On October 18, 1995, Security First Network Bank opened for business in Pineville, Kentucky, as the first bank in the United States to take deposits over the internet and to run without branch offices. Customers used a browser to open accounts, move money and pay bills, and there was no counter to visit. The bank was small and its first base of customers was modest, but the model it set out was new.
The idea came from a group of bankers and software engineers who had worked with the University of Kentucky, and they had to fit the service around rules that had been written for banks with buildings and tellers. Deposits were insured by the federal insurance fund, which mattered because customers were being asked to trust a bank they could not walk into. Its first chief executive said the aim was to make the branch unnecessary for most everyday business. The aim was simple. The site was one of the first places where a member of the public could move money over the open internet.
Growth was slower than the founders hoped. The cost was high. The bank made little profit, and in 1998 it was bought by the Royal Bank of Canada, which wanted the technology as much as the deposits, and the software arm was later sold on. Other banks followed with their own online services in the late 1990s, and by the 2000s most large banks offered internet banking as a standard product.
The wider change was large. Online banking moved routine transactions away from counters, cut the cost of handling a payment, and made it possible to run a bank with far fewer branches, and it later opened the way for mobile banking. Security First Network Bank is remembered as the start of that shift, and the date of its opening in October 1995 is often given as the beginning of internet banking in the United States.