New Media and New Markets Assignment 4: Give an example of diffusion of Internet technology....

An example of diffusion in internet technology in the United States was the development of internet banking in 1995. Wells Fargo allowed customers to access there banking account online and the first only internet bank opened which was called Security First Network Bank. Since 1995, banks have been increasing their online presence because it leads to more productivity gains for the bank . The internet has made it much easier for the banks to reach and serve there customers 24.7 regardless of where the consumer is located. It also allows customers to always have access to their bank statements 24/7 and get a detailed summary of what he or she is spending his or her money on.

Furthermore, it allows the banks to cut down costs by conducting standardized, low-value-added transactions such as balance inquiries, account transfers and bill payments through the online system. This allows banks to focus on their specialized high transactions such as small business lending, investment banking and trust services.

Bank customers use to be unsure about handling and checking their balances online especially those customers that used small localized banks. Customers became more confident with doing online banking when they found out that a large number or large banks would be adapting internet banking. Customers were also more likely to do online banking when they found out banks that offered an online banking option were also stronger performing banks overall. In 2003 banks attributed an increase in profits as a result of adapting to new technologies such as online banking ( Berger, Allen and Loretta Mester (2003). “Explaining the Dramatic Changes of Performance of U.S. Banks: Technological Change, Deregulation and Dynamic Changes in Competition,” Journal of Financial Intermediation, 12(1), 57-95).