FRAMINGHAM (03/06/2000) - Bank of America Corp. announced today that more than 2 million customers have signed up for its online services, making it the first bank to reach this milestone.
The Charlotte, N.C.-based bank, the second-largest in the country, has more than 30 million retail customers across the country, meaning that around 7% have signed up for online services.
But the 2 million mark is nothing to get excited about it, said David Stumpf, an analyst at A. G. Edwards & Sons Inc. in St. Louis. "It's still a small percentage" of total customers, he said.
According to Bank of America spokesman Scott Scredon, the bank is ahead of the competition not only because it has a large customer base, but also because many of those customers are concentrated in California. In fact, Bank of America is the largest bank in California, Scredon said.
"Online everything is probably more popular there than in any other state in the country," he said. "That helps us quite a bit."
Bank officials wouldn't say how much online banking was costing - or saving - Bank of America, other than that it requires a "tremendous" initial investment to get the system up and running.
But senior vice president Susan Baumann said online banking is already bearing fruit.
"We're finding that customers who have online banking have more accounts with us, are more profitable, and stay longer," she said.
In January, the bank broke an internal monthly record by signing up 125,000 new online customers. Previously, the bank had been signing up 80,000 to 100,000 new online customers per month.
"The trend is now very favorable," Scredon said, adding that customers were demanding online access on their own - without any aggressive marketing on the bank's part. "There really is increasing awareness that Internet banking is one of their options."
He added that the bank hopes to have 3 million customers by the end of this year. Bank of America's online customers can do everything from paying bills to investing online.
Online banking "gives people a convenient way to do all of their banking," said Scredon, adding that fully half of the trades from the bank's discount brokerage arm are performed online.
In the future, said Baumann, the bank plans to offer wireless banking through Palm VII devices and more e-commerce services through its Web site.