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This paper examines how New Zealand banks enhance their retail banking services through the Internet. Seven NZ online banks were studied in terms of their web sites' effectiveness, functionalities and Internet strategies. The functionality was examined by evaluating banks' web sites using a tailored electronic commerce model. The effectiveness was surveyed utilising a judgment sample of actual and potential retail Internet banking customers. Main factors that inhibit the adoption of I-banking in NZ are security, doubt about the complication of Internet banking and the ability to bank using other facilities. Other important factors that customers use to judge the performance of retail I-banking services are response time, services free from technical problems and up-to-date information. NZ banks perform extremely well in providing up-to-date information. However, further improvements on security, download time, response time and the ability to provide services free from technical problems should be considered in order to satisfy customers' requirements.