| By Jim Bruene on September 8, 2009 5:31 PM | Comments (3) |
One of my least favorite tasks as a business owner is filling out forms, and tax forms are the worst of the lot. Thankfully, Washington state has a relatively simple online form that I can complete at literally the last minute of the quarterly filing period.
So last week, with the midnight deadline looming, I went to download the previous quarter's transactions into our accounting software. After doing so, I noticed a six-week gap in the data. Because of timing issues, it had been 130 days since I'd last downloaded. Guess what? My bank archives only 90 days of data for Microsoft Money users (note 1).
So, I went online and figured I'd retrieve the older transaction there. No luck. Again, only 90 days of past data are visible in online banking. Next, I tried the data-download function. Nope, same 90-day limit. Now realizing that I'd have to hand-key the data, I was getting frustrated, but I figured I could at least view my April and May statements online. Strike 4. My bank doesn't post any estatements online UNLESS you've previously given up your paper statement.
So I had to paw through my paper piles to find the missing statements, then spend a half-hour hand-entering business transactions. Boy, did I feel like a fool. Luckily, I'd started the process earlier than usual and made the midnight deadline; otherwise, the lack of data archives would have cost me more than $300 in city and state penalties.
Fee opportunity for banks
Had I been a perfect customer and remembered to download my data within the 90-day window, this wouldn't have happened. But really, now that you can buy a 1TB (1000MB) hard drive for $79, how can a bank justify a measly 3-month archive, especially for business clients? Even factoring in security costs, backup sites and other expenses, what is the marginal cost to store 18 months of transaction data? A buck per year? Probably more like a dime or less (note 2).
It no longer makes sense to arbitrarily limit online data archives. Put a price on it and let your customers decide how long they want to store their data. Many small business customers would pay $1 to $2 per month per year of back archives. Interested consumers might pay half that, e.g., $3 to $5 per month for a 7-year archive.
It can also be used a perk for going paperless. For example, Chase Bank offers seven years of online statements for its customers (see screenshot below); otherwise, users can access only the last 18 months online.
Finally, it's one of the most cost-effective retention tools imaginable (note 3).
Chase Bank promotes the benefits of going paperless to its online banking users (1 Sep 2009)
Notes:
1. The lack of past data is especially annoying since I pay $5.95/mo for the data download service.
2. I do understand that increasing online archives is not a simple project. And even though storage costs are relatively minimal, the PROJECT costs, are certainly not. I'm sure it's a multi-million effort that's difficult to justify in an era where regulatory mandates eat up IT budgets like a power surge gobbling data.
3. For more info on estatements, refer to our Online Banking Report on Lifetime Statement Archives (June 2005) and Electronic Messaging & Statements (Feb 2003).
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Right. For banks which are used to not archiving old data, it will require a lot of will power to shift to the new system. Particularly there is not much motivation. Not too many people crib about the short download period and least at the time of deciding which bank to use.
@Nicole
Agree. So why not make it a profit center...10,000 customers pay $20/year for premium archives = $200,000 in revenues.
Let's say the project cost $200,000...that's an NPV of a half-million or more, depending on how fast they come on board.
Plus you get intangible benefits: retention, customer service, relationship, etc.
As a consumer I have run into this issue with several institutions and it can be very frustrating. We know the banks keep the transaction records and if I am receiving electronic statements I would like to have access to the statements indefinitely. And although banks are always looking for a profit center I would be very upset if charged for an electronic statement copy even if 7 years old.
On a side note I would really like to see a service like mint.com or intuit that would automatically download my PDF statements while importing transactions so that all statements would be accessible from one site.