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New technology fuels online banking advancements

Technology innovation and the maturation of the Internet as a business tool have changed the banking landscape for small and medium-size businesses. From new Web-based services to enhanced online security, organizations across the country are engaging in a variety of electronic banking functions. Greater operational efficiency, costs savings and transactional security are just a few of the sizeable benefits the online banking arena affords today.

Paul Rodeno

With the proliferation of online bill presentment and payment, companies have routinely transitioned simple and straightforward banking and financial transactions to the electronic arena. Many small businesses, for example, have discovered the ease and convenience of online bill-pay.

Businesses seeking to expand the variety and complexity of their online financial activity will find a number of appealing solutions.

Remote deposit processing

A real advantage of electronic banking for many business owners is the ability to obtain funds faster. To better manage incoming checks and available cash resources, a number of growth-oriented businesses have recently engaged in a new service called remote deposit processing.

Remote deposit processing is a Web-based check image capture, storage and processing system. The offering makes check depositing quicker, safer, operationally efficient and more convenient. No longer is there a need for businesses to take the time to drive to their bank and stand in line to get a deposit confirmation. The role of couriers is virtually eliminated and fewer hands are touching a company's monies, thereby enhancing privacy and reducing risk of loss.

An Internet-enabled PC and a check scanner provided by participating banks are the only tools needed to adopt this innovative service, which brings banking directly into a company's day-to-day operations. Checks are passed through the scanner and transmitted by a secure encrypted Internet connection for clearing. The funds are immediately deposited into the customer's bank account. Financial managers appreciate that every step of the process may be viewed online and that check images are archived for easy retrieval and viewing.

Organizationally, remote deposit processing provides a significant advantage. Companies may work hand-in-hand with their banks to ensure that all transactions are seamlessly integrated directly into in-house accounting software. Critical information will be posted immediately offering businesses tighter control of financial operations.

Improved security controls

As businesses increasingly embrace the online banking arena, financial institutions are spending considerable time and resources to ensure the privacy, security and stability of their customers' financial operations.

New this year, banks nationwide are stepping up their online banking security systems to comply with updated requirements from the Federal Financial Institutions Examination Council. A handful of financial institutions are parlaying this transition into an opportunity to supply customers with superior authentication controls and security assurances.

Reflective of the most advanced online banking technology available today, enhanced online security programs are based on a multifactor authentication system. An upgrade from single factor authentication, the multifactor variety ensures the integrity of online banking transactions while helping to safeguard online banking customers against unauthorized activity.

An integral part of a robust online banking security platform, multifactor authentication provides an additional layer of security for small and mid-size businesses. These advanced systems verify that a user's ID and password are correct and also assess account activity and the computer location normally used. If any unusual or uncharacteristic activity is detected, the bank asks the customer for more information to authenticate the transaction. Additionally, customers identify a picture or watermark as part of the login process.

Leveling the playing field

Managers otherwise reluctant to bring the majority of their financial transactions online may now consider the revised landscape of compelling online banking opportunities.

Importantly, innovative online services like remote deposit processing and multifactor authentication have enabled small and mid-size businesses to select banks that are sized appropriately. Organizations are no longer compelled to choose a national bank with a large number of branches. Technological advancements make it possible for businesses to make banking decisions based on service rather than on geography.

Rodeno is president and CEO of Security Business Bank.

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