The first generation of Internet banking did not deliver on all its promises of increased revenues, fewer branches, interoperability, open and integrated applications, and an overall reduction in costs, which left banks sceptical about this new channel.
Today, as the next generation of Internet banking unfolds, meeting those unrealised promises is a priority, and clearly understanding what Internet banking can and cannot do is essential.
There is no automatic revenue windfall with the click of a mouse, but cross-selling opportunities do offer significant revenue potential. Customers who adopt online banking are typically more profitable to the bank, stay with the bank longer and use more products, strengthening the bank-customer relationship.
Worldwide more than 100 million households bank online (according to Online Banking Report). In the US, household adoption is as much as 25 per cent - that is almost half of all internet users in that country.
And usage will increase as people become more comfortable with the concept. Banks in general are finding that most people begin using the online functionality for enquires only, and then will try a simply transaction. As they build trust in the in the product, they turn to it for more complex transactions.
So the online banking isn't out to change your money habits. Instead, it uses today's computer technology to give you the option for time-consuming, paper-based aspects of traditional banking in order manage your finances more quickly and efficiently. The personal computers and the advent of the internet gives a challenge for the banking industry.
What is the "Brick-to-click- banks.
Today, most large national banks, many regional banks and even smaller banks and credit unions offer some form of online banking, variously known as PC banking, home banking, electronic banking or Internet banking. Those that do are sometimes referred to as "brick-to-click" banks, both to distinguish them from brick-and-mortar banks that have yet to offer online banking, as well as from online or "virtual" banks that have no physical branches or tellers whatsoever.
