Paying your taxes may be as inevitable as birth or death, but you need to be able to manage your money to pay the taxman what he’s due. Traditionally, that meant building up a relationship with your local bank through regular visits to the branch to make payments, lodge money, transfer funds and all those other humdrum financial tasks that we all need to do. But does anyone actually enjoy standing in a queue at their local branch?
Let’s face it, the move by banks to what they call multi-channel banking, using technologies such as the Internet, WAP and the good old telephone, is a major plus in our increasingly time-starved society. Instead of banking between the hours of 10am and 4pm at a shrinking network of bank branches, you can have access to your accounts 24/7 from anywhere you have access to a phone, WAP-enabled mobile or Web browser.
People bemoan the lack of a personal relationship with the bank as the downside of online banking. But in fact the world of multi-channel banking is much more democratic than the old days of donning a suit and tie for meetings with the bank manager. If you stay within your overdraft limit, pay your credit card bills and loans regularly and on time, your bank will extend more credit to you even if you’ve never set foot in your local branch.
Online offerings
And the good news is that increasingly you don’t have to lay eyes on anyone at your branch if you don’t want to. All the major banks — Bank of Ireland, AIB, Permanent TSB, Ulster Bank and National Irish Bank — now offer a sophisticated range of online services. At the most basic this involves the ability to view your personal accounts, pay bills, transfer money to other accounts, order chequebooks and statements. What really differentiates their online offerings is the range of other products and services that they wrap around this core offering.
The first step to getting started with online banking is registering for Internet banking with your bank. In general this involves ringing a low-rate telephone number to express your interest; the requisite paperwork is sent out to you and once you return it, you are issued with the necessary PIN numbers and passwords to access the service securely.
According to Joe Heneghan, marketing manager for electronic channels with Permanent TSB (www.open24.ie), over 20 per cent of the its personal banking customers are signed up for the Open24 Internet banking service, something that he attributes to the ease with which customers can sign up. Every personal banking customer is automatically given a registration number that is printed on their ATM/Laser card. The registration number, along with a password and a personal access number (PAN), is one of the three things customers need to log on to the service.
‘Because they have their registration number they can call an 1850 number to get set up with a password,’ says Heneghan. ‘There’s no paper to fill out and they don’t have to go and look up account numbers or other details.’
Security
The registration gives you the combination of passwords and user names and numbers needed to access the service. Remembering all these numbers can be a little cumbersome but it’s worth it for the added security banking customers receive. Security is really not an issue when it comes to online banking. All the high profile cases of credit cards being hacked have taken place at retail sites rather than banks. If you’re not reassured by the thousands of other customers using the service safely, there’s a couple of things you should look for when signing up. The site should use secure encryption — the address on your browser will read https:// rather than http:// — and should be running 128-bit encryption. Digital certificates should be used so you can be sure that you are receiving data from the bank and it is not being intercepted in transit. You’ll know this because the first time you visit the site you should be asked to accept a digital certificate — after that the process should be seamless.
Online banks
Bank of Ireland was one of the first banks to offer an online service — 365 Online (www.365online.com) was launched back in 1997 and now claims to have 308,000 registered customers, carrying out an average of 135,586 transactions per month. While it may have come to the party early the interface looks a little creaky now and a new look site will have been introduced by the time you read this.
In contrast, National Irish Bank (www.nib.ie) is the new kid on the block when it comes to online banking — its service was only launched in late March but has already signed up 4,500 customers. It is based on the same security infrastructure as its parent, the National Australia Bank, so you can be sure the system has been tried and tested.
National Irish Bank also offers the ability to export your transaction history to Microsoft Money or other similar personal finance software, which as Pamela Yeh, media manager at the bank, points out is ‘particularly useful for those running their own businesses’. Even if your own bank doesn’t have a conduit like this, you can work around it by simply cutting and pasting your transaction information from your Web browser into a spreadsheet. You may have to tidy up a couple of the cells on the spreadsheet but this is usually a pretty minor affair and practically every personal finance package on the market provides the ability to import data from a spreadsheet.
