To gain a better understanding of the online banking opportunities available to financial institutions today and in the future, Verdi conducted an "Internet Impact Assessment." The study, an online survey of more than 1,500 Internet users, sheds light on consumer behavior and Internet banking, and how banks can capitalize on the new delivery channel.

"Our research reveals that the way banks integrate Internet services into their product lineup and delivery system will have a significant impact on their competitiveness," says Gerald D. Verdi, principal. "Traditional branch-based banks have an opportunity to leverage an integrated network and strongly position themselves against virtual banks."

Contrary to the perception that consumers who use Internet banking conduct all their business over the phone or the Internet, the Verdi assessment showed that Internet customers still patronize bank branches. Internet banking customers in the survey averaged more than three teller visits per month and 70 percent said they had visited a branch in the past 30 days.

"Bankers should take heart that their branch networks continue to be valued by Internet users," says Verdi. "This data reminds branch-based banks of their competitive advantages: local decision-making, walk-in service, and personal attention."

Verdi's Internet Impact Assessment revealed that current Internet banking customers are a marketing goldmine: they access their accounts online an average of 13 times per month. They averaged a total of 26 transactions and interactions per month with their financial institution--including visits to the branch, ATM use, and telephone and online services--compared with 18 contacts for non-Internet customers.

"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," says Verdi. "But just as they are merchandising their branches to capture sales opportunities, banks must design their Internet sites as a sales point, not just a transaction point."

The Verdi data emphasizes the need for a coordinated marketing approach throughout a bank's entire delivery system, cross-promoting their branches and Internet site, and preparing employees to troubleshoot online problems. Verdi also suggests that banks cross-promote their Internet sites with other online service providers and link to complementary sites to generate traffic.

"Banks have an opportunity to generate additional revenue by selling advertising space on their Internet sites," says Verdi. "But the greater opportunity is in bundling and selling advertising space on the bank's ATM displays and receipts and Internet site."

The Verdi study also confirmed the growth potential in Internet banking. While 15 percent of survey respondents said they had shopped online for a financial service in the last 30 days, 37 percent said they would do so in the future. Survey participants who were not currently banking online indicated a greater interest in Internet banking than many other services available online, such as travel planning, entertainment ticketing, or stock trading.

A key finding of the Verdi study revealed that usage of banking-related services increases dramatically among more experienced Internet users. After two years online, 29 percent of survey participants had signed up for Internet banking--versus only 13 percent of those with less than two years of Internet usage.

"Over the next few years, many current Internet users will gain the confidence needed to try Internet banking," says Verdi. "And when consumers have access to faster, higher quality connections and sites, Internet banking and other online services will become much easier and more convenient to use."

Verdi & Company 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. Verdi & Company is affiliated with Diebold, Incorporated, a global leader in providing integrated delivery systems and services.

Founded in 1859, Diebold is headquartered in Canton, Ohio. It employs more than 10,000 associates in some 75 locations worldwide. Diebold is publicly traded on the New York Stock Exchange under the symbol (DBD). For more information, visit the company's Web site at www.diebold.com.