Online banking continues to win over Canadians but it appears to be taking its toll on telephone services according to marketing research conducted by NFO CFgroup.
In 2002, one-quarter of Canadian adults surveyed made an Internet banking transaction in the month prior to the interview, up from 19 per cent in 2001, but past month phone-banking usage fell for the first time since tracking began in 1994, from 26% in 2001 to 22% last year.
Rhonda Grunier, vice-president of NFO CFgroup and author of the study, says: "A few years ago, more than half of people who had signed up for Internet banking started out as phone banking users. Today, a growing number are adopting the Internet banking channel directly."
Overall 31% of respondents were signed up for online banking in 2002, up from 24% in 2001 and 20% in 2000, and 47% of respondents with Internet access at home banked online in 2002, up from 40% in 2001.
Registration for Internet banking also increased significantly last year among almost all demographic groups, with the largest gains among Canadians aged 25 to 34 or 50 and over.
Grunier adds: "While online and phone banking allow consumers to do similar sorts of transactions with 24/7 access, the visual medium of the Internet makes online banking easier to use."
The research also shows that Canadians are increasingly going online to pay bills. In 2002, 21% paid a bill through a Web banking service, up from 16% in 2001. Also, a small but growing number are using electronic bill presentment services, which allow users to view, pay and store bills on a computer. Currently, six per cent of adults use the service compared to four per cent in 2001.
According to the study e-mail money transfer is not widely appealing, with just one per cent reporting they are using the system to transfer funds. Only 14% of respondents said they are 'very' or 'somewhat likely' to use the service and as many as 62% said they are 'not at all likely' to become adopters.
In addition, seven per cent of all Canadians were registered for online trading in 2002, up from five per cent a year earlier, but although more cunsumers are signed up to trade online, this service is not used as frequently in 2002 and 2001 as it was in 2000, a reflection of weak equity markets in each of the past two years.
Despite the rise in Internet banking, the study shows that ATMs continue to be the most popular channel for transactions, with 78% having used one in the past month. The self-service machines have surpassed branches as the preferred means of depositing cash and cheques and transferring funds between accounts.
But while Canadians are increasingly handling transactions electronically, the majority continue to deal with their bank at the branch level. In 2002, 61% said they had visited a branch in the past month to conduct a transaction with a teller or branch staff, up slightly from 58% in 2001.
NFO CFgroup says this small increase may signal the end of the downward trend in branch banking that has been tracked over the past eight years.
Grunier adds that the branch will continue to play an important role in the delivery of banking services: "Consumers want to have a choice of how they conduct their transactions."