Offshore online

One of the greatest advances in offshore finance for expatriates and international investors must surely be the introduction of online banking, says Wendy Shimmin of
Britannia International

Requiring no more than a PC with a decent battery and a telecoms link, online banking offers freedom from the constraints of British bank opening hours (which could be entirely incompatible with waking, never mind working, hours elsewhere), irregular postal services and undecipherable faxes.

Instead you can simply logon at your leisure, review your finances at your own pace and plan your transactions in peace.

So it’s surprising that a full five years after the first flurry of online launches, many banks are still failing to offer an internet option. And even more surprising that take up has, until now, been relatively small.

There are a number of theories as to why something so patently useful has been so slow to catch on.

Security is an obvious factor – the pure intangibility of the web breeds an inherent distrust in many; this in turn is fanned by numerous horror stories circulating about unscrupulous companies fleecing investors of their lifetime savings. Not only has this led to a lack of consumer confidence, it has also made banks wary of the potential reputational risk should they not adequately address security issues.

Inertia is another possibility – does the same malaise that makes investors continue to accept second-rate interest rates lead them to ignore the possibilities of an advantageous change of account management? Likewise has the lack of vocal demand for internet services left banks failing to explore the potential of an online offering?
And then there is also “the personal factor”. Many banks report that, even though it is inconvenient, many expats and overseas savers prefer to correspond with them by post or by phone to maintain the human touch in their banking relationship.

While this is understandable, there is no need for online banking to be an isolated activity. It’s true that in the early days most people envisaged internet banking as a solitary pursuit and that all the way from account opening to closure you would only ever need (and in fact could only ever) talk to your computer.

But there has been an increasing realisation that in fact online banking can supplement traditional banking and, rather than being mutually exclusive, they can actually complement each other. Provided the online system is designed with this in mind, it can be an enhancement of the traditional relationship which works to both users’ benefit. It’s a change in focus from providing an online account to providing an online service.
As a result, more banks and financial institutions are looking at the internet as an additional means of communication, not an alternative one.

The development of secure email has meant that conversation between the customer and their bank can continue – and at a time that’s much more convenient to the customer. Meanwhile online viewing facilities mean that customers can keep up-to-date with their accounts without the hassle of waiting for statements in the post, or the cost of international telephone calls.

The scope of online facilities may vary from bank to bank – from allowing access to account histories to initiating bill payments. There may be some restrictions for security reasons, for example withdrawals may only be permitted to pre-designated accounts. And ‘Know Your Customer’ rules may still mean that accounts have to be initiated by post.

For there is no getting away from the fact that however you choose to run your account, security will continue to be a top priority for both banks and their customers. But just as there are simple things you can do to protect your bank and credit cards, there are equally simple measures that can be taken to keep your online accounts safe. Principally these revolve around the use of passwords, ignoring unsolicited emails which may be used to attempt to extract personal data and maintaining up-to-date anti-virus software. Reputable banks will be happy to advise you on the actions you can take to keep your information secure.

It may require that little bit of extra vigilance, but the rewards – both in convenience and efficiency – are surely well worth the effort.

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