More US customers switching to Web banking

More US customers switching to Web banking

The number of online banking customers in the US grew to nearly 40 million during the fourth quarter of 2005, a 27% increase over the previous year, according to statistics from Web metrics firm ComScore Networks.

ComScore says consumers continue to migrate to online banking, with the largest US banks attracting more than 8.5 million new Web banking customers in 2005, and the growth is being fuelled in part by increasing use of EBPP services and the growing availabilty of Internet-only high yield savings accounts.

But despite this, Serge Matta, director of comScore financial services solutions, says adoption rates are actually slowing: "In Q4 2005, the total number of online banking customers grew by 3.1% over the previous quarter, representing the lowest sequential quarterly growth in three years."

Financial incentives and decreasing security concerns are the now the main motivations for signing up to net banking. Around 33% of new online banking consumers said free banking products were an inducement, while 23% said they felt more secure about online banking than they did previously.

The study shows that use of EBPP services grew 36% in Q4 2005, compared to the previous year. Bank of America led the industry in electronic bill payment as its 5.1 million active bill pay customers accounted for more than half of the industry's total number in Q4 2005.

ComScore says the availablilty of online high-yield savings accounts is also changing the face of Web banking. New entrants into the market have driven growth of online banking and increased competition in the high-yield marketplace. ING Direct, which has previously dominated the market, has seen its share of submitted online savings applications drop from 63% to 33% over the course of 2005 after banks such as HSBC, Emigrant Direct and Capital One introduced their own online-only high interest accounts. More recently Citibank launched a new high-yield Internet account in a bid to attract more US customers to its Web banking channel.

According to the study Wachovia had the highest Web site satisfaction score, with 73% of visitors rating their satisfaction highly in 2005. Wachovia's nearest competitors - Bank of America, Wells Fargo, and Chase/Bank One - each had 69% of customers responding the same way.

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