Prospective Online Banking Users

Despite impressive growth in online banking, the prospect pool has remained relatively unchanged since 1999. We define a prospect as a PC owner that is somewhat or very interested in online banking. In 1999, with only 7 million households banking online, there were 26 million prospects. This year, even though 16 million (60%) of those 1999-era prospects have become users, there are still 24 million prospects. If historical trends continue, we will see 14 to 15 million of today’s prospects become users by mid-2005, resulting in 38 to 39 million total users. This is consistent with our forecast of 40 million online banking households by year-end 2005

Table 1
Interest in Online Banking Among Non-Users
mid-year numbers and estimates

Source: American Banker/Gallup 1999 to 2002 Consumer Survey (n = 1,000), see notes under Table 17

(1) OBR estimate, +/- 10%

Online Banking Platform Vendors

Table 2

Largest Public Net Banking Platform Vendors

dollars in millions

Source: Company reports, 11/02

Bricks & Mortar

Somewhat surprising, given the lackluster economic climate and the overall decline in branch usage¹, the number of brick and mortar branches increased in 2001. After a slight decline in 2000, the total number of bank and thrift branches increased for the thirteenth time in 17 years. At year-end 2001, there were 78,866 branches in the United States, 1,121 more than a year earlier. During the past 10 years, the branch banking system has gained an average of 770 new branches per year. With nearly 79,000 banking branches, the U.S. has one branch for every 1,300 households². The total number of bank/thrift entities declined by 291 to end the year at 9,886. New charters slowed to 144, almost 100 less that the 1998 through 2000 average. 

¹ Synergistics  www.synergisticsresearch.com  reports that average weekly visits has declined 35% from 1995 to 2002; average weekly branch visits of households with income of $25,000 or more: 1995 = 4.4, 1997 = 4.1, 1998 = 3.5, 2000 = 3.2, 2001 = 2.9, 2002 = 2.9

² Not including credit union branches which number

Table 3

Number of Bank and Thrifts Operating at Year-End (U.S.)

Source: FDIC, 11/02                 *129 new banks and 15 new thrifts