Traditional banks eclipse online-only rivals for Web traffic
29 August 2001 | 3135 views | 0
The latest data from Internet monitoring company Jupiter Media Matrix indicates that US consumers are increasingly flocking to the Web sites of multichannel banks, forcing online-only banks to rethink their strategies for customer acquisition and retention.
The latest Media Metrix traffic data reveal that the number of unique visitors to multichannel banks (banks with offline branches and online services) climbed from 6.4 million in July 2000 to 13.4 million in July 2001 - a 110.5% increase. During the same period, traffic to online-only banks fell 8.1% from 1.2 million unique visitors to 1.1 million unique visitors.
"Online banking has moved from being a competitive edge to a commodity," says James Van Dyke, research director, Jupiter Media Metrix. "General-purpose online-only banks, competing without branches and universally accessible customer service, are losing their lead to aggressive traditional depository institutions."
Traffic to all banks grew 77.6% between July 2000 and July 2001, compared with overall World Wide Web traffic, which increased only 19.8% in the same period. Jupiter analysts cite consumers' growing comfort accessing and managing finances online as a catalyst of the increase in online bank traffic.
Chase, the most visited multichannel bank in July 2001, also posted the largest year-over-year gain with a 281.1% increase in unique visitors - up from 957,000 unique visitors in July 2000 to 3.6 million in July 2001. Wells Fargo and Citibank rounded out the top three most trafficked multichannel banks for July 2001, each with approximately 3.5 million unique visitors.
Jupiter analysts expect that online-only banks will find it more and more difficult to compete against larger, more established multichannel banks for online customers because, even when selecting an online bank, consumers primarily prefer traditional banking aspects.
A recent Jupiter consumer survey shows that consumers are more likely to conduct online banking with a financial services company that offers easy access to customer service (54.6%), nearby ATM machines (52.4%), close branches (52.3%) and comes highly recommended by friends and relatives (21.3%).
"If traditional, multichannel banks have the inherent advantage of offering highly sought-after attributes, then online-only banks need to focus on their greatest area of opportunity. That opportunity is the ability to reach a specifically targeted client set through affinity banking - adopting a strategy that would be almost impossible for a larger, more established bank to execute," Van Dyke concludes.