Online Banking Grows but Mobile Potential Sees Hurdles

The online banking population in the U.S. grew 9.5% to 44 million customers in 2006, according to comScore. However, this single-digit growth is significantly slower than the double-digit increases that were observed in 2005 (27%) and 2004 (47%).

Citibank and Washington Mutual both made big strides in 2006 with growth numbers of more than 20%, but Bank of America is still king of online banking with a whopping 16 million customers, or about 36% of the total online banking population.

Brian Jurutka, senior advisor at comScore, stresses the importance that creative incentives will play from here on out.

"HSBC has a 6% introductory rate which is just a great rate. I think that’s an indicator of the types of financial incentive programs we’ll be seeing more of," he said.

Jurutka also pointed out, as expected, that a big concern for online banking customers is their sense of security.

Wachovia and Washington Mutual ranked number one and two, respectively, in terms of satisfaction with their banking relationship and satisfaction with the banks’ respective Web sites.

As with everything on the Internet, the mobile arena is becoming of increasing importance and online banking is no different. However, there is subdued interest being voiced by consumers.

According to comScore, less than a quarter of current online banking customers are interested in mobile bank account access. The necessity of a mobile Web connection was the top reason for this lack of interest.

For those who are actually interested in mobile banking, balance inquiries was the most requested feature.

A report titled "Mobile Banking: Assessing Servicing Opportunities via Cell Phones" released by JupiterResearch offers information that agrees with comScore’s findings. According to JupiterResearch, only 8% of online consumers who own a cell phone are interested in using mobile account access to check account balances.

The report suggests that banks focus on the key strengths of the mobile realm, such as SMS, mobile browsing, and client application.

"Banks should not offer mobile services that aim to mirror or duplicate the online experience," said President of JupiterResearch, David Schatsky.

"Online banking brought consumers the convenience of banking anytime. Mobile banking can add an anywhere element, but banks should identify where such ubiquity is crucial," he added.

The report also suggests that younger consumers with cell phones could be early adopters of mobile banking, and that those consumers who have yet to experience online banking might be a good target segment as well.

Obviously, security concerns related to mobile bank account access need to be addressed and aptly negated in consumers’ minds.

Sources:

http://publications.mediapost.com/index.cfm?
fuseaction=Articles.showArticle&art_aid=59070

http://home.businesswire.com/portal/site/google/
index.jsp?ndmViewId=news_view&newsId=20070423005672
&newsLang=en