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  Online Banking Up 47% in Two Years
Online Banking Up 47% in Two Years
Online Banking Up 47% in Two Years
 
Market Decisions of South Portland brought to our attention this research conducted by the Pew Internet and American Life Project detailing the growth of Internet banking from 2002 to 2005. For more information, contact Curtis Mildner of Market Decisions at (207) 767-6440, ext. 105.
 
Fifty-three million people, or 44 percent of Internet users and one-quarter of all adults, now say they use online banking. Those figures amount to an increase of 47 percent over the number of Americans who were performing online banking in late 2002. 

On a typical day online, 13 million Americans are performing banking chores online, a 58 percent jump from late 2002.

These latest results come from a survey done by the Pew Internet & American Life Project in late November 2004. Of all the major Internet activities tracked by the Project since its inaugural survey in March 2000, online banking has grown the fastest.

Here are some of the key characteristics of online bankers: 

• Broadband and online experience. The spread of online banking has coincided with the spread of high-speed broadband connections and the increasing maturation of the Internet population. Fully 63 percent of those with broadband at home have tried online banking, compared with 32 percent of those with dial-up connections. And 51 percent of those who have more than six years of Internet experience have tried banking online, compared to 27 percent of those with three years or less of online experience.

• The rise of GenX. Those with Internet connections between the ages of 28 and 39 to have tried online banking. Some 60 percent have done so, compared to 38 percent of wired GenY members (those 18 to 27) and 25 percent of those with Internet connections over the age of 60.

• Men. In the past two years, online men are notably more likely to perform online banking activities than online women. Half of men with Internet connections (49 percent) have tried online banking, compared to 39 percent of online women. This is a change from the situation two years ago when Internet-connected men and women were equally as likely to be banking online.

• Higher socio-economic status. Online banking, like many other Internet activities, is most likely to be performed by those living in well-off households (households with more than $75,000 in income), those who have college and graduate degrees, and those who live in suburbs. It is important to note, though, that there has been an across-the-board increase in online banking that has brought more of those who are working-class, those who don’t have college degrees, and those in rural areas into the online banking population.

This rise in online banking likely flows from two major trends. The first is that as Internet users gain more experience online, they are more likely to perform activities that involve money, such as making online purchases and travel reservations, and participating in online auctions.  

 The second trend is that banks themselves have discovered the virtues of online banking and have become more aggressive in offering it as an option to customers. Various studies have found that online banking customers are more profitable than offline customers – they make fewer customer service calls and are less likely to switch banks. That means many banks are improving their online services and offering them free of charge to customers.   

Of course, phishing (the practice of trying fraudulently to get consumer banking and credit card information) is one potential new problem for online banking. Increasing numbers of fake e-mails are showing up in people e-mail inboxes, “warning” them that their account information needs to be checked or that some problem has arisen in their account. These e-mails then point people to Web sites where they are asked to enter their financial information. This fraud not only costs banks real dollars, but it degrades customers’ trust in the bank and in online banking in general.      

Posted on Thursday, March 31, 2005 (Archive on Wednesday, June 29, 2005)
Posted by kdroney  Contributed by kdroney
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