Banking that suits you

You can do it on the train, even in the pub. Simon Read on how to counter the queues

Armchair banking sounds like it is only for the indolent. But if you want to pay bills, why put up with queuing at a bank counter? Or if you need to arrange a loan, why not do it at your convenience, not the bank manager's?

Telephone and computer banking is with us to stay. Look at any high street and see how many bank branches have disappeared. NatWest, for instance, which used to have nearly 4,000 outlets, now has around 2,000.

The same story is true elsewhere as banks encourage more customers to switch to using the telephone. The bank benefits from much lower costs, not having to pay for items such as rent, rates, heating, lighting and staff at individual branches.

Customers also gain. They can conduct their business at a time and from a place that suits them. All they need is a phone.

The concept of 24-hour direct banking was launched in the UK by First Direct in 1989. Eight years later, all the main banks and building societies have introduced their own telephone services. Predictions are that by 2000, one in three people will do their banking direct.

While some 750,000 people have joined First Direct, its parent company Midland Bank offers customers its own centralised call-handling service to deal with everyday requests such as balance inquiries and foreign money orders. "Sophisticated technology has meant that calls are handled expertly at central sites that give us capabilities which could not be reproduced on a branch-by-branch basis," claims Midland's general manager, David Mills. Midland's call centres operate seven days a week, 8am to 8pm weekdays, 8am to 5pm Saturdays and 10am to 4pm on Sundays.

The Co-operative Bank has two direct banking initiatives for its two million customers through its Armchair and Mobile services. Armchair has a 6am to midnight operator service, while Mobile has a 24-hour automatic service that involves pressing buttons on the phone to sort out banking arrangements.

A new nationwide service is the facility to check current account balances through a mobile phone. Called Anytime, Anywhere, it has been set up by the Co-op in conjunction with Martin Dawes Communications, and allows mobile phone users to dial a number to get up-to-the minute details of their current account balance, which are displayed on the phone's screen. It is useful for anyone who runs close to overdraft each month when a simple call could help avoid dropping into the red and facing charges.

Lloyds Bank's phone service is called LloydsLine. Open from 8am to 10pm, it is basically an adjunct to its branch network. To date, only some 60,000 Lloyds customers have signed up for the service.

PhoneBank is offered by TSB, now part of Lloyds Bank group. It has a 24-hour operator service offering all the usual banking facilities plus a range of financial products. While insurances and loans can be sorted out easily, more complicated products, such as personal equity plans, require callers to have an interview with a TSB staff member. However, those wanting best advice would probably be better off talking to an independent financial adviser.

TSB is developing direct banking services in a big way, being the first high street bank to launch a PC-based home banking service in May 1996. This offers on-screen statements and allows payment of bills and transfer of funds between accounts. TSB PC Banking operates 24 hours in online real time, so customers can get up-to-the second details. The only charge is pounds 6.50 a month, the fee for access through CompuServe, the online provider.

Barclays, which has been operating a phone banking service, Barclaycall, since 1994, launched its own comprehensive PC banking service this year. Customers can access it either through a link with Microsoft Money 97 or through a stand-alone Barclays PC Banking service. Customers pay an annual fee of pounds 15 for either of the two main services plus set-up costs of between pounds 30 and pounds 55.

An Internet-access service will be launched this autumn by Barclays, mainly aimed at students who only need basic banking facilities.

Other companies offering phone banking include Abbey National, Alliance & Leicester, Bank of Scotland, Halifax, NatWest, Nationwide, Norwich & Peterborough, and Royal Bank of Scotland.

All direct services, whether phone- or computer-based, face the problem of security. Passwords and PINs are widely used while information sent through a computer is security-encrypted to avoid any unauthorised people getting access. The banks claim that they are constantly revising their procedures to keep ahead of fraudsters and hackers. Whether they remain successful, only time will tell