Although the absolute number of consumers banking online grew 100,000 to reach 6.3 million in the past year, 3.1 million US adults have discontinued their use of online banking, according to the Cybercitizen Finance study by Cyber Dialogue.
According to the study, only 35 percent of the online bankers that have discontinued their service were inclined to try it again.
“Although Cybercitizens begin banking online to save time, more than 50 percent have discontinued use because they find the service too complicated or were dissatisfied with the level of customer service,” said Michael Weiksner, Cyber Dialogue’s Manager of Finance Strategies.
A majority of Internet users (63 percent) are aware of online banking, and 13 percent intend to begin banking online within the next 12 months. According to Cyber Dialogue, financial institutions must improve their customer service to maintain their online customers.
Research by GartnerGroup’s Dataquest unit has found that the number of US households using PC banking applications will more than triple in the next five years, to more than 24.2 million by 2004. “Anytime access” was cited as the primary motivator for online banking, according to Dataquest.
In contrast to online banking, only 3 percent of investment traders who are online have discontinued trading online and 85 percent of current traders are satisfied with their service. As a result, the number of online traders has grown 53 percent from 4 million in July of 1998 to 6.1 million in July of 1999.
|Cybercitizen Finance Results
(million of users)
|Current online users||53.5||65.4||22%|
|Manage finances online||18.1||23.1||28%|
|Online insurance seekers*||8.8||12.9||47%|
|Online credit card applications||3.3||4.2||27%|
|Online loan applications**||3.2||4.6||44%|
|Online mortgage applications**||2.7||3.2||19%|
|* includes those who have sought, applied, or intend to buy insurance online
** includes applied or intend to apply online
Source: Cyber Dialogue
According to a report by Gomez Advisors and Harris Interactive, 16.28 million investors, more than three times the number of current online investors, are poised to begin online trading. Once these investors go online, the value of the assets held in online investment accounts will increase to more than $1.1 trillion.
“Online brokerages like E*Trade and Schwab have demonstrated real leadership by investing aggressively in marketing and customer service,” Weiksner said. “Banks must react in Internet time or risk losing the banking relationships of their most valuable customers.”
Cyber Dialogue’s study was based on interviews with 1,000 Internet users and 1,000 non-Internet users. Respondents were asked about their use of online and offline financial services.
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