In Thailand, the rudiments of online banking (i.e. retrieving account balances and transaction statements via computer/modem) have been around for more than a decade. Back then, the cashier of the finance company I worked for asked if there was a way to obtain day-end balances aside from having to telephone her opposite number at the various banks. After a bit of research, I said "yes", and soon we were using: a) Chase Manhatten Bank's "Local Access" service, b) an apparently home-grown "Office Banking" from Bangkok Bank, and c) an awful IBM creation which Thai Farmers Bank (TFB) made worse by dubbing "VDO Banking".

Ten years hence, I'm not sure how far these programs have progressed or even if they still exist. As I don't maintain any personal accounts at any of the above banks and since my finance company has exhausted itself into oblivion, the point is moot to me and I don't plan to pursue the matter further. However, for over a year now, I've been using an online banking service from Siam Commercial Bank (SCB) which I believe is worth a look.

SCB's Cash Management

SCB's first foray into online banking was with something called "InfoBanking" which used the same IBM software as TFB (both being major users of IBM "iron"). I remember my wife obtaining the software and asking me to install it on our home computer. Having had unpleasant experiences with TFB's version, I refused. I don't normally have such strong opinions of software, but this one was different, and no, I didn't want it on my computer. Thankfully, SCB eventually transformed its service to a more modern "extranet-based" system called "SCB Cash Management" ("SCB Cash" for short).

(While the terms "internet" and "intranet" are probably well understood, "extranet" is hardly common parlance. An "extranet" is a private network that uses internet protocols and the public communications system. Think of it as part of a company's intranet that is extended to users outside the company, usually by dial-in facilities.)

To use SCB Cash, you naturally must have some accounts at SCB to start with (savings, checking/current or fixed deposits). Next, you need to sign up for the service, which costs 1,800 Baht per year in my case (the cost varies according to the features desired). Soon afterwards, SCB will send you the login and passwords and a printout detailing the accounts which have been registered with SCB Cash.

Hopefully, they will also send someone over to help you set up your hardware and software. If your computer already has a working internet connection, you're practically at the finish line already since SCB Cash doesn't use any proprietary software - only a dial-up networking connection and a browser - and thus should be platform independent. The dial-up connection is created just as you would for any internet service provider. It's important to note, though, that you are not connecting to SCB via the internet, but rather dialing directly into a host computer at the bank.

After you've dialed in, you then run your browser and point it to a given IP address. A few seconds later, you're presented with SCB Cash's login screen. Give it the login assigned by the bank and one of the passwords and you're in.

Online banking represents a leap of faith and before proceeding to SCB Cash's features, let's contemplate security a bit. 1) As mentioned earlier, you're dialing directly into SCB and not accessing it through the internet. Thus, you're less likely to have your session eavesdropped upon by other users. 2) If you look at the bottom left hand corner of your screen, you should see an unbroken key or closed padlock indicating that Secure Sockets Layer (SSL) is in effect. This means that transactions are being encrypted. 3) The only accounts that you can register and therefore perform transactions on are your own. Thus, transfers to/from third party or ad hoc accounts aren't possible. 4) SCB Cash allows you to set levels of password authorization. For example, certain passwords can be set to "view-only", while others can be allowed to perform transfers. Fund transfers are implemented as a "dual control" system - meaning, you need two separate passwords (perhaps held by two people) to effect the transfer.

Features

SCB Cash's core functions include viewing account balances and statements, transferring funds between accounts, paying bills, and stopping checks (figure 1). Most recently, an e-commerce section was added, but this is extraneous to my needs and I ignore it. Month-to- date statements (with transactional details) can be viewed with a lag time of about a day, while a real-time balance (without details) can be viewed at any time. Statements can be requested for the current and past month only. After that, there's no way to retrieve past statements.

Transferring funds, as previously mentioned, requires entering the passwords of two authorized users. There's a service charge of 20 Baht when transferring funds from a current account to a savings account (i.e. from a non-interest-bearing to an interest-bearing account), but not in the reverse direction.

As I've never used either the online bill payment or stop check features, I'll have to skip over them.

Incidentally, a fair amount of non-personal/non-confidential information also exists on the bank's website (https://www.scb.co.th) which is a useful complement. These include products and services, banking rates, stock market previews, economic indicators, financial statements, etc.

Advantages

One of the nicest things about using SCB Cash is that you can perform these transactions on your personal computer without having to go to an ATM, a bank branch, or use telephone banking. Although there are costs involved in using the entire service (150 Baht/month for me), as well as for making certain types of transfers, you can make the best use of your funds by parking most of it in interest-bearing savings accounts and moving them to non-interest-bearing current accounts as needed. To my knowledge, no Thai bank offers "interest checking" as they do in the U.S., although Hongkong Bank's AssetVantage service arguably equals or even betters this.

