One in every five U.S. households banks online, according to an eMarketer report issued yesterday, a figure expected to rise to 26.1 percent by 2004.
“The rate of growth will diminish over the next few years, but it will remain steady and positive,” said David Hallerman, senior analyst at eMarketer. “By the end of 2005, 31.5 million American households will be banking on the Internet.”
Online bill payment, what eMarketer calls the killer app for e-banking, is driving growth online and offline for banks, according to the report, “Interactive Banking: Integrating Online Into Traditional Channel.”
Though electronic bill payment is not profitable for many banks, eMarketer said, it is valuable because customers who sign up for e-billing tend to be more affluent and more loyal.
“A few years ago banks hoped that the Internet would reduce traffic in higher-cost channels such as the branch and the call center, but that isn't happening,” Hallerman said. “Customers want the same banking services no matter the channel: Internet, branch, ATM or call center. Banks are finding, however, that combining the Internet and in-person channels is often the best way to deal with complex financial tasks such as mortgages and financial planning.”