The number of Canadian consumers who use Internet banking services appears to have reached a plateau, according to a study by Toronto-based market research company TNS Canadian Facts.
For the first time since TNS began tracking online banking in 1997, the proportion of Canadians who do some of their banking over the Web has not increased over the previous year.
The study, which was conducted in autumn 2004, found that three out of ten consumers had used online banking services in the previous month, similar to the results from the 2003 study.
In addition, fewer non-users say they an interest in using Web banking services. Only six per cent of those who have not signed up for Internet banking are likely to do so in the next six months.
Rhonda Grunier, a VP at TNS Canadian Facts, says the huge growth recorded in Web banking over the past few years has levelled off: "Internet banking is filling a need for a sizeable segment of consumers, but it is not for everyone, so we should not be surprised that growth is slowing or even stopping."
TNS says consumer choice is largely behind this plateau in online banking. The main reason why non-users are not interested in adopting Web banking is that other channels are available which adequately meet their needs.
The research shows that other banking methods are still important to consumers. The proportion of Canadians that have visited a branch in the past month is stable relative to 2003 (59%), but the proportion who are weekly branch visitors has declined.
"Bricks and mortar continue to be important for banks, even as transactions have moved to one of the electronic means," says Grunier.
Similarly, past month usage of ATMs is unchanged from last year (75%), but weekly ATM usage is also becoming less common.
Meanwhile, phone banking usage, at 20%, is down from its 2001 peak of 26%. But TNS says online banking has not replaced telephone banking in part because the human interaction that the service offers may be an important complement to the use of other electronic channels.