ONE of the most common queries this column receives has to do with finding independent financial advice; least common are queries about the Internet and the World Wide Web. Yet a partial solution to the thorny question of how to save, invest or spend your money safely can be found in the new information services available to every home computer, if you know where to look.
At this moment, personal computer users all over Ireland are checking current deposit rates, investigating pension plans, comparing mortgage rates and inquiring via their computer of ways to save for their children's education or for retirement.
However, up to recently, it was mainly just information that was being shared between user and provider; only a few institutions had developed their web sites so as to permit interactive communications - i.e. a facility which allowed the user to key in certain information and in turn, be offered different financial scenarios.
One of the first interactive personal financial facilities was set up by ICS Building Society in the late 1980s for mortgage customers who walked into a branch with loan queries. A desk top PC recorded the relevant information, calculated the cost of the borrowings complete with insurance costs, etc.) and printed out the calculations to be taken away and considered at their leisure.
Most other societies and bank mortgage offices will provide similar information, most of them on what is known as `home pages' on the Internet. But it took the likes of the First National Building Society (FNBS) to extend that information giving facility to the point where the FNBS now arranges mortgages entirely by Internet. The first such mortgaged was arranged late last year by a Shannon based customer who used the web site to check the different FNBS mortgage products, interest rates and charges, and then to fill in the loan application form. Communications were held via the society down line, though final contracts, it must be said, were signed in person.
The interactive element of First National's web site is mainly devoted to the lending side of its business. Like most of its competitors, its home pages are full of information about other products and services - deposits and investments, insurance, personal loans, offshore deposits, accounts and services for non customers. The society reckons that the use of its Internet facility is increasing by 33 per cent every week, albeit starting from a low base. Up to a third of all its users are based overseas, mainly the US, people who are considering opening non resident accounts or simply tourists checking out best foreign exchange rates. The extension of its banking facility is just a matter of time, the company says.
The most advanced Internet pilot project of its kind is underway at Bank of Ireland where a small group of customers and staff, among other things, are checking their monthly statements, paying their phone and gas bill via their account, ordering a new cheque book and adjusting a standing order. These 40 customers are pioneers in Irish banking, paving the way not just for Bank of Ireland customers, but for the wider banking public. In the US, only a handful of banks have provided such a service and only last week, the Bank off Scotland announced it was going ahead with a fully fledged Internet service. (A few other British banks offer home banking, but to a restricted group of customers.)
Expected to be widened to include all B of I customers capable of using it, the service will gradually include loan applications for mortgages and personal loans, the ordering and paying for foreign currency, etc. "The pace will be dictated by what the customer wants," said a bank spokesman.
The stumbling block to full home computer banking, and one that Bank of Ireland now says it has cracked, has been ensuring account security.
The first step in the elaborate security shield the Bank set up was for the pilot participant to pre register for the service by post and identify the particular accounts they wanted to access by Internet - i.e. current; deposit, mortgage, credit card. They also had to identify any utilities they wished to pay this way; only then were they issued with two new numbers - a unique customer number and a six digit access PIN. Both are held on the Bank's data base in encrypted form so that no one within the bank has access to the Internet account. An extra security precaution means that the account, once accessed, never displays your name or address; instead you give your account a nickname of your choice.
The Bank has not yet decided how much it will charge for its Internet banking service, a spokesman said, but users will be charged the same transaction charges currently in place if you went into a bank branch or used an ATM machine. Undoubtedly, this position will have to be reconsidered as more and more customers and their home computers - undertake the inputting work once done by a bank official. Information web sites are not confined to banks and building societies. Specialist brokers now have their own sites - one of the most useful being National Deposit Brokers `Rateline' service which gives daily updates on deposit interest rates - and many of the insurance companies (including the bank assurers) have Internet sites, loaded with product information and boxes to tick if you wish any further information or contact with a company representative.
At Irish Life, for example, you can even access a question and answer page about various insurance products; your questions will be answered within a 24 hour period, said a spokesman. The Irish Life Finance web site provides interactive repayment calculators for mortgage and personal loans.
The Equitable Life's recently launched web site has gone one step further by supplying its customers with tables that compare its fund performance and charges to those of other leading insurers as well as interactive savings and pension calculators.
Taken individually, the availability of all these different web sites does not necessarily make the job of choosing the best mortgage, the most appropriate deposit account or pension that much easier. But having all this information at your fingertips does make the job of comparing products and charges that much simpler and less time consuming.
As more and more information providers extend the interactive elements of their web sites, so to will they end up having to provide more information about charges, commissions and the performance of their investment funds or accounts. Potential customers who do not get answers to basic questions like, "How well has your managed fund performed during the past 10 years against other managed funds", can very simply move to another company's site in a matter of seconds.
A most recent development and a very welcome one for anyone who has ever tried to find out an Internet address or email number is the launch of Ireland's first Internet directory, E Search.
On line for just five weeks it was set up by Andrew O'Sullivan whose Internet directory address is www.esearch.ie and whose email address is admin.esearch.ie. The fledgling directory already has over 1,200 addresses registered and more being added daily. E search relies on voluntary registration, but both registration and use is free with advertising providing revenue (rather like the Golden Pages directory).
Most of the companies mentioned in this article are listed in the new directory, whether by group or by individual company member, says Mr O'Sullivan.
