"I'd rather do it myself!" (Feature).

• Author: Gerson, Vicki
• Position: Online banking

Banks are frying to figure out how to service the growing number of online banking customers who prefer to conduct ALL their financial transactions on the Internet. Many have concluded that 'Web self-service' is not only the answer, but also an innovative way to differentiate their institution.

To see the future of online banking, look at the airline industry: About 50 percent of all airline tickets in the United States are now booked on the Internet. The soaring statistic suggests that someday bank customers also might use the Internet about half of the time to conduct their financial transactions.

Today, regional and large banks are enhancing their websites with "self-service" capabilities in preparation for that not-too-distance day. Self-service, theoretically, would allow customers to conduct almost all of their banking interactions through the Internet--and without the need to ring up the call center or visit the branches.

Self-service also promises to cut those unpleasant service costs: If customers can get all the information they need from the bank website, they won't speak to the call center as often.

The bank's overall service quality would improve, notes Richard Bell, a senior analyst with Meridien Research, Newton, Mass. His company researches financial-services technology issues. "Banks today are offering a wide variety of sophisticated products and services. But, not every person in every department knows everything about these new, complex products. One way to do a better servicing job is to centralize all that knowledge on the Web--in a way that it is easily accessible to the customer."

At the moment, with only about 5 or 10 percent of customers using online banking, the quality of Web self-service is relatively low. But Bell expects that level to rise over the next 18 to 24 months as online utilization rates increase and as financial institutions begin to see the benefits of enhanced self-service capabilities. "It won't happen overnight," says Bell, who recently authored a report entitled, "Web Self-Service: Helping Consumers Help Themselves." "But, there are some real advantages. It's a way to differentiate your bank."

The most common form of self-service technology is the search engine. But banks are experimenting with a variety of other technologies, using different approaches to respond to diverse types of questions.

Below are five common self-service approaches, with information about how each is being utilized.

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