Just Thinking

As editors of technology magazines, my co-workers and I are pretty proactive in finding ways to use computers to make our lives easier. Even as Ispeak, we're installing new publishing software that should cut days from our production process.

But go around my office and ask people if they use their computers to bank and you'll get a lot of blank stares. I'd say that less than 10% use PCs to perform advanced banking functions such as bill pay, relying instead on the tried and true paper check and mail system.

Of course, the argument goes, part of the reason for this slow adoption is that electronic bill presentment and payment (EBPP) technology is so new that many banks and billers don't offer it yet, and customers are unaware of the cost and time savings it provides. Given time and exposure, people will see the benefit of using such systems and eventually rely on them for all their personal financial needs.

Still, this does not explain how an office full of people intimately aware of financial technology and its myriad benefits still have little desire to bank electronically. It hints at a deeper problem, which is echoed in the latest adoption statistics for EBPP-the core technology for electronic billing systems. Despite predictions that EBPP would dominate the marketplace by the end of the decade, TowerGroup found that less than 1% of all bills are currently handled electronically, and now estimates that only 29% of all bills will be paid electronically by 2010.

Simply stated, people are aware that EBPP-and through it advanced electronic banking-is available, but are not clamoring for it.

And why should they be? I think for most people, the old paper bill and mail system works fine, and they see no reason to switch. For consumers to embrace EBPP and other second-generation banking technologies, banks must take the time and expense to educate them about its benefits, and create a compelling enough message to spur people into participating.

For new financial technologies to take hold of consumers, banks need to do a better job at marketing and selling-two traditionally weak areas. That is why I question the wisdom of some financial institutions that, in the face of a slowing economy, have decided to cut spending on marketing and advertising but continue to sink money into new technology.

Technology can do a lot of wonderful things. The one thing it can't do, however, is sell itself.