this hole to some degree, with many people using it to transfer money to friends.
    I have just begun using Yodlee MoneyCenter, which is a free online service similar to Quicken Online, except is also supports managing transactions from most major Australian banks and brokers, and it handles accounts in multiple currencies.  It is the best solution I have yet found for managing my US and Australian accounts and investments, although there is still a lot that could be improved.  (Also Yodlee is the back-end for many other personal finance software programs, including Mint.com and Microsoft Money, so it should be secure.)

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  4. Killing the Cheque“: Jackson et al at RMIT suggest, after interviewing small and medium businesses about their use of cheques, that “the cheque is in its death throes as a payment channel but that a number of electronic payment channels rather than just one are replacing it”.
    Given that cheques have also largely died out here as a personal payment mechanism, why would any Australian bank be crazy enough to invest in ATMs that automatically read them?
     

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  5. Josh, you’ve got this backwards.
    US banks offer slightly better processing of cheque deposits because cheques play a more important role in US banking, and that’s because electronic banking over there is less integrated than here.

    Australian banking benefited from having a unified national telecommunications system in the late 80s, which made it easy for the banks to deploy integrated systems. Accordingly, Australians switched away from cheques faster than Americans.

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  6. As much as I dislike the over-priced Australian banking system, I agree totally with Tony. America has a fragmented system that is cumbersome and often frustrating to deal with. They have some nice technological patches, but they are really only partial fixes to problems we don’t have.
    On the ability to access multiple accounts through one web site, HSBC used to have that facility some years ago in Australia (I used it – financial dashboard, I think they called it), but then they discontinued it. I suspect it had to do with increased security measures taken by banks, such as requiring you to use a mouse to enter a password from an onscreen keyboard, rather than simply entering details using the keyboard (only the latter of which an automated system can do in order to access accounts).

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  7. Australian banks are not doing enough about educating the public and marketing Contactless Card Readers to businesses.  Contactless Card Readers accept payment from Mastercard and Visa in both credit cards and debit cards.  This is for any amounts less than $100.00 without a PIN or signature.  This is a quick method of paying for small amounts that is either quicker than cash or as quick as cash depending on the circumstances.  Australian banks have the resources to implement this payment technology throughout Australia so that it becomes very commonplace and accepted.  Maybe they need to attend to this before adding more technology in future. 

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  8. The things the Americans are better at are private goods, which is as you’d expect given the size of their market. We’re better at the integration – namely payments.

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