Pure Internet banks are doomed

NEWTON, Mass. (BUSINESS WIRE)– Online banking — whether through a PC, mobile phone
or Palm Pilot — is “no longer a competitive advantage but rather a competitive
necessity,” says a comprehensive new report from Meridien Research. But traditional
banks are best positioned to take advantage of online banking because customers
expect access through branch offices and ATMs as well. “Pure online banks are
beginning to look like failed dreams,” write analysts Christine Barry and Jennifer
Schmidt. “Despite offering high interest rates and low fees, they haven’t flourished
because today’s consumers are looking for greater convenience as well as value-added
services from their institutions. Successful banks see online banking as just
another channel–though an increasingly crucial one.” Meridien forecasts the number
of active Internet banking users worldwide will grow from 23 million today to
32 million in 2003. Most are in the United States and Scandinavia.