Online Banking - The Evolution Of Online Banking

While prototypic PC banking systems were first developed in the 1980s, the online banking industry of the early 2000s originated with Microsoft Corp.'s home banking network, introduced in 1994. By 1997, some 4.2 million U.S. households did their banking on the Internet. For several years, online banking was synonymous with PC banking, but this reduction is no longer adequate because Internet-based financial transactions are increasingly used with cell phones and other wireless devices. Indeed, ever more gadgets are expected to be outfitted with Internet and smart-card capabilities, moving toward perpetual connectivity for consumers.

Wireless banking provides all the benefits of online banking without the PC. Wireless bankers can use cell phones and similar handheld devices to do their banking anywhere, at any time. In 2001, wireless banking was more common than PC banking in Europe and Asia. Some analysts expected the same to be true in the United States within a matter of years. Some argued that wireless technology could be the stimulus needed to take online banking from a niche activity to a mass-market staple.

Leading U.S. banks lag behind their European and Asian-Pacific counterparts in offering wireless services to their customers. According to Meridien Research, less than 30 percent of the top banks in the United States provided such service in 2001, compared with about 80 percent of Asian-pacific leaders and 70 percent of European banking majors.