Lauri Giesen, Banking Strategies:

"The eroding differentiation provided by online banking raises some challenging issues. Should providers redouble efforts to promote online bill pay and presentment in order to achieve the retention payoffs that this linkage seems to deliver? [...] The other choice is to simply accept that online banking is a channel, like all the others, that must be maintained to keep customers. In other words, it's just table stakes to stay in the game. Payoffs will come not from special customer responsiveness, but rather from potential cost reductions as customers are serviced online rather than through the call center, the branch or by mail."

Now that the internet is a mass phenomenon, it's harder to see basic online features as a way to differentiate from competitors, since everybody is "doing it." A few banks rely on online bill payment to drive people back to their sites and raise their switching cost. They're also realizing that there's no such thing as an "internet consumer", both because the population at large expects some kind of online service as a given, and because most customers are using a variety of channels (branches, ATMs, the phone), not just the web site.

The lesson here is that the bar is raising. Look at how even the worst laggards in your family are starting to go online. My mother, a self-proclaimed computer illiterate, sent me her first email a few weeks ago with the Shuffle mini PC I assembled for her. If even my mother is now a DSL consumer from her rural Eastern France, you know a fundamental change is going on! (Now that I think of it, all my close family is on broadband except for my in-laws, they're really a tough nut to crack, and it's not for lack of trying).

Wait till the current generation of teens open their first bank accounts with a whole new set of expectations. They might just not understand why they can't instant message you, and will give you weird looks if you imply that your ancient email address is a "value-added service."