Online banking, bill payment on the rise

Online banking and online bill pay are gaining popularity, according to local banks and an industry expert who say that trend is likely to continue.

Elizabeth Robertson, a senior analyst of the TowerGroup, a research and consulting firm with an exclusive focus on the global financial services industry, said "consumers are becoming more comfortable using online bill payment. In general, bill-payment services are secure and they tend not to be a target for fraud."

The percentage of households participating in online banking is projected to be 42 percent for this year, she stated. Online bill payment this year will equal 9 percent of total bill payment, up from 5 percent two years ago.

Thomas Bartram, president and chief operating officer of the First County Bank, which has headquarters in Stamford and 11 branches, says 25 percent of the bank's checking account base for individuals, or 6,000 customers, have an online account with the bank. Of that number, 40 percent, or 2,400 customers, pay bills online. Last year, the adoption rate for online banking was 20 percent, he said.

For business accounts, the adoption rate is 5 percent. The lower number can be accounted for by the fact that the bank started offering online business banking just last year.

Meghan Thompson, spokeswoman for Webster Bank, headquartered in Waterbury and with more than a dozen branches in Fairfield county, said "more than 50 percent of our customers who have a checking account have enrolled in online banking, versus 40 percent a year ago. Fifteen percent of Webster's checking households are signed up for bill pay and 9 percent are actively using it." In comparison, the industry average for bill-pay users is 5 percent of customers, she stated.

Bartram predicts that the adoption rate for online checking accounts should climb and he hopes that the bill-pay rate will increase as well. Robertson said that despite the fact that online bill-payment services are not generally targets of online fraud, there are still substantial security concerns regarding the Internet in general, which will necessarily put a damper on the growth of online bill payment.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.