banking liaison group

electronic banking


What is electronic banking?

Electronic Banking is a generic title that has been used by banks and their corporate customers for some twenty years. Whilst the packages differ, in its most basic form it is a method of retrieving balance and statement information from your bankers via your desktop PC, along with the ability to generate payments, both domestic and international, from the same source. Whilst delivery is normally by branded software via telephone landlines, the internet is being offered as an alternative in many cases, although surprisingly the service is sometimes restricted, and the majority of business and corporate customers receiving electronic information from their bank still use a direct connection with the bank.

What can electronic banking do?

In simple terms it can substantially reduce the costs of generating both CHAPS and international payments and facilitate less urgent automated payments both regular and occasional. The information it provides can also facilitate much closer control over the operation of your bank accounts and their links with your in house accounting systems. It can also provide sufficiently detailed account information so as to produce the optimum interest benefits from your balances.

What can't it do?

Perhaps obviously, it does not generate paper payments. It also does not make decisions for you in relation to, say, investing. Electronic Banking merely provides the information, and abides by the instructions given. Being electronic, there is always the downside of the system 'going down', which may be a problem at your end of the link, or sometimes, at the bank's.

How do I choose a system?

There are considerable differences between the banks' packages. It is extremely advisable to invite tenders and you should ask the banks to demonstrate their systems to you, making sure that all the interested parties in your organisation are present. Packages can vary considerably in price, presentation, services offered and security methods and you should assess your priorities very carefully before choosing from the packages on offer.

Have you any recent experience of a new system being installed?

An exercise was recently conducted with a client which was considering the installation of an Electronic Banking package. Their existing accounting system used manual CHAPS payments, other international payments generated manually, substantial investment decisions made on manual calculations from telephoned information from the bank branch, and paper bank statements from the two banks they dealt with.

The tender they invited, whilst focusing on Electronic Banking, also asked the banks to describe what they could do for them in every area of banking relevant to them, from corporate credit cards to security printing, and to provide itemised pricing for every service provided. As the incumbent bank had serviced the business for 40 years, they really sharpened their pencil and the principal was very pleased with the result.

The variance in Electronic Banking packages caused some surprise. For instance, in some cases the security systems did not suit the principal's preferences, in others the screen was still in DOS and tended towards the confusing, the pricing varied quite dramatically and in many cases some services were simply not included such as providing information on bank accounts held with another provider. The principal was pleased with their final choice and will save a lot of money going forward.


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