Banks that operate exclusively electronically have gained only a small sliver of U.S banking assets, said Gary Craft, an electronic commerce analyst at BancBoston Robertson Stephens.
In a research report titled, "On-Line Internet Banking in the U.S.," Craft estimated that U.S. online banks have a total of $US2.5 billion in assets and about half that much in consumer deposits. The banking industry as a whole is thought to have about $US3 trillion in assets. Craft still believes online banking will prove a lucrative business.
The online-only banks in the U.S. are Compubank N.A., NetBank, Security First Network Bank and TeleBanc Financial. Craft also includes NextCard, an online credit-card issuer that plans to eventually offer online banking services.
Craft said that TeleBanc has moved much of its business to the Internet. The company said 48 percent of its customers and prospective clients now use the Internet to interact with the bank.
Both TeleBanc and NetBank are publicly traded. Security First Network Bank, the first Internet-only bank, spun off its technology division into a separate company, Security First Technologies, and sold the banking business to Canada's Royal Bank Group.
TeleBanc reached a high of $US35.38 on Dec. 29, after hitting a low of just $US8.13 on Oct. 8. NetBank traded at about $US25.25 midday Dec. 29, down from $US31.38 in November.
