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Electronic transactions advancing possibility of the paperless office

Banks emerging from a sea of paper thanks to technology

Although we haven’t yet achieved a paperless business world, banks are no longer drowning in a sea of paper. Electronic banking, debit card use, the Check 21 legislation and other technology are decreasing those mountains of paper formerly required to make and process transactions.

Jim Outlaw, electronic vice president and chief information officer for Trustmark Bank in Jackson, believes electronic payments have surpassed paper. “The Federal Reserve of Atlanta has seen a drop in check writing volume of 4.37% over the 2000-2003 time frame,” he said. “Trustmark has been in the 5% to 6% range although checks still make up about 65% of our volume. The Federal Reserve predicts that electronic transactions will grow at a rate of 10% through 2008.”

He says the bank welcomes this change and finds it a more beneficial process for the bank and its customers by lowering the cost to provide services and by the convenience to customers.

“I attribute this shift of more electronic banking to the continued advances in technology and a push by certain government entities to reduce paper,” Outlaw said. “The Check 21 legislation is a good example.”

The Trustmark officer says early adopters of technology tend to be younger customers, but the bank is seeing acceptance across all age groups.

At Hancock Bank in Gulfport, vice president of direct banking Jeff Theiler says electronic banking is definitely growing and that the bank always wants to streamline the process. “It has grown especially in the last couple of years,” he said. “We still have a volume of checks coming through, but the frequency of using checks is declining and the use of debit cards and online bill payment are rising too.”

Theiler, whose position incorporates ATM and debit card use, Internet banking and the sales and service contact center, says the bank still has a high level of work with electronic banking and resources must be dedicated to support those services. “It’s not making less work. It’s just shifting people to support automation,” he said.

He too believes convenience is the main reason people choose electronic banking such as paying for a purchase with a debit card versus writing a paper check. There’s the ability to swipe a card and sign a piece of paper with no inquiries and authorizations required. The amount of time is down to seconds and it’s reliable.

Building momentum

“We have been in the electronic age but now we have momentum.” Theiler said. “The demographics show younger people accept electronic banking faster but older people are too, especially debit cards.”

Although he doesn’t know if banking will ever get to the point of being totally paperless, it’s definitely well on the way. “I might write eight or 10 checks a month. Everything else is automatic electronic debits and debit card transactions,” he said. “Twenty years ago we were saying banking would be paperless but it’ll be 15 to 20 years before we see it.”

The Check 21 legislation further facilitates the process as less and less paper exchanges between banks. Merchants are getting in on the act by immediately converting checks to electronic transactions and handing the voided check back to the customer.

Theiler says people of all ages will become more comfortable with electronic banking and Internet purchases as they realize the transactions are safe. He cautions that the necessary precautions should be taken including guarding information and not giving it out unsolicited.

“I don’t have any data on the frequency of problems but nothing’s perfect, and it’s probably about the same as other types of transactions,” he said. “Internet banking is safe and Internet shopping with a debit card is safe if it’s a reputable company.”

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.

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