One of the neat features offered by AIB (www.aib.ie) is the ability to get a loan online without having to speak to anyone at the bank — a form is sent out to you to sign and once this is completed the money is transferred to your account. ‘It’s not a very lengthy form as we already know who are customers are,’ says Sean O’Connor, senior manager for e-business with the bank. ‘The whole thing can be turned around in a couple of days.’ AIB customers can also register to buy and sell shares online through a service offered by Goodbody Stockbrokers with no minimum balance requirements. O’Connor says that 160,000 customers are registered for the service, generating over a million visits a month. He claims this gives AIB a 50 per cent share of all the people banking online in Ireland, which would put the number of Internet banking users at 320,000 — clearly one of the most popular uses of the Internet in the country.
In addition to its banking service AIB offers a personal finance site (www.aib.ie/personal) which provides general financial guides and tools which are of interest to anyone — whether or not they are an AIB customer. The site is based around events in a customer’s life, such as the purchase of a car, holiday or house, rather than the divisions that the bank is divided into. It also pulls in third-party content — for instance in the car section, it has AA advice, links to an online car showroom and information on the costs of running a car.
Permanent TSB is the largest mortgage lender in the country and is also building up a sizeable personal banking business since the merger of the Irish Permanent and TSB branch networks. Not surprisingly, its site has plenty for the customer who wants to pull down a mortgage. Without even providing any personal information, you get approval in principle from the lender by giving details of your take-home pay and your fixed outgoings, such as car loans and any other personal borrowings. You can also get a detailed quote, organise life cover and home insurance, get information on up front costs such as stamp duty and even apply for your mortgage online.
According to Joe Heneghan, in March this year the site provided 30,000 mortgage quotes in the month, with ‘several hundred’ mortgage applications being processed — a 72 per cent increase on 2002 figures. ‘People are surfing around to see what’s available,’ says Heneghan. ‘The levels of people applying online is also going up as people realise that it’s more efficient than visiting a broker or branch for one hour.’
More beef on the bone
Looking forward, the banks all have plans to beef up their online operations. Permanent TSB will soon allow personal banking customers to view their Visa balances online — a feature that most of its competitors have had for some time. On the mortgage side, it also plans to add more useful tools including a house price ready reckoner, which will use data from Permanent TSB’s monthly house price index. This will enable you to input the value of your house at any time since 1996 and receive a current value based on average prices in your area.
AIB is looking at adding more self-service features that would enable customers to set up direct debits and regular payments themselves. O’Connor says they also want to make it easier to buy products (bank speak for loans, investments and other money making services) online without the need to fill out lengthy paper based forms.
Independent advice
In addition to the bank sites, the Internet is a useful source of independent financial advice. Finfacts, as the name suggests, is a financial portal packed with information on stocks, shares and other investment instruments that will appeal to those with a more complex financial situation. It also has a Mortgages and Homes Loans Section (www.finfacts.ie/fincentre/mortgages.htm), which is extremely useful for the personal customer as it has details of rates and costs of mortgages from all the major institutions. There’s a fair bit of advertising and sponsorship on the site but it’s worth drilling down to find the nuggets of info on issues like stamp duty, tax relief and deeds, which can be confusing, particularly for the first-time buyer. It also has comprehensive sections on life insurance, pensions, taxation and other personal investments.
It’s always good to hear the views of others that have been in a similar situation and Ask About Money (www.askaboutmoney.com) allows you to do just that. It’s a series of discussion boards and articles on topics such as mortgages, tax, property investments and savings schemes that’s extremely active, so you should nearly always get someone who’s willing to offer you their two cents worth.
The Money Advice & Budgeting Service (www.mabs.ie) is a service funded by the Department of Social and Family Affairs that helps those with money problems. The site has a fair bit of useful common-sense information and is a good first stop for those having problems balancing the books. You can request printed advice leaflets to be posted to your home address, but the main function of the site seems to be to encourage you to visit one of the MABS offices around the country.
And in a neat return to the beginning you can also pay the inevitable taxes online — the Revenue Commissioners were one of the trailblazers of e-government. The Revenue On-Line Service (www.ros.ie) is particularly useful for the self-employed as they can submit their annual Form 11 tax return in electronic format. Links are also provided to online banking services for those paying income tax while Laser payments are supported for other payments. Small traders can also lodge their bi-monthly VAT returns and it’s possible to view your current status with the Revenue without having to wait on hold on the telephone all afternoon.
Because the site requires you to have your own digital certificate to authenticate your identity, there’s a bit of paperwork to getting set up with the service, but for those who hate the hassle of paper based tax returns it takes some of the pain out of giving your money back to the government. After all, you know it’s inevitable.
05/08/2003
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