SAN FRANCISCO (11/20/08)--Consolidation is rapidly reshaping the online banking market, according to an annual Online Banking and Bill Payment Report by Javelin Strategy & Research (BusinessWire Nov. 18).
As a result of recent acquisitions, three large banks--Bank of America, Wells Fargo and JPMorgan Chase--will control 39% of the online-banking market, up from 25%.
Javelin, a provider of research on financial services, forecasts that the growth rate for online banking adoption will increase 4.6% annually through 2013, and when 83 million households will be banking online.
However, the survey indicates that bank bill-payment services--which are at 49% penetration--are the pivotal opportunity for credit unions and other financial institutions to expand their online services. The survey predicts online services will grow 5.6% annually through 2013 and reach 45 million households.
In addition to the finding about consolidation, key findings and recommendations of the Javelin report are:
Market winners will design and promote online banking based on member-driven architecture. Benefits include a return-on-investment in terms of increased loyalty, reduced costs, fee income, cross-selling opportunities and fraud-prevention savings;
To gain share from third-party billers, financial institutions should upgrade bill-viewing and bill-payment platforms to make the online experience seamless for consumers. Online banking user experiences are key to preparing for a mobile future; and
Promoting electronic statements and making it easy to eliminate paper statements will save money and reduce fraud.
courtesy of cuna.org