Users Bank on the Internet
Online money management has experienced phenomenal growth in the last two years, but some Internet users aren't prepared to rip up their paper checks and bill statements yet.
The Internet has revolutionized the way people manage their money, as indicated by a reported 164 percent increase in online banking since 2000. The Pew Internet and American Life Project found that 32 percent of Internet users (roughly 37 million Americans) have done their banking online in 2002 – up from 17 percent (roughly 14 million Internet users) in 2000 – and 10 percent are currently e-banking on a daily basis.
While e-banking may not be the most popular activity – gathering hobby information weighs in at 77 percent, e-shopping is conducted by 62 percent, and making or buying travel arrangements are at 50 percent – online banking has the highest growth rate, largely due to its wide reach.
Pew’s research, conducted during fall 2002, indicates that there is little variation in e-banking activity between men and women (33 percent versus 30 percent), age groups (33 percent of 18-29 year olds; 36 percent of 30-49 years olds; and 27 percent of 50-64 year olds), and ethnicities (33 percent of Hispanics, 32 percent of Caucasian, and 30 percent of African-Americans bank online).
The biggest disparities in e-banking activity occur among education, income levels, and online experience. More than 4-in10 (41 percent) of online bankers are college graduates compared to 23 percent of those with a high school education; 44 percent of e-bankers are in $75,000+ annual income households, as opposed to 21 percent of those in less than $30,000 per year households; 39 percent of online veterans (4+ years), 20 percent of those with 2-3 years of experience, and 6 percent of newbies (less than one year) bank via the Internet.
A TowerGroup survey of nearly 4,000 U.S. households revealed strong growth in the online banking sector, but found that many still maintain a preference for paper checks and paying bills with conventional methods.
While 13 percent of consumers have paid bills online in 2002 (up from only 2 percent in 1998), 41 percent of e-bankers prefer to write checks and use the U.S. mail for bill payment purposes.
“The use of EBPP [electronic bill presentment and payment] [define] services is accelerating, but not without concern and hesitation demonstrated by many consumers,” said Elizabeth Robertson, senior analyst in the TowerGroup e-Banking practice.
On the European front, Jupiter Research (a unit of this site’s corporate parent) predicted that 39 percent (roughly 54.1 million) will bank online by the end of 2002, stretching to 51 percent (103 million) by the end of 2007.
Sweden will lead the charge, as more than 54 percent are expected to bank online through 2002 – growing to over 63 percent in 2007 – followed by Finland and Norway. Internet users in Greece are least likely to bank online, accounting for just over 13 percent in 2002, and 30 percent in 2007.
