INTERNET BANKING: A TECHNOLOGY IN SEARCH OF ACCEPTANCE
On January 21, 1997, the Royal Bank Scotland announced that it had completed the technological fine-tuning and was now Britain's first fully-fledged Internet Bank (1). The announcement generated the suspected editorial comments that suggested that retail banking is dead, and that a brave new world of cyber transactions are the wave of the future. Is Internet Banking the trend to watch out for?
That's the leading question behind the banking industry's
top-to-bottom redesign of the entire retail operations of some of the world's largest banks, a concept some analysts are calling "Future Banks." This concept is a mix of all the elements believed necessary for banks to survive onslaughts from brokerage firms and mutual-fund houses and from industry consolidation and technology (2).
Most of these banks are developing aggressive, sales-oriented cultures and going after new customers with new banking channels. The Internet banking concept is the most visible of these channels, the most confusing, possibly the most profitable while at the same time possibly the most dangerous (3).
This paper will examine that potential danger by exploring: (a) the history of Internet Banking, (b) the banking industry's commitment to Internet Banking, (c) the technological implications, and (d) an analysis of the reasons that the technology is available, but will probably not be widely accepted or used by the general public. This flies in the face of most research, including that of Booz, Allen, & Hamilton, the management consultants, who report that up to 16 per cent of US households will be using Internet banking by the turn of the century (4). Those figures might be correct, but do they suggest the future? Part of the answer lies in the past.
The generally-accepted definition of banking suggests that it is the business of dealing in money and instruments of credit (5). ...