Y2K + 1 was a crummy year as many of the things we worried about in 1999 came to pass: terrorist attacks, bear markets, layoffs, and a recession. However, online banking and lending usage surged during the year. At year-end, more than one out of every five U.S. households does some portion of their banking or bill payments online, almost 50% more than a year ago.

Six years into the online revolution, the usual names are still fighting for market share online: Citibank, TD Bank, Bank of America, Barclays, and so on. Despite billions spent on new infrastructure, little net change has occurred in market share. Wells Fargo may have picked up a half-point share of checking accounts in California; the Net-only banks, led by NetBank and E*TradeBank, grabbed a point or two of deposit share overall; the online mortgage pioneers such as Quicken Loans, E-Loan, and the Lending Tree network have gained a couple points of the refi market, and NextCard, Capital One, Providian, and First USA used online originations to wrest a few smidgens of credit card share.

While no radically new innovations emerged last year, some of the new features launched in the late ‘90s began to gain traction: Yodlee’s account aggregation system used by customers of 57 financial companies hit the 1 million active user mark; PayPal’s online payment system grew to nearly 6 million active users in 37 countries; and FirstUSA, Bank of America, and NextCard made it easy for cardholders to transfer balances online. For a complete run-down, see Top 10 Industry Developments of 2001 .

For 2002 we expect continued impressive growth in the use of the online channel for everything banking related: lending, reviewing and paying bills, exchanging information via email, interbank transfers, and routine customer service inquiries. See 2002 Predictions for more.

Along with our usual coverage of online trends, innovations, and products, we’ll focus on four issues during the first half of the New Year: payments, account aggregation, customer service, and email. Thanks for your support.