Tag Archives: online banking

Banks Want to Force You to Go Paperless

Two of the banks, including Scotia have now become more aggressive in bullying you to change from mailed statements to online and paperless. That’s your choice – not theirs!

On some of my accounts I want a paper statement. It massively increases the odds that you’ll actually scan it for inaccuracies or problems and I need to keep them for seven years anyway – so I’ll have to print them no matter what.

If you deal with Scotia, here’s what’s now coming up when you log in:

You’ll see that there’s no way to “x” out of it, click a “no thanks” or type in “leave me alone.” It forces you to click it and to go there. But no worries – the 2nd screen needs you to confirm you want to change to ‘online statements.’ At that page, just click on ‘accounts’ and get off that page and you’ve left your settings.

Is Traditional Banking Dying?

Banks have now spent over 30 years getting us out of the branch and onto using ATMs. They’ve also spend almost a generation slowly getting us to use online banking. Those are certainly big changes to the traditional banking model. But when they don’t see you in the branch, it’s much more difficult to sell you products or services.

On the one hand, that’s great news. You can’t be sold something you don’t need, or that’s not suited for you, if you don’t talk to the commission based people in the bank. On the other hand, banks’ profits keep reaching new highs of billions per quarter. Well, that’s because the service charges increase twice a year now and we just take it without firing them.

But how long can this go on? Here are some insights from the founder of a new U.S. online bank called Bankmobile. They’re U.S. stats, but we’re not much different here in Canada:

The average person goes into a branch twice a year, but does 20-30 transactions a month. What’s even more stunning is that the average bank branch opens between 40 and 50 new accounts in a year! That’s it!

The average online banking customer is 27 years old. And I’d bet most of them have never been anywhere else but online.  I recently talked to a 20-something who had never seen a cheque, never had a cheque book, and had no idea what they are, and what they do. He’s not alone – an entire generation has direct deposit and online everything else.

The millennial generation of 35 and under are actually way smarter than us older people who deal with banks. As of an hour ago, online bank Tangerine (bought by Scotia from ING) has a basic savings account rate of 1.1% vs. TD of zero interest until you reach $5,000. Then it’s 0.5% – same as the other banks. So the online banks are more than double the rate and don’t grab your first $5,000 without paying you a cent of interest.

In the U.S., the branch network has shrunk by 10% over the last few years and is expected to shrink another 20% in the next three. The largest nine Canadian banks have 6190 total branches – no change since 2012. Many fewer visits, but still an incredibly expensive branch network. Small wonder they have the highest service charges, up them twice a year, and literally half the savings returns compared to online banks.

Maybe the under 35 generation is helping us all out by avoiding the physical banks in favour of online banking at vastly lower fees and significantly higher savings rates.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

The Future For Online Financial Stuff Is Here

The future is here..well, it’s next door in the U.S.  I deal with one of the smaller U.S. banks out of Florida. When I called last week, it was the usual: Name, account number, phone access pass code, address, and verify the last transaction in your account. The usual 200 step process to verify identity. But then, the lady asked me if I wanted voiceprint access. Yes! She simply took a recording of my voice into her computer and from now on: No more identity questions! The computer recognizes my voice and that’s all they need. Love it, love it!

Setting up online access at Canada Revenue Agency isn’t easy. It’s actually a multi-step process. You need to enter your personal information, and then some trick questions from last year’s tax return that only you would actually know. Then you’ll need to call their Winnipeg Tax Office to answer some more questions based on your last return. At that point, they’ll send you a code to enter and you’re set up. The first thing I did when I had them on the phone is to thank them for all that security. The guy was a little surprised, but if you’ve heard any of the I.R.S. horror stories from the U.S. you’d be thankful, too, as the IRS lost $21 billion to fraud last year.

Finally, get ready for something called two-step authentication. In the old days, or now ending days, you just needed to log in with your user name and password. That’s rapidly changing to add a second step to verify it’s you and not a hacker. The second step will be to send you a text on your phone, or an email with a code number that you need to enter. It’s already the law with Amazon for sellers, and will be for banks, Ebay, and many others. When you enter that second step, it’ll let you into your account. You can tell the system to “keep” this number if you’re always at your same computer. However, when you do a clean up on it, you’ll need to get a new access code again.

It’s a bit of a pain, but in the big picture of financial accounts, or companies where you can spend money online, and who have your credit card information, it’s well worth it!

Goodbye ING

Last month, Scotiabank purchased the on line bank ING Direct Canada for $3.1 billion. This un-bank as they called themselves started in 1997 and grew to 1.8 million customers through great savings rates, which were often double that of the big banks, competitive mortgage rates, and a lot of innovation.

Around the world our six Canadian no-service big banks are knows as being rather conservative. In some ways that was a blessing in the banking meltdown, but they’re also turtles in any innovation and modernization. Recently we talked about the technology that lets you just scan a cheque on your smart phone and have it instantly show up in your account. No need to head to the bank, just scan and done. Well, two of the banks had never heard of this when I contacted them. I guess they don’t watch TV as almost every US bank now has this in place already.

ING was instrumental in getting all North American banks to focus on on-line banking, customer service and the likes, or they still wouldn’t have much of it. Two of the biggest changes caused by ING’s success are just rolling out: Paypal, which everyone under age 30 is familiar with, is teaming up with Discover to become a bank. Plus, Amex and Wal Mart are in a joint partnership and will offer banking to the 40 million Americans who do not have any bank accounts. They’ll be able to get a pre-paid debit card, actual cheques, and be able to do all their transactions at any cashier in any Wal Mart. No fees, no overdrafts, no minimum balances – and it all started with ING leading the way.

Now our Canadian banks can slow down again, because one of them took out ING. Scotia won’t be continuing their operation and ING will disappear. Hopefully, if you were one of their customers, you’ll switch over to President’s Choice. Unfortunately it’s one of the only on-line banks left, even though they’re owned by CIBC.

Competition is great for us consumers. Unfortunately, another one bites the dust, and we’re all going to be worse off as a result. Scotia is betting they can retain most of these 1.8 million customers. But with all the banks, you have to remember that your loyalty will never ever be rewarded. The longer you deal with them, the more you’ll be taken for granted.

But the last thing we do is to shop around for a better rate, much lower service charges, or a place where it doesn’t take an appointment two days from now to see someone.