“e-Push or e-Pull? Laggards and First-Movers in European On-Line Banking


  • Jacques Bughin

    Corresponding author
    1. Partner principal at McKinsey & Company and holds a Ph.D. in economics and operations research. His e-commerce research concentrates on profitability assessment of business models on-line as well as marketing effectiveness for Internet companies. He has published about 50 articles in leading international journals such as Electronic Markets, Journal of Industrial Economics, the McKinsey Quarterly, Management Science, and European Economic Review.
    Search for more papers by this author

Address: McKinsey & Company, Av. Louise 480 b22, 1050 Brussels, Belgium. Tel. +32 2 645 42 11  Fax. +32 646 45 48.


While a strategic imperative for financial institutions, major differences currently exist among banks' abilities to convert their customers to using the Internet. In addition, not a lot is known as to what drives those differences, although one can easily hypothesize that on-line banking adoption must be due to a combination of demand (“pull”) and firm (“push”) factors. This paper presents a statistical appraisal of the determinants of on-line customer penetration for a cross-sectional sample of the major incumbent banks in Western Europe for the combination of the years 1988 to 2000. “Pull” factors play a large role in explaining customer conversion to Internet banking, yet bank-specific factors (or “push” factors) are not marginal. Among others, banks with traditionally high cost-effectiveness and that already offer wide private ATM coverage for their customers are also the ones which have already started to migrate a larger proportion of their customer base on-line. Interestingly, among all “push” factors analyzed, cost-effectiveness emerges as the largest leverage effect on customer conversion. Finally, a cluster analysis supplements the regression results along the axes of “pull” and “push”, and identifies a set of early movers and laggards among the banks in our sample. Generally speaking, those first-movers already exhibit stronger off-line profitability than laggards, which may indicate that the on-line marketplace may reproduce performance off-line (i.e., currently successful banks have nothing to fear from aggressive start-ups).