LEVERAGING THE INTERNET _ A continuing shift to online cu stomer servicing has lowered costs for the company while increasing convenience for card members, who can check statements, pay bills, apply for cards and perform a host of  other transactions through the Manage Your Card Account (MYCA) section of americanexp ress.com. MYCA attracted 3.7 million enrollees in 2002, bringing the global total to 8.9 million. 

have steadily increased the number of employees trained in Six Sigma tools and principles. In addition to fixing errors within processes, we are also now applying Six Sigma principles to product design and development in order to build quality in from the start. We view Six Sigma as an important element of our ongoing commitment to service quality and to providing our customers with experiences that continually meet and exceed their expectations. 

We also continued to leverage the Internet to lower costs and improve service quality. During 2002, we expanded the number of services and capabilities available to customers online and increased their utilization. For example, within the U.S., approximately 80 percent of our card servicing transactions are now available online. In fact, we now have more online interactions with customers than we do by telephone or in person. Within our Corporate Card base, nearly two-thirds of account maintenance is now being done online instead of being phoned in or faxed to us for processing. At AEFA, 66 percent of all 401(k) transactions are com- pleted online. The Internet also serves as an important 

product development and customer acquisition channel across both our card and financial services businesses. 

Online servicing can dramatically reduce unit costs. We realized substantial benefits in 2002, while improving the flexibility of our overall business models and delivering service in a manner that many of our customers prefer. As part of our shift to online servicing, we also continued to move more internal processes, such as the procurement of goods and services, to the company’s intranet. 

While we have made good progress in shifting volumes online, there remains a great deal of opportunity across our transaction base. With the majority of our online servicing capabilities already built and paid for, we expect the Internet to generate continued margin improvement for us over the near to moderate term. 

We are transforming traditional practices in other areas as well. Our decision to outsource data operations to IBM last year is one example. This arrangement will 

