Online banking up by 30% as ease, availability grow
By Eileen Alt Powell
Associated Press
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A study released yesterday of online banking at the nation's 10 largest financial institutions found that 22 million consumers logged in to their accounts in March, an almost 30 percent increase from a year earlier.
Most went online to view their checking or savings account balances, the study showed. But many were monitoring their credit cards, paying bills, managing credit lines or paying mortgages.
"The banks are doing a lot of promotion of their services," said Jim Larrison, head of the banking practice division at comScore Networks, which conducted the study. "The (online banking) leaders are also spending a lot of time and technology resources creating applications that are really user-friendly."
One of the main attractions of online banking is the 24-hour convenience.
"I was traveling quite a bit and often away for quite a while, and I worried about keeping current," said Diana Nichols, 73, a retiree who lives in San Francisco.
Nichols, who described herself as "not particularly computer literate," said she set up her Bank of America online account so her bills would be paid automatically.
ComScore said that Bank of America, based in Charlotte, N.C., remains the leader in attracting online banking customers while New York-based Citibank has seen the strongest growth in the adoption of online bill paying.
Both banks "have focused internally, on their existing customers," luring them from brick-and-mortar branches to the Internet, Larrison said.
Stand-alone Internet banks have not been as successful, he added, with the exception of ING Direct, which is based in Wilmington, Del.
"They offer great savings products and pay great interest rates," Larrison said.
Online banking use expanded more than tenfold from 1996 to 2003, TowerGroup Research, based in Needham, Mass., said in a report last month. TowerGroup expects close to 37 percent of all U.S. households to be registered to bank online by 2007 — a total of 42.5 million households.
Bank of America has 10.9 million active online banking customers, 4.3 million of whom pay bills online.
More than 4.6 million Americans paid at least one bill via a bank online payment service in the first quarter this year, up from 1.9 million two years earlier, the study said.
The average customer, it said, "pays more than 14 bills per quarter with a total value of more than $3,500."
Still, the results found that most consumers — 84 percent — still prefer to pay bills through a utility or merchant's site rather than through a bank site.
