By most measures, 1996 was the year online banking earned a place on the financial services map. Although it was difficult to separate hype from reality, several significant milestones were reached (quarter the milestone surpassed is in parenthesis):

• more than 100 U.S. financial institutions offer PC banking (Q1); year-end total approximately 300
• more than 1,000 financial institutions worldwide on the Web (Q2); year-end total 2,001 (see p. 15)
• more than 1,000 financial institutions in the United States on the Web (Q3); year-end total 1,343
• more than 1 million online banking users (Q2); year-end total approximately 2.5 million
• more than 1 million online stock traders (Q3)
• more than 1 million PC bill payment users (Q4)
• more than 10 million PC-initiated bill payments made in a single month (Q4)

But the year wasn’t just about numbers. It was about a delivery channel that finally shed its image as a failed experiment of the 1980s. It was about leveling the playing field so that small and large companies, banks and non-banks, could compete in the online arena.

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No single event better demonstrated the dramatic shift in demand for online banking than BayBank’s launch in March. At a time when only Citibank and Wells had managed to break the 100,000-subscriber mark (and then only after a combined 20 years of effort), BayBanks shocked the financial services community by booking 100,000 online banking subscribers in just 60 days. That may be a start-up record that will never be broken.

It’s even more astonishing when you consider that just 18 months earlier, in mid-’94, after being available for more than a decade, there were only about 100,000 online banking users in all of North America.