Which company launched the first internet-only bank in 1995?

Security First Network Bank launched the first internet-only bank in 1995.

Founded in Pineville, Kentucky, in October 1995 by Michael Karlin and James (Chip) Mahan III, Security First Network Bank operated without physical branch offices. Customers accessed accounts online, could pay bills, and could view check images—features that now seem routine but were novel at the time.

The bank was not the first attempt at online banking. Earlier experiments often used internet “tokens” or limited electronic services rather than providing direct access to a federally protected bank account. Security First’s importance was that it functioned as a genuine, online-only bank.

A common mix-up is confusing the first internet-only bank with the first bank to offer online banking. Traditional banks had already begun experimenting with electronic access. Security First’s banking operation was acquired by Royal Bank of Canada in 1998, while its software arm became S1 Corporation.