Number: RL31327
Title: Internet Banking: Changing Expectations and Regulations
Authors: Walter w. Eubanks, Government and Finance Division 
Abstract: Despite the surge in customers signing up for Internet banking in the aftermath of the 911 attacks on New York and Washington and the anthrax scare that followed, Internet banking is not growing as fast as expected before or after the attacks. A main reason is consumer confidence in and familiarity with the paper-based payment methods of cash and checks. Many smaller banking institutions viewed the prospect of Internet banking as providing opportunities to expand their services beyond their brick and mortar establishments and compete with larger banks. But the fixed cost of establishing transaction Internet sites is having a greater impact on the bottom lines of smaller banks. To overcome this problem, Internet bankers might be waiting until they have a critical mass of users before imposing or raising the user fees on this channel to banking services, as they did with automated teller machines (ATMs).
Pages: 9
Date: Updated March 12, 2002