BLOOMINGTON — Brigid Nelson has found one way to simplify her life.

She banks almost exclusively online.

“It’s at the touch of my fingers. It’s so easy,” said Nelson, 24, of Bloomington. “In this day and age, no one has time to run to a bank. It’s so much easier to access it online.”

Nelson prefers to bank at home whenever it’s convenient for her, even when banks are not open.

That’s the appeal of online banking, an industry that’s experienced substantial growth and still continues to grow. A 2007 Javelin Strategy & Research report predicts online banking in the United States will grow from 61 million households today to 82 million households by 2012.

“People just have 24-hour access to their money, not necessarily 24-hour access to a banker,” said Michael McFarland, a vice president at First State Bank of Bloomington.

But Nelson still makes the occasional trip to her credit union office, most likely to cash a check someone gave her. Other bank customers prefer to stay away from online banking altogether, maybe because they’re afraid of fraud or they’d prefer to do business with an actual human. Plus, some people consider services like opening an account or getting a loan to be more suited for a face-to-face meeting.

For those reasons, Central Illinois banks are involved in a balancing act between offering more online services while building more bank branches to meet all of their customers’ needs.

Growth in online

The most dramatic changes for banks have occurred in the last 10 years as Internet options grew, McFarland said.

With online banking, customers can track their account activity from their personal computers. Some people will pay their bills online, and others might transfer money from a savings account to a checking account. More advanced users might open an account from their computers.

First State Bank of Bloomington experienced a 50 percent increase in the number of people who signed up for Internet banking just in the past year, said Sharron Fort, also a bank vice president.

Online banking is a necessity for banks to stay competitive today, said Nicole Williams, regional marketing representative for Commerce Bank. Sixty-four percent of Commerce Bank’s customers use online services, she said.

“If we’re convenient, people are going to open accounts with us because that’s what they’re looking for in their banking,” Williams said.

As a nontraditional bank, State Farm Bank also counts on people who are willing to branch out into newer technology, such as online banking.

“It’s critical in a bank in today’s world, especially one without branches,” said Sharon Tarvin, assistant vice president for bank operations at State Farm Bank, based in Bloomington. “We see the Internet as being a very important component of our overall financial picture.”

But it’s also not the only one, Tarvin said.

State Farm Bank customers meet with insurance agents or use the phone service for bank business, too, Tarvin said. Those services are important to the bank’s success because people like to know they have access to a person if they need help.

That’s one of the same reasons why traditional banks still need bricks and mortar — because not all customers want to venture into the virtual world.

Building more banks

To be the most convenient bank for more people, banks want to grow with the area’s population.

Research shows people like to bank within 1.5 miles from their home or work, McFarland said. Even though First State Bank of Bloomington notices less traffic at its branches because of online use, it still wants to build another location in the Twin Cities so its locations remain conveniently located.

Commerce Bank branches on Washington Street in east Bloomington and College Avenue in Normal are busy despite growth in online business, Williams said. That activity indicates Commerce needs another location farther east in Bloomington where the town also is growing, she said.

Commerce Bank’s newest branch on Illinois 9 in east Bloomington is expected to open Oct. 31, Williams said.

And it will hire four new tellers to staff that branch, Williams said.

Meanwhile, the Bank of Illinois moved into its larger office in uptown Normal this spring and also has land on Illinois 9 in east Bloomington to build another Twin City location next year, said Larry Maschhoff, president of Bank of Illinois.

Customers still like to walk into a bank, Maschhoff said.

Not everyone’s online

And the reasons vary.

Before jumping online to pay all their bills electronically, people have to become comfortable with the idea of electronic banking, McFarland said. Once they overcome that hurdle, it’s all the bank can do to keep up with customers’ demands, McFarland said.

Sometimes a generation gap exists between younger and older customers, Fort said. Or an individual may be OK with viewing their account information online, but they but don’t want to transfer funds. It’s a trust issue; they would rather do that transaction in person, Fort said.

Lauri Ludy, 37, of McLean, is one person who doesn’t have that trust in online banking. Ludy is set up with an online account, but concerns about identity fraud prevent her from banking online.

“I’m still kind of scared of the online thing,” Ludy said.

But Maschhoff said the bank sees more fraud related to check use than online banking.

In fact, Maschoff would like to see the bank grow its percentage of online accounts from about 20 percent to 100 percent of customers.

For one, online banking saves banks on overall costs, Maschhoff said.

“Everything about electronic saves us money,” he said.

The Bank of Illinois wants to encourage electronic banking so much so that it designed a checking account with a current competitive 5.5 percent interest rate as long as customers make a minimum number of debit and electronic transactions. The goal is to eliminate the use of checks.

The bank hopes to reduce costs associated with check processing and mailing monthly statements. The bank expects average savings between $3.25 and $3.50 a month per account from an electronic account, Maschhoff said.

“Here’s a habit that’s less expensive for us, and we’ll reward you for doing that,” Maschhoff said. “And the reward is an interest rate.”

But it’s not necessarily easy to change the habits of someone like Fred Moore, 62, of rural Lexington, who doesn’t have an online account and has always banked with a teller.

“I just haven’t changed the habit,” Moore said. “It’s not inconvenient.”

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