Big, traditional banks aren’t all online laggards. In fact, it was Wells Fargo, which had revenue of $40 billion in 2005, that opened the first online banking site in 1995. Since then, as top banks have worked to improve their online offerings, Wells Fargo has been among the leaders, boasting a steady increase in the number of its active online customers. Most recently, they have rolled out My Spending Report, a free online tool that lets customers review and analyze their spending patterns.

Wells Fargo and top competitors are making progress in providing online customers with sophisticated functions, analysts say, but are still not quite at the level of online only banks such as E-Trade when it comes to pure site integration. For example, says Forrester Research analyst Brad Strothkamp, traditional banks have still not integrated their public and private sites. This means that when an existing customer is logged on to a banking session, he’ll usually have to log out in order to open another account or apply for a loan. Not so at E-Trade.

Leading banks are working to improve channel integration, however. For example, Wachovia is working on an initiative to create a single channel for retail customers that will integrate online, branches and call centers. “All the big banks are trying to figure out how to pull transaction and customer information from legacy systems,” says Rusty Wiley, global banking industry leader for IBM’s business consulting services.

To create My Spending Report, Wells Fargo deployed a data warehouse from Teradata to store its customer information, then used it to create reports based on that information. A similar tool, Business Spending Report, does the same for small businesses. Jim Smith, EVP of the Internet Channel & Products group at Wells Fargo, says the 3 million customers that have used My Spending Report reflect demand from online banking customers for analytical tools and other functions beyond basic transactions. The next steps include providing information to customers on their wireless devices.

“Our story is, pick the channel you want and we’ll be there with an experience that will be highly convenient for you,” says Smith.