Table of Contents
Introduction & Abbreviations
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- Other relevant reports
- Definition
- Abbreviations & Terms
- Abbreviations
- Terms
Executive Summary
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- Market shakeout favors traditional multi-channel banks
- Traditional banks cannot rest upon their laurels
- Online banking: rising star of multi-channel delivery
- “Anytime-anywhere” access and broadband drive adoption
- Online bill payment improves customer stickiness
- Free online bill payment spurs growth
- Security issues continue to hamper growth
- Targeting Gen Y
- Renewed focus on Hispanic market
- Advertising and the Internet channel
- Referral programs may bring in new online banking users
- Security concerns, old habits main reasons for not banking online
- The Future
Market Drivers
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- Introduction
- Rising adult population and number of households
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- Figure 1: U.S. adult population, aged 18 and over, 2001-2004
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- Figure 2: Number of U.S. households, 2000-2003
- Gen Y: prime target for earliest banking relationship
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- Figure 3: American population projections, by generation, 2000-2010
- Generation X leads the pack for online financial services
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- Figure 4: Internet as the preferred delivery channel for conducting complex financial activities, by age, August 2004
- Online banking and women
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- Figure 5: attitudes towards branch banking, by gender, August 2004
- Graph 1: Young adults' online financial activities, by gender, 2003
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- Figure 6: Financial products researched online by young adults aged 18-29, by gender, 2003
- Hispanics adopt online banking
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- Figure 7: Projected U.S. population growth, by race/Hispanic origin 2004-2010
- Targeting Hispanics
- Hispanics’ reasons for choosing primary online bank, satisfaction with services
- Ad spend remains low
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- Figure 8: TV and print ad spend, by Hispanic & rest of population, 2003
- PC ownership and Internet connectivity
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- Figure 9: Total U.S. sales of personal computers, by volume, 1999-2004
- Figure 10: U.S. residential Internet connections, 1997-2005
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- Graph 2: Internet access trends, by type of access, online U.S. households, 2003 & 2004
- Multi-computer households
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- Figure 11: Household ownership of personal computers, 2001-04
- Call center channel in decline
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- Figure 12: Phone and Online Customer Contacts with Wells Fargo, 1999-2003
- Graph 3: Phone and online customer contacts with Wells Fargo, 1999-2003
- Convenience and ease
- Users becoming more sophisticated
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- Figure 13: Channel preference of conducting business for financial services activities, August 2004
- Opening accounts online
- Trends in online bill payment
- Online bill payment improves customer “stickiness”
- Merchant sites versus banking sites
- Free online bill payment
- Consumers worried about online security
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- Figure 14: Reasons for not banking online, August 2004
- Phishing attacks on the rise
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- Figure 15: Number of phishing attacks by top 10 targeted companies, January 2004 and July 2004
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- Figure 16: Percentage of Internet security attacks, by target industry, July-December 2003 and January-June 2004
- Reassuring consumers about online security
Market Size & Trends
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- Figure 17: Use of Internet and online banking, 2002-2004
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- Figure 18: Total U.S. online banking adult users, 1999-2004
- Graph 4: Total U.S. online banking adult users, 1999-2004
- Figure 19: Percentage of U.S. households with a bank account and using online banking, 1998-2003
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Market Segmentation
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- Overview
- Multi-channel banks
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- Figure 20: Online banking users, top multi-channel banking sites, 2002, 2003, 2004*
- Online-only banks
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- Figure 21: Online banking users, top three online-only banking sites, July 2002-July 2004
- Product segmentation and cross-selling
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- Figure 22: Online Financial Transactions, by type of transaction June 2004
- Electronic banking services
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- Graph 5: Households that are e-banking, by type of technology, 1995-2003
Supply Structure
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- RETAIL BANKS
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- Figure 23: Bank institutions, by revenue, 2001-03
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- Figure 24: Total assets, top 10 U.S. retail banks, 2002 & 2003
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- Figure 25: Total assets, top eight multi-channel banking institutions, 1H2004
- Citibank (Citigroup)
- JP Morgan Chase
- Bank of America
- Wells Fargo
- Wachovia
- Washington Mutual (WaMu)
- SunTrust Bank
- U.S. Bancorp
- ONLINE-ONLY BANKS
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- Figure 26: Total assets, key online-only banks, 2002 & 2003
- ING (ING Direct)
- E*TRADE Bank
- NetBank
Advertising & Promotion
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- Introduction
- Banks and financial services continue to spend on advertising
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- Figure 27: Top ad spend growth categories, 1Q2003 and 1Q2004
