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Report: Online Banking Jumps
Fifty-three million people, or 44 percent of Internet users and one-quarter of all adults, now say they use online banking, according to a study released Wednesday by the Pew Internet & American Life Project.
That is an increase of 47 percent since 2002.
On a typical day, 13 million Americans are performing banking chores online, representing a 58 percent jump from late 2002.
In the nearly five years that the Pew Research Center initiative has been tracking major Internet activities, none has grown faster than online banking.
The rise most likely flows from two major trends.
The first is that as Internet users gain more experience online, they are more likely to perform activities online that involve money, such as online purchases, travel reservations and auctions.
The second trend is that banks themselves have discovered the virtue of online banking and have become more aggressive in offering it as an option to customers. Studies have found that online banking customers are more profitable — they make fewer customer service calls and are less likely to switch banks.
Some key characteristics of online bankers include:
- Broadband and online experience: The spread of online banking has kept pace with the spread of high-speed broadband connections and the increasing maturation of the Internet population.
A full 63 percent of those with broadband at home have tried online banking, compared to 32 percent of those with dial-up connections. Fifty-one percent of those who have more than six years of Internet experience have tried banking online, compared to 27 percent of those with three years or less online experience.
- The rise of GenX: Sixty percent of individuals between the ages of 28 and 39 with Internet connections have tired online banking, compared to 38 percent of wired GenY members (age 18-27) and 25 percent of those with Internet connections.
- Men: Half of men with Internet connections have tried online banking (49 percent) compared with 39 percent of women. Two years ago, the penetration between men and women were virtually the same (31 percent of men, 29 percent of women).
- Higher socio-economic status: Like many other online activities, online banking is seen most often in households with more than $75,000 in income, those who have college and graduate degrees and those in the suburbs. The across-the-board rise, however, did increase the number of online bankers in the working class, rural communities and those without college degrees.
The report did warn that the practice of “phishing,” fraudulent Web sites and e-mails designed to get customers’ bank and credit card information, has the potential to deter customers from banking online.
The report was derived from a survey conducted Nov. 23-30, 2004. It has a margin of error of plus or minus 5 percentage points.