electronicbanker.com
Online Banking Booming, Says IDC
Online banking's flourishing growth is propelling its audience from a technologically elite cadre of users to a true mass market, according to research from International Data Corp. The new numbers from the Framingham, Mass.-based research and analysis firm predict more than 32 million U.S. households will bank online by 2003, a steep rise from the 6.6 million households banking online in 1998.
The report, Online Banking Forecast, 1998-2003, suggests that one factor sparking the burgeoning market is the increasing number of banks providing Web-based services. IDC forecasts the number of financial institutions offering online banking, primarily via the Web, will shoot up from 1,150 in 1998 to 15,845 by 2003. Another way of looking at the same numbers is that online banking will expand from a mere 6% of all U.S. commercial banks and credit unions in 1998 to an extraordinary 86% in 2003.
"A combination of factors is driving the explosive growth in online banking," says Paul Johnson, senior analyst with IDC's Internet and eCommerce Strategies program. "There has been a proliferation of low-cost PCs … in the home market, which is causing a surge in the number of Internet users. Because many of the security concerns have been alleviated, these [people] are becoming comfortable using the Internet as a transaction-based medium."
Johnson also delivers a persuasive warning to banks. "A strong link exists between banking, bill payments and the Internet," he says. "Although there is still uncertainty in the bill presentment market, banks must seize this tremendous opportunity in front of them. Online banking may be the critical service that enables banks to maintain their role as the dominant provider of financial services." |
