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Industry Soaring.-A
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E-Commerce
as a Way of Life.-Internet
usage as a part of people's everyday lives is increasingly pervasive
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E-Banking
Blooming, but Needs New Apps.
While millions of Americans are migrating from offline to online
bill payment, a new study says that the banks offering online
banking services must come up with new applications, if they
are to remain competitive in the future.
Gartner (Quote, Company Info) Thursday released a new study
on the growth of the online bill payment market in the U.S.
The report says that in 2003 online bill payment is growing
in popularity, and it expects the market to grow by close to
38 percent to 40 million users.
With the surge in popularity, Gartner expects banks to lower
prices and create incentives to garner online banking customers.
The study says that while most consumers that utilize online
banking view and pay their bills, banks need to do more to create
other applications, which will hook customers into other revenue
streams.
Gartner says it conducted its Web-based survey of online banking
habits in September 2002 of more than 1,000 adults that spend
time online. The survey found 79 percent of those surveyed view
their bills directly at the biller's site, while only 10 percent
views bills through what it calls "a bank consolidation
service."
Gartner says that many consumers go directly to billers' sites
because it is simple and free to pay at those Web locations.
Gartner in its study challenges banks to "provide more
value with their online bill payment applications to attract
and retain profitable customers as well as reap the significant
payment-relate revenue," it said in a press release.
Gartner says online bill payment is an effective customer retention
strategy, and that consumers that pay bills through their bank
online are twice as likely to stay with their banks. The study
says consumers don't switch, in part, because of the trouble
of setting up online payments with another bank.
The survey goes onto say 45 percent of consumers use online
bill payment in an effort to save time, while 10 percent said
cost savings is the main reason they've migrated to online bill
payment.
Gartner suggests bank consider discounts and free trial online
banking services in an effort to attract and retain customers.
Gartner goes onto say that bank should consider offering "value-added
features such as customer self-service, automatic enrollment,
bundling of automated payment plans and a user interface that
does not impose bank preferences on the customer."
A separate study released by The Pew Internet & American
Life project in November 2002, found that 37 million Americans
have done some of their banking online, a 164 percent increase
since early 2000. Pew's Online Banking Report predicts that
more than 50 million U.S. households will bank online by 2010.
