| By Jim Bruene on December 1, 2002 2:07 PM | Comments (0) |
If not for the foul economic climate and over inflated expectations of the late ‘90s, the online channel would be the toast of the industry. By most measures, online banking is a runaway success. Compounded annual growth since OBR’s founding, at year-end 1994, has been 80%. Worldwide, more than 100 million households now bank online, up 20-fold. In the U.S., household adoption passed 25% a few months ago, up 100-fold since 1994. Looking ahead, we project another doubling of usage in the U.S. to 50+ million households by decade’s end. Worldwide, the total is expected to triple to 300 million or more households.
Table 1
7.5 Years of Web Banking
|
Metric |
May 1995 |
Dec. 2002 |
|
Financial institutions with Web banking (WW) |
1 |
6,000 |
|
Financial institutions with Web sites (WW) |
50 |
14,000 |
|
Total online banking households (WW) |
5 million* |
100 million |
|
Total online banking households (US) |
300,000 |
28 million |
|
Monthly bank and credit card Web traffic (US) |
100,000 |
50 million |
|
Monthly credit apps submitted via Web (US) |
0 |
1.5 million |
Source: Online Banking Report estimates, +/- 25%, 11/02 WW=worldwide
* Using dial-up services such as Prodigy or CitiDirect in the U.S., Minitel in France
However, the industry is still young and has many challenges ahead including:
- difficulty in quantifying the benefits of online channel usage
- post dot-com skepticism from management, media, and nonusers
- security issues, real and imagined
- adverse selection problems with loan accounts generated online
- miniscule spread on deposits
In 2003, we’ll address these issues and more, helping you realize the full
potential of the online channel, both internally and with customers.
Happy holidays.
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