The Diffusion of Internet Banking in Western Europe

1 Though the Internet has been a fast-adoption medium, even businesses such as banks that are particularly suited to moving online quickly have been finding that customer adoption of their e-services may be erratic. This paper is a first attempt to model the Scurve of Internet banking diffusion for a sample of 65 European major banks in the last 4 recent years (1997:2000). While a country Internet literacy is confirmed as a key determinant of on-line banking penetration, bank-specific variables such as its ATM coverage , or its overall cost efficiency also helps explain a large part of the “S-curve” components (timing and speed) of on-line banking diffusion in Europe. 1 The paper is part of a series of research launched by the Digital Economy Lab at McKinsey. The author thanks colleagues for useful comments. Early related findings have been reported in the McKinsey Quarterly, while simple logistic regression analyses on a more restricted sample is available at JCMC site.