- Figure 28: Importance of different types of advertising media to banking executives, by amount of assets controlled by their banks, 2002
- Direct mail advertising
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- Figure 29: Online banking direct mail volume, by mailing type, 1999-2004
- Graph 6: Online banking direct mail volume, by mailing type, 1999-2004
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- Figure 30: Select online banking direct mail messaging, October 2003-September 2004
- Ad spend for leading financial institutions
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- Figure 31: Top five banks’ U.S. advertising expenditures, 2002 & 2003
- Trends in multi-cultural marketing
- Bank of America
- Citigroup
- JP Morgan Chase
- Washington Mutual
- ING Direct
The Consumer
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- Introduction
- Account types
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- Figure 32: Checking and savings accounts and debit cards held, May 2003-April 2004
- Online banking usage in last 30 days
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- Figure 33: Penetration of respondents with internet access and respondents who banked online in last 30 days, May 2003-April 2004
- Frequency of online banking
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- Figure 34: Online banking frequency in last 30 days, May 2003-April 2004
- Number of online or offline accounts
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- Figure 35: Number of bank accounts, August 2004
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- Figure 36: Number of bank accounts, by age, August 2004
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- Figure 37: Number of bank accounts, by household income, August 2004
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- Figure 38: Number of bank accounts, by educational attainment, August 2004
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- Figure 39: Number of bank accounts, by race/ethnicity, August 2004
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- Figure 40: Number of bank accounts, by marital status, August 2004
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- Figure 41: Number of bank accounts, by region, August 2004
- Direct deposit, multiple banks and branch visits
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- Figure 42: Banking practices, August 2004
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- Figure 43: Banking practices, by age, August 2004
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- Figure 44: Banking practices, by household income, August 2004
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- Figure 45: Banking practices, by race/ethnicity, August 2004
- Online banking activities
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- Figure 46: Online banking activities, August 2004
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- Figure 47: Online banking activities, by gender, August 2004
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- Figure 48: Online banking activities, by age, August 2004
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- Figure 49: Online banking activities, by household income, August 2004
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- Figure 50: Online banking activities, by race/ethnicity, August 2004
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- Figure 51: Online banking activities, by number of people in household, August 2004
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- Figure 52: Online banking activities, by region, August 2004
- Frequency of online banking activity
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- Figure 53: Frequency of online banking activity, August 2004
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- Figure 54: Frequency of online banking activity, by age, August 2004
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- Figure 55: Frequency of online banking activity, by number of people in household, August 2004
- Perceptions of and reasons for choosing primary online bank
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- Figure 56: Reasons for choosing online bank and attitudes towards primary online account, August 2004
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- Figure 57: Reasons for choosing online bank and attitudes towards primary online account, by age, August 2004
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- Figure 58: Reasons for choosing online bank and attitudes towards primary online account, by household income, August 2004
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- Figure 59: Reasons for choosing online bank and attitudes towards primary online account, by race/ethnicity, August 2004
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- Figure 60: Reasons for choosing online bank and attitudes towards primary online account, by region, August 2004
- Reasons for not banking online
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- Figure 61: Reasons for not banking online, August 2004
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- Figure 62: Reasons for not banking online, by gender, August 2004
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- Figure 63: Reasons for not banking online, by age, August 2004
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- Figure 64: Reasons for not banking online, by region, August 2004
- Conclusion
Future & Forecast
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- FUTURE TRENDS
- Burgeoning broadband
- Paperless consumer banking
- Person-to-person transfers
- Rethinking generations
- Cross-selling: the mantra of the bank-cum-retail store
- Security issues
- Free online bill payment
- New liabilities: online accessibility
- Net-only banks open additional channels
- MARKET FORECAST
- U.S. online banking households will grow to at least 53 million
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- Figure 65: Forecast of U.S. online banking households, 2004-2009
- Number of users will reach 77.7 million by 2009
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- Figure 66: Forecast of U.S. online banking users, 2004-2009
Appendix: Trade Associations
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