The History of Digital Banking
Most historians consider the birth of digital banking to have occurred in the middle of the twentieth century, most significantly with the advent of the automated teller machine (ATM) in the 1960s. However, the roots of digital banking date back centuries earlier.
1953 - Stanford Research Institute creates the first known bank “mainframe” used to process checks for Bank of America customers.
1966 - Barclays launches the first known debit card product.
1967 - The first of six automated teller machines (ATM) is rolled out at a Barclays bank branch in north London, England.
1971 - Busicom introduces the first model of ATM powered by the first commercial microprocessor, Intel 4004.
1983 - Bank of Scotland offers the first “internet banking system” that connects via a television set and a telephone to transfer money and pay bills.
1993 - Microsoft Money personal finance software is rolled out, enabling approximately 100,000 households to access their account information online.
1994 - Stanford Federal Credit Union creates the first online banking website, becoming the first financial institution to make online banking available to all customers.
2000 - Yodlee, an account aggregator, is founded, allowing users to see their credit card, bank, investment, and travel reward accounts on one screen.
2001 - Eight separate US banks have at least one million users on their online platforms. Nearly 20 million US households are now accessing online banking.
2002 - PayPal emerges after being acquired by eBay shortly after its initial public offering. 70 percent of all eBay transactions were completed through PayPal.
2005 - FFIEC releases Authentication in an Internet Banking Environment to “reflect the many significant legal and technological changes with respect to the protection of customer information, increasing incidents of identity theft and fraud, and the introduction of improved authentication technologies and other risk mitigation strategies.”
2006 - Direct banks like ING, HSBC Direct, and eTrade Bank start operating outside of the branch-model with primarily online servicing.
2006 - Personal finance management tools like mint.com provide consumers with easy-to-use online tools to manage their personal finances.
2007 - Apple releases the first iPhone, sparking a massive shift from banking on personal computers to mobile banking on a smartphone.
2007 - Vodafone launches a mobile phone money transfer and bank-telecom payments system called M-Pesa.
2008 - Satoshi Nakamoto publishes a paper under an alias that introduces Bitcoin, a new encrypted digital currency built on blockchain technology.
2009 - More than 50 million US households are accessing their bank accounts online in a digital environment.
2009 - First bitcoin software and cryptocurrency network launches.
2009 - Simple and Ally launch in the US; two of the first banks to serve customers within the marketplace model.
2010 - RBS launches the world’s first fully functional mobile banking app.
2011 - Online and mobile banking continues to advance with mobile check depositing, EMV-chip debit cards, mobile banking devices. Financial institutions that offer digital banking services begin to dominate the market as consumers continue to demand 24/7 mobile banking capabilities.
2011 - Google launches the world’s first digital wallet, enabling consumers to make payments, earn loyalty points, and redeem coupons. The initial rollout was limited to one device and just a few merchants.
2013 - Digital bank Nubank launches, paving the way for neobanks of the future to operate in digital-only environments.
2014 - Apple enters the e-wallet arena with the launch of Apple Pay.
2015 - Monzo launches as a digital, mobile-only bank in the UK.
2019 - Facebook announces a new cryptocurrency called Libra trying to build a coalition that includes Paypal, VISA, Payu, Vodafone, Uber, and more.
2019 - Google teams up with Citigroup and Stanford Federal Credit Union to offer checking accounts as part of a program called Cache.
2020 - Shopify announces Shop Pay and enters the installment loan space, offering merchants a built-in financing option for consumers.