Online banking is booming
Forty-seven percent of U.S. adults surveyed by Gartner pay bills online. And number of Net-banking households to jump to 63 million by 2014, according to Forrester.
Once a niche market, online banking has grown into a widely-used tool for the average consumer.
Among 3,988 adults surveyed in the U.S. by Gartner Group, 47 percent said they now bank online. In the U.K, 30 percent echoed the same response.
Results varied according to income. Gartner found that over half of all consumers earning more than $30,000 in the U.S. and 15,000 pounds in the U.K. bank on the Internet. Among lower-income households, 25 percent in America and 17 percent in the U.K. use online banking.
"Over the past several years, online banking has been seen as a way of appealing to more affluent and younger clients," said David Schehr, Gartner research director. "However, what is becoming clear is that the overall level of consumer Internet use and the increasingly narrow segment of nonusers--particularly in the U.S.--are shifting the dynamics of who is using online banking and what they seek from it."
Among people who don't bank online, no one single reason was cited above all others, noted Gartner. Around 61 percent of U.S. households and 58 percent of those in the U.K. said they simply prefer to use other methods. However, 41 percent of U.S. consumers and 38 percent in the U.K. blamed security as the most important reason for not banking over the Internet.
Gartner conducted its survey in December 2008 and January 2009 and questioned people 18 years and older.
Overall, the number of households paying bills online is slated to jump 5.4 percent from 48 million this year to 63 million by 2014, according to another report from research firm Forrester.
The report notes the effect of bill consolidation sites, such as Yodlee and Corillian, where consumers can manage and pay all their bills. Such sites are starting to woo more people from the banks' own bill payment sites and will own a greater share of the market by 2012. Banks will need to do a better job spreading the word about their own online services, according to Forrester.
"eBusiness executives at banks need to work to establish earlier and stronger bill payment relationships with young affluents and other young adults," said Forrester senior analyst Edward Kountz. "To strengthen their position and better support these customers, banks need to add more payment options, deploy online and mobile alerts with greater visibility, and continue to hammer home the message that online bill payment is free."