State Farm's bank rolls to the Internet
In May 1999, State Farm Mutual Automobile Insurance Co. opened its first bank branches in Central Illinois and St. Louis. Come Jan. 23 of this year, State Farm will take its bank online and service company employees, agents, and retirees as the initial step toward making State Farm Bank publicly available nationwide.
Currently, only citizens in Illinois and Missouri have access to State Farm Bank services through the company's agents. Those agents have undergone training to aid their customers in choosing home loans, auto leases, and mortgages, among other financial products. Consumers in Illinois and Missouri can also open deposit accounts by contacting State Farm Bank toll-free at (877) SF4-BANK (734-2265). But they'll have to wait with the rest of the country to bank via the Web.
The Internet play
State Farm is banking on the Internet to increase its customer base, and make financial transactions easier. "Initially our associates — employees, agents, and retirees — will be able to open checking, savings, money market, and certificate of deposit accounts, transfer funds from one State Farm account to another, view the details of their accounts, and conduct electronic bill paying via the Internet," says Dick Luedke, a spokesperson for State Farm.
Sometime in spring 2000, however, State Farm Bank will also cater to the general public. State Farm plans to make Internet banking available to everyone at once rather than rolling it into states one by one. Arizona is State Farm Bank's next market, with agents servicing customers "imminently soon," according to Luedke.
But don't read too much into State Farm's Web banking. Luedke doesn't necessarily see State Farm Bank's Internet efforts as a prelude to selling insurance policies via the Web. "We believe strongly in the involvement of the agent, so at this point, we want the agent involvement and our customers do, as well," he says.