The U.S. Online Retail Banking Market

Feb 1, 2005
222 Pages - Pub ID: LA959462
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Online banking and bill pay provides unprecedented convenience and control for the more than one third of adults who currently bank by computer. Online banking and bill payment customers can not only perform customary banking transactions, including conducting balance inquiries, transferring between accounts and obtaining statement reconciliations online, but can also receive and pay bills electronically via the Internet, allowing them to pay virtually any bill, whether it arrives over the Internet or through traditional mail, to anyone.

Yet the market is being further transformed by new services and features, such as e-bills, account aggregation, interbank transfers, and customer alerts (as well as explosive bill payment growth), as online banking providers continue to find ways to drive online and banking and bill payment growth, build and retain their customer bases, manage costs, and drive profits. The impact of each of these services and features and market drivers, and much more, is covered in the new Packaged Facts report, The U.S. Online Retail Banking Market.

What You’ll Get in this Report
The U.S. Online Retail Banking Market examines the latest trends in the industry. It closely assesses what the industry players are up to and provides a comprehensive features and services analysis that details the types of offerings individual players provide, and for what cost. The report also breaks down the 15 largest U.S. banks into two sets of profiles; one detailing services and features, the other detailing bank structure and online banking statistics. The report also assesses how banks are integrating their online banking functions into a broader customer-centric service offering that emphasizes convenience and customer care at every end of the retail banking spectrum.

Additionally, The U.S. Online Retail Banking Market provides a comprehensive demographic look at the online banking and bill pay consumer. Income, race, gender, and education factors, as well as security and fraud concerns, are analyzed in detail to help shape a deep portrait of today’s online banking and bill pay users.

Report Methodology
The information in The U.S. Online Retail Banking Market is based on both primary and secondary research. Primary research involved interviews with marketing, public relations and analysts within the financial industry and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature and corporate filings. Data on consumer behaviors and attitudes was derived from Simmons Market Research Bureau spring 2004 National Consumer Survey.

Chapter 1: What Is Online Banking
  • Electronic Payment Systems: An Overview
  • Electronic Payments Systems
    • ATM and Debit Systems

  • Direct Deposit and Automatic Bill Payment
    • Direct Deposit
    • Automatic Bill Payment

  • Stored-Value Cards
  • Internet Banking and Electronic Bill Payment
    • The Biller Site
    • The Bank Site

  • Internet Banking and Electronic Bill Payment: Industry
    • Background

  • Online Banking Establishes Itself within the Mainstream
    • Table 1-1: Percent of Internet Users 15 and Older Who Bank Online

  • Bringing It All Together
    • Integrated Features
    • Multi-Channel Strategy
    • Competitive Advantage to Multi-Channeling
    • Electronic Bill Payment and Presentation

  • The Electronic Bill Payment and Presentation Participants
    • Billers
    • Consumer Service Providers (CSPs)
    • Brick-to-Click and Internet Banks
      • Brick-to-Click Banks
      • Virtual Banks

    • Billing Service Providers (BSPs)
    • The Consumer

  • Electronic Bill Payment and Presentation: Payment and Presentation Methods
    • Personal Finance Software Model
    • The Consolidator Model
    • Biller-Direct
    • Electronic Bill Presentation: e-Bills

  • Online Banking Advantages and Disadvantages
    • Advantages of Online Banking To The Consumer
    • Disadvantages of Online Banking To The Consumer
    • Benefits to Banks
      • Customer Loyalty and Retention; Cost Savings
      • Profit and Retention Considerations

  • The Outsourcing Question
    • In-House vs. Outsource
    • Wachovia’s Recent Switch to Outsourcing

  • Melding Online Banking and Branch Banking as Part of Overall Relationship Building Strategy
    • Why Expand Branches? Consumers Still Use Branch Banking!
    • Case Study: Bank of America
    • Case Study: National City
    • Case Study: Key Bank
    • Key Terms
    • Account Aggregation
    • Automated Clearing House (ACH)
    • Automatic Bill Payment
    • Online Bill Payment
    • Direct Deposit
    • e-Bills
    • Electronic Benefits Transfer (EBT)
    • Electronic Funds Transfer (EFT)
    • Encryption
    • 128-bit Encryption
    • FedWire
    • Global Certificate
    • Inter-Institution (Inter-Bank) Transfer
    • Online Banking
    • Payee
    • Personal Identification Number (PIN)
    • Point-of-Sale (POS) Network
    • Secure Socket Layer (SSL)
    • Smart Card