Another blessing is no longer having to rely on paper statements that take a week or more to arrive after month-end - assuming you get paper statements at all (passbook savings accounts don't get these). If you want, you can square your accounts daily. While I'm not quite that paranoid, I do update my accounts several times a month, normally when my auto-debit notices or ATM slips start to pile up. As a result, my SCB accounts are the only ones I can square away on the 1st or 2nd day of the new month.

Weak Spots

Nothing's perfect and here are a few weak spots I've noticed:

1. Cost. To be fair, 1,800 Baht per year is an incredible bargain for companies - perhaps even too cheap if you ask me. For non-corporate users, I'd be a bit happier with say, 1,200 Baht per year. Just a thought.
2. Design. The home-grown nature of SCB Cash reflects a design which looks less polished when compared to the bank's website, including some awkward English usage. These problems are mainly cosmetic and should be pretty easy to fix. But sooner than later, please?
3. Hours of service. The fact that SCB Cash doesn't operate 24 hours per day (it runs only from 6 am to 11 pm every day except Sundays and bank holidays) may be inconvenient for people who live 24 hour days. For me, it's a minor issue.
4. Glitches. Account updating sometimes doesn't occur quite on schedule. While definitely annoying, I can live with having transactions posted a day or two late, but others (such as company accountants) may not appreciate this and it's not a very good sign. Fortunately, this is the exception rather than the rule.
5. Support. The biggest question mark could be in the area of support. The technical person sent to demo the system to me was - to put it kindly - a bit lacking in hardware/setup knowledge. While I was able to glean the necessary steps from the demo (no documentation was available then either), less computer or internet savvy users may find themselves lost. Hopefully, this shortcoming has already been addressed (at least an instruction booklet is available now, albeit in Thai).
6. A warning. If you're ever asked to type in the IP address https://www.128.1.2.2, be careful to use the form https://128.1.2.2 instead (note the "s'" after the "http"). This instructs the browser to operate in "secure" mode. For some reason, all of the screen dumps printed in the current documentation show the browser operating in "non-secure" mode (note the broken key), meaning someone forgot to type in the "s". This is a security no-no. You can avoid this by first going to the SCBS main menu at https://www.extranet.scb.co.th which will call up SCB Cash in secure mode for you, but this adds a step. It's easier to just bookmark https://128.1.2.2.

Foreign Banks

For the past year or two we've had it pounded into our heads that equity participation by foreign banks is necessary so that they can bring new and improved technology to bear on the Thai financial sector (among other reasons, of course, such as the opportunity to make oodles of money on distressed assets). Presumably this also includes online banking.

Or maybe it doesn't. To begin with, not all foreign banks are interested or engaged in retail banking, the likeliest users of online or home banking. Among foreign banks, Citibank has been the most aggressive in the consumer banking area. Nonetheless, a perusal of their Thai home page (https://www.citibank.co.th) shows no online banking service, although it apparently exists in Sinagpore and at least in some parts of the U.S. Bank of America, meanwhile, doesn't seem to have a local home page at all, and even on its own home turf in the U.S., its "HomeBanking" service is available only to California account holders. (Don't even bother asking how far they've integrated their computer systems with NationsBank, a year after their merger.)

Of all the foreign banks I've dealt with, HongKong Bank's Hexagon online banking service tops my list. It's been around for ages and its features are impressive. The only problem is that it's geared towards professional money managers, not consumers, as its 3,000 Baht per month service fees attest. Gulp!

In my opinion, while most "brick and mortar" banks tend to pay some lip service to online and even internet banking, they're hardly strong proponents of such due to security fears and because they've already invested heavily in their ATM network. On the other hand, I'm sure they're ever fearful of being Amazon.com'ed by some internet bank upstart if they're too complacent. Several such banks have already started service in the U.S., all with FDIC deposit insurance to assuage the queasy. These include: Wingspan bank ( https://www.wingspan.com), NetBank ( https://www.netbank.com), and Security First Network Bank ( https://www.sfnb.com). Wingpsan is perhaps the most interesting of these, as it is affiliated with a real and well-known bank, Chicago's Bank One.

Although these internet banks possess no physical branches, they offer many of the services that regular banks do, such as savings and checking accounts (including interest checking, of course), CD's (i.e. fixed deposits), bill payment, loans, and in some cases, credit cards and brokerage services. What makes them attractive is that because they have no fixed costs relating to physical branches and are very highly computerized, they can offer higher deposit rates (4-6% on interest checking versus 1% at most physical banks) and lower loan rates. Or so the story goes. And of course, the fact that transactions and tracking can be handled securely over the internet.

Before you get too excited, it should be noted that these are U.S. Dollar accounts and all these internet banks apparently cater only to U.S. residents. Also, these days, most U.S. banks require the account holder to furnish a U.S. Social Security number for tax reasons. These caveats effectively preclude most Thai depositors from using these banks.

Me, I'm continuing to keep my eye on local developments in internet banking. With online securities trading expected to go live in the near future, can internet banking be far behind? For now, SCB Cash is a good start and has already taken me part of the way.