Boston Bank Offers Web-Based Safe Deposit Boxes for Electronic Documents

[William Knowles <wk () C4I ORG>]

http://ap.tbo.com/ap/breaking/MGA331W86EC.html

Oct 10, 2000 - 08:04 PM

By Jay Lindsay
Associated Press Writer

BOSTON (AP) - Metal safe deposit boxes have been a longtime staple of
the banking industry.

But that was last century.

With a new federal law that took effect Oct. 1 making digitally signed
documents legally binding, valuable electronic documents are now as
sure to pile up on computer hard drives as their paper predecessors
did in metal file cabinets.

It's only natural that banks would be ready to step in and offer
secure storage havens.

FleetBoston Financial Corp. on Tuesday launched an online safe deposit
box system called fileTRUST, calling itself the first major bank in
the country to offer the service.

The virtual boxes are initially aimed at small business owners and
will offer 24-hour access to whatever digital information a customer
chooses to store inside them.

Regardless of whether Fleet's system is successful, its introduction
by the country's eighth-largest bank could make virtual safe deposit
boxes more widely available, analysts say.

"It doesn't take much time, once large institutions do things, to trip
a domino effect," said Richard Bell, an online banking analyst for
TowerGroup in Needham, Mass.

Fleet's fileTRUST is not unique.

Several smaller banks offer similar services, including BankAtlantic
in Florida, the online bank NetBank and Zions First National Bank in
Utah.

But no bank the size of Fleet, which has $181 billion in holdings, has
invested as heavily in the technology, said Douglas Kilgour, marketing
director for safedepositbox.com. Kilgour's Atlanta-based company sells
a similar service to financial institutions. He said Fleet is the only
bank to have built its own internal system.

Fleet's pilot system aims to appeal to small business owners, such as
lawyers, doctors or certified public accountants, who don't want to
deal with the cost and hassle of creating computer file backup systems
- but need to protect and access valuable data.

The information is electronically stored in the virtual box, which can
be "unlocked" and downloaded 24 hours a day via the Internet.

Fleet touts the box as protection again viruses, system failures and
theft. An identification number and password is required to access the
box. Fleet spokeswoman Alison Gibbs declined to provide further
details about the security measure's the banking instituation has
taken to protect the virtual safety deposit boxes.

Downloaded documents will carry the same legal weight as a photocopy,
said Brian Moynihan, Fleet's director of new-product development.

"It's about ease of use and accessibility," Moynihan said.

Fleet will run a pilot project with about 100 small business owners
through the fall, with plans to make it available to all customers by
early next year. The cost is $11 a month for 40 megabytes of storage-
enough to hold 40,000 pages of text, Fleet said.

Kilgour said Fleet's move shows online banking is starting to expand
past the basics, and offer more sophisticated extras - broadening the
appeal to people who hadn't previously considered it, he said.

But Bell said he doubted features like virtual safe deposit boxes
would lure those wary of online banking.

"I don't think it's a great advance," he said. "It doesn't change any
of the rules. It doesn't offer a compelling service value to get
people to adopt online banking that otherwise would not have adopted
it."

But, he said, it could bolster Fleet's retail banking reputation,
which took a beating during its recent merger with BankBoston.

"Retail banking is about details," he said. "It's one more detail."


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