John B. McCoy's 84-year-old mother may never bank on the Internet. But the chief executive officer of Bank One Corp. says he knows plenty of other people who would-enough to make quite a business out of it.

"You have the young using the computer, but you're now seeing 50-, 60-, 70-year-old" people using the Internet, he said.

It is "going to have a more meaningful change on the banking business than anything I've seen to this point in time."

Mr. McCoy is banking on that.

Bank One's First USA unit this month signed a five-year deal to market its credit cards through America Online Inc. The exclusive arrangement calls for Bank One to pay AOL up to $500 million.

The $243 billion-asset bank has reached a similar arrangement, worth $125 million, to market retail banking products through Excite Inc.'s Internet portal. And just last month, Bank One rolled out an Internet banking product that enables consumers to get approval on a home equity loan in less than a minute.

The moves put Chicago-based Bank One-and Mr. McCoy-ahead of the curve when it comes to embracing the Internet, industry watchers say.

Bank One has "one of the more aggressive attitudes out there," said Alexander Stein of Gomez Advisors in Concord, Mass. Though other big banks wanted marketing partnerships with AOL and Excite, Bank One was willing to pay significant money for them, he said.

"Most of the banks are moving very slowly and ceding business to the brokerages," said David Weisman, group director of Forrester Research Inc. in Cambridge, Mass. "Companies that try to jump in late will have to spend more for lower returns."

Mr. McCoy says that will not happen to Bank One.

In a recent interview, Mr. McCoy said he sees the Internet as a medium made for delivering scores of products to the masses.

"There is no banking transaction-other than taking deposits-that can't be done on the Internet," the CEO said. "You do all your payments, you get your loans, you get your mortgages."

Mr. McCoy said he likes the Intenet's demographics. He writes off people like his elderly mom-"she still goes to the branch, and she's not going to use the ATM"-but that's about all.

To make his case, Mr. McCoy rattles off statistics: It took four years for the Internet to reach 50 million households; radio took 38 years to do the same; and last Christmas, retailers logged $8.6 billion in Internet sales, more than three times higher than was expected.

Bank One pioneered with automated teller machines in the 1970s, yet only half of its customers now use the machines, Mr. McCoy said. Debit cards took more than 10 years to catch on.

"The banking business has been driven by demographics," Mr. McCoy said. "Things didn't change very quickly"-until the Internet took hold.

Mr. Stein said that "1998 was the year the banking industry realized the Web just offers so many cost advantages. So many desirable customers were on the Web" that banks knew they had to take action.

At Bank One, that entailed compiling statistics and other strategic information into a three-inch-thick book titled "Consumer Franchise and Internet Strategy." Mr. McCoy also set an aggressive goal for the company: to have 15% of its eight million retail customers banking on the Internet by the end of 2000. The meter is at 5% today.

Bank One was not the first major bank to embrace the Internet. Wells Fargo & Co. made its move for early advantage with a Web-based home banking service in early 1995. But Bank One has gotten into the same league, having signed up 400,000 Internet customers since 1996.

Credit card marketing is one of the main thrusts for Bank One on the Web. Mr. McCoy said the technology could reduce the cost of servicing cardholders by as much as 40%. Whereas it takes at least six weeks to analyze the effectiveness of a direct-mail campaign for credit cards, results of an Internet ad can be reviewed within a day.

"There is a lot of experimentation going on out there as we try to get it right and others try to figure out how to get it right," Mr. McCoy said. "It's not a slam dunk in the next nine months."

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