Abstract
Overview
With over half of the U.S, household population now banking online, online
banking and bill pay have finally achieved mainstream acceptance. Over the
past three years online banking and bill pay adoption have plateaued, and 38
million consumers are less likely to recommend online banking in 2007 as in
2005. Javelin has used five years of longitudinal data to create a forecast
model to deliver projections of adoption through 2012 for online banking,
consolidated bill presentment, and online bill pay (financial institution and
biller-direct). Javelin also explores the benefits of green banking and its
impact on consumer behavior and adoption. Using quantitative consumer research
and case studies of select top ten U.S. financial institutions (FIs) Javelin
has clearly outlined the next steps for FIs and vendors to reinvigorate
growth, adoption, and profitability of the online channel.
Primary Questions
- Where is online banking and bill pay headed over the next five years?
- What prevents holdouts from adopting online banking and how can they be
successfully persuaded to switch?
- What capabilities must be included in online banking and bill pay to
capture market share?
- Which marketing and consumer education messages will best drive consumer
adoption?
- How can online bankers be migrated into online bill payers?
- Which new features and enhanced services will increase transaction volume
and loyalty among existing online bankers?
Findings and Analysis
In 2007, 61 million households are banking online, representing 53% of the
U.S. household population and corresponding to 33% of U.S. adults. Javelin
projects that the number of online bankers will grow to 82 million households
by 2012, a compound annual growth rate (CAGR) of 6.1%. Bank bill pay will
begin to catch up to biller-direct bill pay, as preference and product finally
come together in a cohesive experience for the customer. Online banking has
met three main needs, convenience, control, and cost savings, yet non-online
bankers are becoming more entrenched in their points of view, with almost half
strongly preferring to deal with people and fearing security breaches. Finer
demographic cuts and analysis of new technologies reveal specific ways to
address holdouts. Javelin has identified six key strategic areas that will be
fully covered in this all-inclusive report: green banking, alerts, expedited
payments, personal financial management, mobile banking, and security.
Audience:
Financial institutions, specifically online banking groups; security and
messaging vendors to the financial services industry
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