Net banking first burst on the scene in May 1995, when Wells Fargo added account access to its Web site. Since then, the Net has dramatically effected marketing plans and I/S budgets, but its impact on industry market share has been negligible. Depending on what definition you use
there are six to eight million more online banking users today compared to four years ago. But the vast majority of those, probably 95%+, are still banking where they would have anyway. Doing the math, that means less than 400,000 households have switched accounts due to online banking, just 0.3% of the 85 million or so U.S. households that use bank accounts online or offline.

Don’t be lulled into thinking that trend will continue. The big guns are just being loaded. The first shot came from WingspanBank which, over the next 18 months, is likely to set one milestone after another in a meteoric rise to one million accounts (see OBR 6/99). Furthermore, by the end of this year we expect a half-dozen or so WingspanBank-like entrants will be carpet bombing the Web with credit card offers and banner ads. NextCard, a smallish company by banking standards, puts out 70 million banner ads each day.

Market share will begin to shift away from Net laggards. Nevertheless, there is still time to hold on to your position and even grow revenues via the Net. To support your planning efforts, we’ve updated the annual Strategy Matrix. And for your seadsheets we’ve compiled market-size estimates from the leading research houses and used them to revise our three-year consensus estimates, which have been ratcheted down 20% due to slower-than-expected consumer adoption.