E-Commerce Commission Press Kit

Every Monday or Tuesday, American Airlines looks at its yield management results and picks outlow-performing markets. Midweek, more than one million “NetSAAver” subscribers receive ane-mail from American Airlines listing special discounted fares for travel in selected markets duringthe upcoming weekend. The NetSAAver program has generated tens of millions of incrementaldollars for the airline since its launch in March 1996.RETAIL BANKINGInternet banking is still in its infancy. Although most of the top 100 banks in the U.S. have a Website, the Online Banking Report classifies 24 of them as “True Internet Banks”—banks that lettheir customers review balances, transfer funds and pay bills on their Web sites. Smaller banksalso have Web presences. In Online Banking’s list of 133 “True Internet Banks,” 109 do notmake the list of the top 100 U.S. banks ranked by assets. 70Before the decade is out, customers are likely to be able to do most of their banking transactionson the Web. According to a 1996 Booz-Allen & Hamilton survey of North American financialinstitutions with Web sites, 80 percent of respondents planned to allow their customers to conductmost traditional banking transactions over the Internet within three years. 71Online retail banking is being driven by lower operating costs, the ability to offer new services,and the ability to do one-to-one marketing.Lower operating costsOnline banking services are lessexpensive to offer to customersthan other forms of banking.Checking an account balance ortransferring funds from achecking account to a savingsaccount can be done in person ata branch bank, over thetelephone, with an AutomaticTeller Machine (ATM), at homeusing a PC, or, in some cases, ona bank’s Web site.A branch bank can serve as manycustomers as it has staff tohandle. Once the investment ismade to create a fullyfunctioning Internet site (for aFigure 8. Internet Banking is Cheaper for BanksCost per Transaction ($)1.21.0710.80.60.520.40.270.20.01 0.0150Internet PC Banking ATM Telephone BranchSource: Booz-Allen & Hamilton29