By 2011, 101 million adult Internet users in the US will be banking online.
"When you look closer at the numbers, however, you find that growth in the US online banking population is actually slowing, at least at the top 10 online banks," says Lisa E. Phillips, eMarketer Senior Analyst and the author of the new report, Banking and Bill Paying Online: Chasing Those Digital Dollars. "comScore's online banking report showed the online banking population grew 47.3% in 2004 and dropped to a 27.1% growth rate in 2005."
And growth will slow further, to 6.7% next year and just 6% through 2011 — when eMarketer expects about 48% of the US online adult population to conduct some form of banking on the Internet.
"Nevertheless, financial institutions from banks to insurance companies are trying to move more business online, where the operating costs are lower and profit margins higher," says Ms. Phillips.
Aite Group estimates that for every new account opened online and not through another venue, financial service providers could save $50.
"With an average of 4.2 million applications for all forms of financial products made online per month in 2006, the potential savings are huge," says Ms. Phillips.
By 2010, Aite Group predicts 13% of all checking accounts will be opened online in the US, up from just 3% in 2006.
There are other reasons for banks to push their users online. According to TowerGroup, consumers who bank online interact more often with their banks.
In addition, TowerGroup projects that growth in transactions made online will outpace transaction growth in all other innovations introduced to date — ATMs, branches and call centers — and by 2010 the Internet will handle 31 billion consumer banking transactions per year, compared with 17.8 billion through call centers and 14.7 billion each through branches and ATMs.
