Fiserv Survey Cites Online Banking, Bill Pay Growth

About 80% of American households that have Internet access now use it for online banking, while nearly as many use bill pay.

That’s according to Fiserv Inc.’s ninth-annual consumer billing and payment trends survey, conducted by The Marketing Workshop and Harris Interactive.

The survey’s results were released this week and reflect the habits of the 88.2 million American households that have Internet access, the Brookfield, Wis., company said.

It found that 69.7 million households now use online banking–primarily for balances, histories and transfers–and that 64.4 million pay at least one bill online through their financial institution’s Web site or that of a biller. That’s more than 2 million more households than reported the same last year, Fiserv said.

A video detailing findings from the survey is at www.fiserv.com/trends.htm.

Online Banking: Still Not There

With all the hype around mobile banking’s progress and promise, it’s easy to forget that good ol’, PC-based online banking still has its own usage barriers.

Outside of Gen X users, according to a new Forrester Research report, many bank customers enrolled in online banking still aren’t using the Web to perform billpays, transfer funds or even check their balances. Forrester’s benchmark study of consumer technology use found that while 60 percent of users age 29-42 have gone online to check account balances, less than 50 percent of Baby Boomers and 40 percent of senior citizens have done so. And those spunky Gen Y’ers born with a mouse in hand go to Web sites less often for banking and billpay than the 43-and-up boomers, says Forrester.

If you exclude Gen X’ers, “online banking is still nascent,” states the report. “Community banks serve fewer than half their online customers online, and only 23 percent of consumers pay their bills at a bank’s Web site—despite 10 years of trying.”

Use of online banking by Americans decreases

A study shows that the number of US customers who access online banking services at 10 most-visited online banks decreased in 2007 as compared to 2006. The number of customers who logged into a liquid deposit account (checking, savings, or money market account) registered an increase to 8.1 percent in Q4 2007, compared to a 9.5-percent growth rate in 2006.

In Q4 2007, the number of online bankers reached almost 47.3 million, reflecting a growth in comparison with the same period in 2006, when 43.7 million Americans logged on to a liquid online account. From Q2 2007 to Q3 2007, the number of internet banking customers who logged on decreased by almost 1 percent, the first quarterly decline that the industry faced in the past five years.

As far as customer satisfaction across financial service institutions is concerned, 72 percent of respondents (mostly in the younger age group of 24 to 44 years) declared that they are highly satisfied with services offered by banks, a 2 percent growth in number from 2007, 65 percent with services provided by credit card companies and 70 percent with brokerage firms' services.

Online banking customers are also interested in different new media services. 14 percent of respondents claim that they are interested in blogging, 25 percent are interested in chatting with the bank, 30 percent in personal financial management and 23 percent in having a widget that displays their account balance. The interest in mobile banking has grown to 25 percent in 2008, an increase by 2 percent from 2007. 61 percent of clients accessing mobile banking services claim that they would like to get account balance information via text messages and 57 percent by means of a mobile browser.

Nearly 53 percent had their financial statements delivered in a paperless format, while 46 percent prefer to have a hard copy of the statement for record-keeping and 38 percent want to have a paper bill as a reminder to make a payment.

Voice biometrics: coming to a bank near you

At a recent bankers' conference in the US, Australian speech application company VeCommerce presented delegates with a challenge: fool our voice biometric technology and win $US1000. No one did, vindicating the company's claim that the technology is robust enough to be deployed in multifactor authentication for applications such as online banking.

According to Steve Lewis, general manager business consulting for VeCommerce in Australia, while deployments of voice biometric technology have to date been fairly limited, that is set to change.

"We are a the cusp of seeing some major deployments. We are in the process of developing a system for a top tier financial services organisation in Australia which will roll out at the end of this year. That will be a very large scale deployment...Two of the others are looking at similar solutions: once one goes the others will follow."

Lewis said the banks were interested particularly in applying the technology to Internet banking.

"There is so much phishing going on that people are getting nervous about the security of their passwords. A number of banks secure now their transactions through SMS tokens - they send a one time password to your mobile phone. Our product allows the bank to generate a phone call to your mobile phone then it compares your voice to a stored profile."VeCommerce suggests that a voice profile eliminates the need for remembering identifiers such as PINs, passwords, mother's maiden name, or for having special equipment such as PIN pads or fobs.

Also, in situations where callers are required to identify themselves to a call centre operator, it avoids the caller having to provide information such as account number, date of birth, etc which could easily be stolen and used in subsequent identity fraud.

Gartner: Regular Online Banking Use Climbing

A new survey From Gartner shows that, to the surprise of no one in the financial services industry, online banking continues to grow as a mainstream access channel.

The polling of more than 2,000 adults last summer in the UK and the U.S. now finds that 33 percent of all US adults now regularly bank online – a trend less pronounced in the UK, where its 14 million or 26 percent of the British population.

“The current usage levels in both countries show that adoption is now taking place within the mainstream of consumers, among people who use new channels and services if, and only if, they see intrinsic value from the new technology,” said David Schehr, research director for Gartner’s Financial Services research team, in a statement. “Online banking has clearly made this transition in consumer minds.”

Among other key findings: online banking doesn’t result in any less branch-banking activity by customers, but is linked to higher use of ATMs and telephone banking; and online banking is acclimating customers to higher support level expectations.

Online banking is also making customers more open to emerging transactions channel – a curious finding given other recent Gartner viewpoints that predict mobile banking may become the Edsel of our era (see BTN’s Talk Back question of the week).