Over 32 Million U.S. Households Will Be Banking Online by 2003, According to IDC
Tuesday June 1, 8:30 am Eastern Time
Company Press Release
SOURCE: International Data Corporation
Banks Cash in on the Online Craze
FRAMINGHAM, Mass., June 1 /PRNewswire/ -- Online banking is swiftly charging from its position as an extravagant application used by a select few to a convenient functionality craved by the growing horde of Internet users. Research from International Data Corporation (IDC) indicates there were nearly 6.6 million households banking online in the United States alone in 1998. By 2003, that number will increase substantially -- to more than 32 million.
''A combination of factors is driving the explosive growth in online banking,'' said Paul Johnson, senior analyst with IDC's Internet and eCommerce Strategies program. ''There has been a proliferation of low-cost PCs and other networking devices 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 Internet users are becoming comfortable using the Internet as a transaction-based medium.''
The increasing number of banks offering Web-based banking services is also triggering the market's growth. IDC estimates the number of banks offering online banking services will increase from 1,150 in 1998 to 15,845 by 2003, primarily via the Web. These numbers represent 6% and an incredible 86%, respectively, of all U.S. commercial banks and credit unions. ''Banks are beginning to realize that online banking offers competitive advantages, operational efficiencies, and direct marketing capabilities,'' Johnson said.
According to IDC, online banking is evolving through three phases. The first phase offers functionality similar to what is available through telephone banking systems -- access to account balances and transaction data. The access is provided through a dial-up or browser-based service. The second phase emphasizes interactive technologies such as online bill payment and personalized reminder services. The third phase involves direct marketing of credit and lending services, personalized financial management features, and services such as securities trading and insurance offerings.
''A strong link exists between banking, bill payments, and the Internet. 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,'' Johnson said.
IDC's bulletin, Online Banking Forecast, 1998-2003: On the Money (IDC #B19193), provides a complete analysis on the U.S. online banking market. The bulletin includes U.S. forecasts of the number of Internet users who are banking online, the number of households that are online, the number of U.S households that are banking online, the number of banks and credit unions offering online banking services, the number of direct dial and Web-based online banking users, and revenue derived from online banking service fees. In addition, the bulletin discusses the evolution of online banking and looks at the different type of banks offering these services. To order a copy, contact Sue Beauregard at 1-800-343-4952, ext. 4774 or at sbeauregard@idc.com.
About IDC
International Data Corporation is the information technology industry's most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world's leading IT suppliers as well as IS professionals in finance, insurance, entertainment, advertising, consumer goods, and publishing. IDC's research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at idc.com.
IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.
All product and company names may be trademarks or registered trademarks of their respective holders.
SOURCE: International Data Corporation
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