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.
Biggest, Not the First
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.
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 measures the banking institution 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.
Not a Killer App
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.”