Chapter 2: Market Drivers

  • Electronic Payments Growth
    • Electronic Payments Exceed Check Payments for the First Time in 2003
    • 2004 Federal Reserve Payments Study: Key Findings
      • Check Payments
      • Electronic Payments9
      • Why the Shift Away from Checks?
      • Q1 2004 Check Volume Continues to Slide
      • Check 21

    • Direct Deposit
    • Table 2-1: 2002 Number of People Using Direct Deposit
    • Consumer Cost Savings of Direct Deposit
    • Consumer Cost Savings per Direct Deposit Sample Calculation:
    • Electronic Banking Households Rise
    • Table 2-2: Percentage of U.S. Households That Use Various
      • Electronic Banking Technologies

    • Online Banking and Internet Usage Correlation
    • Limited Internet Access Translates into Limited Online Banking
    • Broadband on a Tear
    • 19.9% of 2003 U.S. Households Have Broadband
    • Table 2-3: U.S. Broadband vs. Narrowband Connections (At-Home)
    • 2004 FCC Data
    • Online Bankers More Likely to Use Broadband Than Dial-up Users
    • Table 2-4: Percent of Internet Users 15 and Over that Use the Internet for Online Banking 2003
    • Table 2-5: Percent of Internet Users 15 and Older Who Bank Online
    • Broadband - Youth; Narrowband - Seniors
    • Table 2-6: Broadband vs. Narrowband Connections by Age Group
    • Population Density and Median Income Are Growth Factors
    • Broadband Features: Cobrowsing
    • Customer Sign-Up and Retention
      • Driving the Convenience Factor
      • Encouraging Sign-Up
      • Inter-Transfer Capabilities Help Open Accounts
      • Providing Extra Functionality
      • Usage Incentives
      • If It Is Free, They Will Come
        • Cash Back
        • Rewards
        • Rewards and Free Bill Pay: A One-Two Punch
        • Banks: What’s to Lose?

      • Customer Retention Tied to Online Banking
      • Customer Retention Tied to Bill Pay
      • Online Bill Pay Adoption
      • Fee Waiver and Channel Integration Differentiate Banks
      • Banks Must Be Doing Something Right: Online Bill Pay Increases Online Satisfaction
      • Cross Selling Opportunities
        • Table 2-7: Cross Selling Opportunities for Multi-Category Financial Service Sellers
        • Live Chat as Cross Selling Tool
        • Table 2-8: Wells Fargo Internet Channel Sales Increase
        • Table 2-9: Wells Fargo Internet Channel Sales Increase: Q2 2003 to Q2 2004
        • Online Banking Drives Profits; Free Bill Pay a Key Driver
        • e-Bills a Cost Saver and Growth Driver

    Chapter 3: Banking Profiles

    • Bank of America Corporation
      • Fleet Acquisition
      • Business Segments
        • Consumer Banking

      • The Online Banking and Bill Pay Leader
      • Q3 2004 Online Banking Figures
      • Selected Comparative Statistics
      • Table 3-1: Active On-line Banking Subscribers*
      • Table 3-2: Bill Payment Volume* (dollars in millions)
      • Table 3-3: Online Banking DDA Household Penetration*
      • 2003 Online Banking Figures
      • Reasons for Growth

    • Bank of New York Company, Inc.
    • JP Morgan Chase
    • Merger with Bank One
    • Business Segments
    • Retail Financial Services (RFS) Segment
    • Consumer Banking Outlook
    • Online Banking
    • Consumer & Small Business Banking
    • Table 3-4: Consumer & Small Business Banking

  • BB&T Corporation
  • Online Banking
  • Citibank
  • Online Banking
  • Comerica Inc
  • Golden West Financial Corporation
  • KeyCorp
    • Consumer Banking Business Segment
    • Online Banking
    • Table 3-5: KeyCorp 2002-2003 Online Banking Figures
    • Table 3-6: KeyCorp Q3 2004-Q3 2003 Online Banking Figures

  • National City
    • Business Segments
    • Consumer and Small Business Financial Services (CSB)
    • Online Banking
    • Recent Online Banking Growth

  • PNC Financial Services Group, Inc.
  • Regional Community Banking Segment
  • United National Bancorp Acquisition
  • Table 3-7: Regional Community Banking Facts and Figures: 2003 and 2002
  • 2003 Regional Community Banking Highlights
  • SunTrust Banks Inc
  • Online Banking
  • U.S. Bancorp
  • Consumer Banking Segment
  • Online Banking
  • