Online banking growth flattens due to security fears

Out-Law News | 07 Sep 2005 | 3:43 pm | 1 min. read

The number of Americans who conduct personal banking online remained at 39% over the last year, according to Ipsos Insight. The market research firm's survey suggest this lack of growth is largely down to customer security concerns.

Advert: Phishing conference, London, 27th October 2005Ispos Insight surveyed 1,000 US adults in early August and found that 83% of respondents who conduct their personal banking online are worried about identity theft.

According to Ipsos Insight, 73% of all those surveyed said that concerns about protecting their personal information from theft were a deterrent against using online banking. Seventy-two percent of respondents also cited concerns about banks selling their personal information to a third party as extremely or very important.

“The industry needs to convey that they are, in fact, addressing the fundamental issues of personal information protection and theft associated with online banking because the public’s misperception is what’s deterring growth,” said Doug Cottings, Senior Vice President of Ipsos Insight’s Financial Services Division.

“There are specific ways companies can make online banking a better experience, beginning with assuring customers that their information won’t be sold to third parties,” he added.

But there was also some good news for the industry, with the survey revealing that those individuals who do bank online are doing so slightly more frequently. Customers have increased the average number of times per month that they pay bills, manage assets, transfer funds and make balance inquiries online.

In particular, more customers are using the internet to sign up for new financial and banking services, with half of all new credit card applications being made online, and slightly more than half of mortgages, home equity loans, and automobile loans being signed up for online.

“Banks’ best option for growing business is deepening existing customer relationships since they are already aware of and experiencing the convenience of online banking,” said Cottings.