Standard Bank's Internet banking division has matured into an important part of the bank's overall strategy. It now has 287 000 individual accounts, a rise of 60 000 account-holders who transacted a total of R8 billion worth of business last year.
This is according to Standard Bank's head of Internet banking, Louis Blom, who spoke to ITWeb following the release of the bank's annual results earlier this week. In the year ended 31 December 2003, Standard Bank recorded an increase of 19% in headline earnings to R6.248 billion.
Blom says the actual contribution made by Internet banking services to the bank's overall bottom line was difficult to determine because the accounting was based on the various product categories rather than the transaction channel.
However, Internet banking had clearly become important as part of the overall strategy. Because security remains an important issue, Standard Bank has announced an extension of its free McAfee anti-virus and firewall software to its individual clients.
The opt-in offer is open until August 2005. About 44 000 Standard Bank clients took up the offer since it was first made in July 2003, following the "Absa hacker" scare.
"Many of our individual clients do their Internet banking from work, and often that company already has the necessary software in place. Others already had some kind of anti-virus and firewall protection, and they are just waiting for those licences to expire," Blom says.
Business is booming
Standard Bank's Internet banking offering for its corporate clients through its "Business Online" service currently has about 20 000 companies transacting online, carrying out R275 billion worth of business online in December last year alone.
Blom says Standard Bank has invested about R100 million in its online services over the past five years, but says he expects the capital expenditure to slow this year as the bank consolidates the infrastructure it has put in place.
He says the growth in online banking will not detract from the services offered by the bank's branches and, if anything, may contribute to a growth in the physical branch network.
"People use the Internet for information, but use the human interface at the branches for advice," he says.
Internet banking is more cost-effective than branches to supply routine information such as statements on an as-needed basis. "It is still very difficult to work out when the Internet banking side is more cost-effective than a branch. However, it is part of our strategy to give our clients the ability to do self-service banking almost anytime they want to," Blom says.
This is not for 'bancassurance'
Standard Bank's tie up with insurance group Liberty Life has given rise to the "bancassurance" mode where the insurance products are cross-sold through the bank's branches.
"Internet banking is not really suited to this, so we don't see a rise in the number of products being sold through our Internet banking portal. Bancassurance needs the human interface," Blom says.
'Phishing' for spoofs
Spoof sites and "phishing" attacks are the next biggest threats to online banking security after identity theft. Blom says the number of "phishing attacks", when criminals probe a bank's systems looking for a weak point, has increased worldwide.
"In some ways, South African banks are fortunate in that such criminals would prefer to attack overseas banks where there is a possibility of obtaining a foreign currency," Blom says.
He says Standard Bank has worked with foreign government law enforcement agencies to close down a number of "spoof" sites that were designed to look like its own Internet site and to lure customers into making transactions there.
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