Online Banking Timeline
number of U.S. households using online banking/bill payment

Source: Online Banking Report estimates based on industry data plus or minus 15%, 11/02

For the past five years we’ve published annual online banking forecasts. As the market matures it gets easier to predict usage one and two years out, but longer-term forecasts are still a crapshoot. Yet, every spreadsheet and business plan needs a forecast as a starting point, so we do our best to deliver one that is, hopefully, less wrong than others.

We gather and review forecasts made by prominent researchers and analysts, compare and contrast their results, add our own insights, and develop a forecast with accuracy estimated at plus or minus 15%. Over the years we’ve shown a respectable track record (see last table). Our first forecast, at year-end 1997, predicted 26 million households by the end of this year (2002). That now looks a bit on the low side, but still within our current estimate of 25 to 30 million users.

Source: Online Banking Report, 11/02                                                       

Copyright 2002: Online Banking Report (ISSN 1095-2829) is published monthly by Financial Insite Inc., 4739 University Way NE, Suite 1002, Seattle, WA 98105, USA. Phone: +1(206) 517-5021, Fax: +1(206) 524-0351, Email: info@onlinebankingreport.com, Web: www.onlinebankingreport.com. Subscriptions: US$795 per year worldwide, includes paper and electronic editions. Editor & Founder: Jim Bruene, jim@onlinebankingreport.com; Business Manager: Anita Schultz; anita@onlinebankingreport.com; Circulation: Kate Schultz, kate@onlinebankingreport.com; Sr. Analyst: Margaret Quinn, mq@onlinebankingreport.com;  Webmaster: Kelsey Marshall, kelsey@gagedesign.com; Web Database: Claire Powers; Copy Editor: Jennifer Russell; Editorial Board: Bruce Bruene, The Principal Financial Group; Vera Wildauer, Cascade Bancorp. Federal copyright law prohibits duplication or reproduction in any form, including electronic. To purchase reprints or electronic rights contact the editor.

Definitions

When reviewing forecast data, sometimes it seems as though the major analysts are gazing at two entirely different planets. How is it possible for respected researchers at Gartner to claim more than 30 million online banking users at year-end 2001 while the equally savvy bunch at Forrester says only 15.5 million ? When the numbers are dissected, you usually find that much of the variance comes from the definitions used; for example, Gartner tracks individual online users while Jupiter tracks households. Furthermore, Gartner counts all banking products, including checking/deposit accounts, credit cards, bill payment, and email payments, while Jupiter tracks payment accounts separately .

Like Jupiter and Forrester, we track at the household level because it’s consistent with how financial providers usually look at the market. Like Gartner, we use the broadest definition of an online banker (Table, below) including deposit account access, electronic bill payment, credit card access, or email payments through PayPal.

OBR Definition: Online Banking Household

Someone in the household must have done at least ONE of the following during the past 6 months:

•       Registered for online¹ access to checking, credit card², or loan/mortgage account access

•       Signed up to pay bill(s) online

•       Accessed balance or transaction data online for a checking account, credit card, or loan/mortgage

•       Authorized a bill payment online at any bank, non-bank, portal, or biller site³

•       Transferred funds online using third parties such as PayPal, Yahoo! PayDirect, or C2it

Does not include:

•       Viewing a nonfinancial billing statement online but paying it by paper check, preauthorized debit, or credit/debit card

•       Point-of-sale transactions whether paid by credit card, debit card, electronic check, PayPal, etc.

Notes:
(1) Any connection from home, work, school, or other place where data can be viewed through any device (Web phone, browser, proprietary software, Quicken, Money, etc.)
(2) Our estimates include 5+ million households whose only online banking activity is paying or accessing credit card statements online. 

OBR Track Record: Accuracy of Prior Forecasts
millions of online U.S. households banking online

Source: Online Banking Report, 1998 - 2002