At Verdi & Company, we recently completed an "Internet Impact Assessment, " an online survey of more than 1,500 Internet users that sheds new light on consumer behavior and Internet banking and how banks can capitalize on this new delivery channel.

Bankers should take heart that their branch networks continue to be valued by Internet users. Internet banking customers in our survey averaged more than three teller visits per month and 70 percent said they had visited a branch in the past 30 days. This tells me that traditional branch-based banks have an opportunity to leverage an integrated network and strongly position themselves in the marketplace. It also reinforces the competitive advantages of branch-based banks: local decision-making, walk-in service and personal attention.

With the business world abuzz with all things Internet, it's easy for bankers to feel behind the eight-ball when it comes to online banking. Many of the nation's banks establish an Internet site with the intention of rebuilding it with a more focused strategy and sales approach at some point in the future—perhaps when they've figured how to price and profit from Internet services. But our research reveals that the way banks integrate Internet services into their product lineup and delivery system today can significantly impact their competitiveness. Just as banks are merchandising their branches to capture sales opportunities, they must also design their Internet sites not only as a transaction point, but also as a sales point.

Here's why. Our study confirmed that Internet banking customers are a marketing gold mine—they offer their financial service provider ample opportunity to communicate with and sell to them. On average, Internet bank customers in our study accessed their accounts online 13 times per month. Those same customers communicated with their bank an average of 26 times a month in the form of branch visits, ATM transactions, telephone calls and online inquiries, compared with just 18 contacts a month for non-Internet customers.

What this type of customer calls for—loud and clear--is a coordinated marketing approach throughout a bank's entire delivery system. To take full advantage of this consumer behavior, banks should cross-promote their branches and Internet site, and prepare employees to explain Internet banking services and troubleshoot online problems. It's also a good idea for banks to adopt online marketing strategies, such as cross-promoting their Internet sites with other online service providers and linking to complementary sites to generate traffic. To boost non-interest income, financial institutions can generate additional revenues by selling advertising space on their Internet sites. An even greater opportunity lies in bundling and selling advertising space on the bank's ATM displays, receipts and Internet site.

The fact is, despite defections from some Internet banking programs, consumer demand for Internet access to their banks will only increase. One of the key findings in our study was the more experienced an Internet user, the more likely that user was to be involved in Internet banking. After two years online, 29 percent of our survey participants had signed up for Internet banking, compared to only 13 percent of those with less than two years of Internet usage. That means over the next few years, many current Internet users will gain the confidence necessary to try Internet banking. Access to faster, higher quality connections and sites will only make online service easier and more convenient for consumers. And half of America has yet to come online.

While an Internet site will not necessarily help a bank gain significant market share, it is a competitive necessity—and one that offers an opportunity to develop deeper customer relationships. The key to success is in creating an integrated channel strategy and a cohesive marketing approach.

Verdi is a financial service-consulting firm that specializes in helping banks optimize their retail delivery and distribution systems. Founded in 1990 by Gerald D. Verdi, the company has worked with hundreds of financial institutions across the country, and is affiliated with Diebold, Incorporated, a global leader in providing integrated delivery systems and services.