Banking by personal computer took a significant leap ahead in 1997.

According to the American Banker-Gallup consumer survey, the percentage of PC-owning customers who said they had performed on-line banking transactions doubled.

The trend confirms what some high-profile home banking proponents have been claiming. But the statistic is smaller than that of some individual purveyors because home banking remains mostly a big-bank phenomenon.

Leaders in the business say 10% to 20% of their retail customers have signed up for PC banking; the American Banker results put the figure at 12% of home PC owners, or 6% of people who maintain at least one type of financial institution account.

Assuming that the survey is representative of about 80 million of the 105 million U.S. households (the "unbanked" are excluded), 4.5 million to five million have at least tried PC banking-a number at the high end of prevailing market research estimates.

That is well on the way to the 10 million to 15 million that firms such as Booz-Allen & Hamilton, Forrester Research, Jupiter Communications, and SRI Consulting have projected will be doing on-line banking within two to four years.

Anecdotal reports are that half of enrollees are active PC banking users. "I'd say two million to 2.5 million would be a good current number," said Paul Harrison, president of Meca Software LLC, the bank-owned personal finance software venture based in Trumbull, Conn.

"Thanks to the Internet, we have definitely seen a tremendous increase in the number of people who try it or at least use it once a month," Mr. Harrison said.

These numbers suggest banks are holding their own against brokers like Charles Schwab & Co. and E-Trade Group, which appeared to steal the march in on-line relationships with a number of recent and successful Internet offerings.

Three out of four households with incomes above $75,000-the key upscale battleground for financial and other services-had PCs this year, and an impressive 18% of those reported doing banking transactions at home.

To be sure, there are still major obstacles to mass acceptance. Aside from the gap between the number who enroll in on-line banking programs and those who become faithful users, its appeal is demographically determined- skewed toward youth and high incomes. And PC household penetration is unlikely ever to approach 100%.

Perhaps more troublesome, the number of PC owners who said they are interested in on-line banking declined this year, to 44% from 52%. Most of that change was in the group "very interested," to 17% from 23%.

Carole Hewitson, vice president of the Gallup Organization in Irvine, Calif., said this could be an indicator of a market nearing its potential: "It means more of the people who are going to do it are doing it, and there is less residual demand."

The mountain that bank marketers have to climb is measured by the fact that far fewer financial consumers have used PCs for banking than for access to the Internet (37% of all in the survey, up from 29% in 1996) or to on-line service networks (23%, up from 17%).

A majority of the 367 PC-owning Internet users in the survey, or 20% of the total sample of 1,001 heads of household Gallup interviewed in October and November, said they had gone on the Net to make purchases or commercial inquiries, which do not require connecting to a bank. That figure rose from 13% last year.

Yet it is clear that PC banking is making headway and the banks that got in early have a foundation to build on. In the 1996 American Banker/Gallup poll, only 6% of PC-owning financial consumers, or 3% of all responding households, had performed on-line banking transactions. There was no appreciable change from 1995.

Helping fuel the doubling to 12% of the computer owners was the rapid growth in home PCs. Half the financial-consumer households now have them, up from 48% in 1996 and 44% in 1995. Four-fifths of the PC owners, or 39% of all households in the survey, have the modems necessary to reach the outside world, a 50% increase in two years.

PC owners who have used the Internet jumped to 73% from 59% in 1996 and 35% in 1995. The Internet may be exposing more and more people to on-line banking, even if they may not become regular users.

"Thousands of banks have home pages," said William M. Randle, executive vice president of Huntington Bancshares, Columbus, Ohio, which has attracted an undisclosed number of customers from all 50 states since going on the Web. He said the industry as a whole still has a long way to go because "not too many of those Internet banks are really offering banking services."

Robert B. Hedges, senior vice president of Fleet Financial Group in Boston, viewed the Gallup banking percentages as conservative.

"We have consistently seen reports in the 15% to 20% range, but we have to keep in mind that people responding to surveys will define PC banking differently," Mr. Hedges said. "I suspect that 15% of our customers don't do PC banking all the time. They may do some transactions, they may be using the Web to get information, they are coming to rely on the Web for conducting their financial lives.

"The real headline here is the growing role of on-line access in consumers' financial lives. Regardless of the extent it includes banking, it is the centrality of the PC in more and more households."

Tapping into that, Fleet has 75,000 PC banking customers and expects a doubling in 1998, Mr. Hedges said. And that has come with minimal advertising. Fleet is careful to "manage expectations" and, with incremental revenues still meager, does not want to get caught up in numbers games and "fanciful revenue scenarios," Mr. Hedges added.

"We are definitely seeing a new channel opening up, and people are doing more than just dabbling," he said.

Regional competitor BankBoston, having signed 250,000 on-line customers since the old BayBank subsidiary launched its program in March 1996, is among a handful of industry leaders with enrollments in the 250,000 to 500,000 range. Add those up-also including Citicorp, Wells Fargo & Co., BankAmerica Corp., NationsBank Corp.-and they account for most of the active PC banking population.

Robert Shay, BankBoston's director of global electronic banking, told the Bank Administration Institute's Retail Delivery '97 conference in early December that 50% to 60% of his 250,000 are active, "which is consistent with other programs I have seen."

He said with 13% of the BankBoston customer base in the on-line program, the company is well ahead of the 3% to 5% penetration that has been assumed to be more typical.

These bankers keep a close watch on what might be termed the "channel effect"-the impact PC banking has on other delivery systems. It has not yet cut down on the need for branches. Mr. Shay said check volumes are falling, but more because of debit card usage than electronic bill paying. (A quarter of his PC enrollees, and 70% of Mr. Hedges', have signed up for the fee-generating bill-paying services.)

PC users' calls to telephone centers are down-except perhaps when they need help getting started on-line.

"A lot of people see the Internet as a replacement for telephone banking, and that may be responsible for a lot of the higher (PC banking) numbers," said Mr. Harrison of Meca.

"There will always be people who don't want to use these channels," said Tripp Johnson, senior vice president, electronic commerce at Crestar Financial Corp., Richmond, Va. "We are pursuing the Internet aggressively but we are not looking for huge numbers. We don't see this as something that will necessarily steer customers away from other channels. It just gives them more choice."

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