STRATEGIC PARTNERS
Add consultant Del Tonguette to the list of those who believe the Internet is changing the way the world does business. by Kevin Gibson, contributing writer
October 7, 1999
Del Tonguette can foresee a time when we shop online, conduct all our banking electronically -- even get a college education via the Internet. It's something every bank and business owner, not to mention consumer, should keep in mind. You can look out the window of your business and see your competition across the street. But you can't see the competition in New Zealand that is underselling you on its Web site. "It's already here," said electronic payments expert Tonguette, a consultant with Actoras Consulting Group. "It's growing. It is the prevailing new way of doing business. But it's more than just the Internet." The traditional brick and mortar bank should be wary; Tonguette believes an electronic bank would be as much as 70 percent less expensive to operate and would reach a market of millions as opposed to the thousands typical of a traditional bank branch. Aggressive marketing would be a key, with the goal to "commoditize" convenience through time and location, he said. He believes it is already on its way; most people just don't realize it yet. He quotes Bob Dylan: "Something is happening/You don't know what it is, do you Mr. Jones?" Think of it as a convergence of the retail, financial services and telecommunications industries, along with information technology and the entertainment industry. "The convergence of those is leading the charge of e-commerce," Tonguette said. "It's an overwhelming change in the way we do business." As in any new venture, however, there are drawbacks. That is Tonguette's primary concern. "I am a big believer that the time is right for Internet banking," he said. "But I think there are two challenges the Internet must overcome: Security and reliability." Despite ongoing efforts to thwart them, hackers continue to plague the Internet and those doing business over the Internet. It may not yet be safe enough to ask someone to trust the 'Net with their bank accounts. "If hackers can get into the Pentagon," Tonguette observed, "they can get into other places. It is a major obstacle." Reliability isn't up to snuff, either. As an example, someone he knows received an electronic gift certificate to a Web site for his birthday recently. "Imagine you take that gift certificate and you are halfway through the transaction," Tonguette said, "then the computer goes down and you have no idea where you are in that transaction. Have you lost the money? The reliability of the Internet isn't where it should be." He compares it to the infancy of the ATM, when machines would inexplicably swallow cards and not return them or would shut down in the middle of transactions. It's just a matter of working out all the bugs. Because of his views on e-commerce, Tonguette doubts the new mega-ATMs, with their high-performance bells and whistles, will last. "Certainly, voice interaction doesn't bother me; it certainly could help those who are handicapped visually," he said. "But I do question complexity in ATMs. The consumer wants a simple device that can give them cash. That's the sole purpose of an ATM. "I think you will have other terminals that will provide some of these services they are trying to load onto the ATM." Those other terminals might be a kiosk, a home computer or even a mobile phone. "I think the next wave will be touch sensitive terminals," Tonguette continued,"the kiosk terminal where I can choose 'what ifs' and do all sorts of things (with his bank account). But primarily it will allow me to look at my accounts and generate a bank statement." He sees these machines as something to be placed next to a basic, cash- dispensing ATM rather than incorporated into one. "If you are at O'Hare Airport needing to use the ATM, and you have some little old lady checking her balance, there are going to be a lot of frustrated people," he noted.
