When the Internet boom began in the ’90s, it didn’t take long for banks to jump on the bandwagon and start offering online services. But more than a decade later, the industry’s Web sites tend to lag behind others in use of technology and innovation.

The Simsbury-based Web Marketing Association, in a report released last week, said the banking industry underperformed in an overall index the association uses to judge Web sites. In addition to the use of technology and innovation, the association looks at the content, design, interactivity, copywriting and ease of use of Web sites. Although the banking industry’s score on innovation and technology was low, its sites tend to score well for interactive features, such as online financial calculators, and are well written.

Web Marketing Association President William Rice said he was surprised at the findings, considering how early banks began offering online account access.

“That was a little surprising to me,” he noted.

Part of the problem is that banks tend to look at their Web sites as a tool for cross-selling to customers, rather than focusing on what the customers need from the site, Rice said.

And banks’ slow move from legacy systems to a server-based environment also stunted online growth, he added.

“Online banking has transformed the banking industry by seamlessly integrating the cross-selling of multiple services to customers who might only have had a checking and savings account in the past,” Rice said in a prepared statement. “Integration with vast legacy systems slowed down initial Web development and allowed several companies to operate successfully in the online world without a branch network. However, most consumers still like to see where their money is kept even if they do all of their banking online.”

Although such problems are prevalent in the industry, the association has recognized some individual banks for their Web sites.

Cherry Hill, N.J.-based Commerce Bank, which has branches in Connecticut, was awarded the Standard of Excellence for the eighth year in a row. The bank has long been known for its convenience, and its Web site in an extension of that, according to Jeff Schlegel, Commerce’s assistant vice president of marketing.

“One of the things we try to do is to have a user-friendly Web site,” he said.

Commerce Bank had a different philosophy about online banking from the time it began, added David Flaherty, the bank’s vice president of corporate communications.

Many banks got into online banking when they realized they could get a return on investment, Rice said. Flaherty agreed, saying they were initially afraid of disenfranchising their branch networks – in which they had invested heavily – but eventually began to believe that online banking was going to replace branches. Some institutions closed branches and started charging customers for conducting transactions face-to-face with tellers.

“Commerce Bank never believed this,” Flaherty said.

The bank looked at online banking as another delivery channel, and developed it within Commerce’s philosophy of convenience.

Since then, many online-only banks have more or less fallen by the wayside.

“You don’t really hear about [online-only banks] that much anymore,” Rice said.

“Brick and mortar is important to customers.”

“At the same time, people don’t go into their bank anymore,” Flaherty noted.

So online banking, and easy-to-use Web sites, remain a key part of the industry. More people do everything they can online, and only go into branches to sign papers, Rice said.

So even with an extensive branch network, a bank without an easy-to-use Web site may get less business than others. Customers may not leave the bank altogether, but may go elsewhere for online needs, leaving the bank with a smaller share of their wallet, Rice said.

‘Millions of People’

Commerce Bank’s Web site is an example of a customer-friendly Web site spelling success for a bank. The bank has one of the highest rates of household penetration in the industry, and 49 percent of customers with checking accounts have voluntarily signed up for online banking.

“It’s very easy to pay bills and transfer money [online],” Schlegel noted.

Schlegel said he believes that the sheer complexity of the banking industry holds back some banks. It is difficult to get all of a bank’s information on a Web site and still make it easy to use, he said.

“I think some of our rivals struggle with that,” Schlegel said. “Financial services, there’s just so much to it.”

There are several strategies banks can use to improve their Web sites. For example, they can look at how customers use their Web sites, using analytical programs to find out what aspects of the sites people use. That can help banks better personalize the experience for customers, Rice said.

Commerce Bank stays aware of how its customers use the bank’s Web site, and continually looks for innovations that may help, Schlegel said.

Banks also need to make sure their Web sites work in multiple browsers. Microsoft’s Explorer is used by about 90 percent of people, but others like Mozilla’s Firefox and Apple’s Safari also make up a share of the market, Rice said.

“That can equate to millions of people,” he noted.

Banks also can start pushing Web site content with RSS technology. RSS is a technology used by public and personal Web sites that allows users to see specific headlines rather than seeking out news or content on outside Web sites.

Additionally, basic convenience can help improve customers’ experience with bank Web sites. Commerce has a 24-hour call center that is staffed with people who can answer questions on the bank’s Web site.

“Of course, as in every industry, there are banking Web sites that stand out and others that don’t make the grade,” Rice noted in his statement. “Our goal has always been to be more than just a popularity or beauty pageant that rewards brand names and good design. Instead, this [Internet Standard Assessment Report] study is designed to return some value to every entrant with input as to what Internet professionals should strive for in their Web site development efforts in an objective, empirical and constructive way.”

The association is now looking for entries for the 2006 awards. The deadline is May 30.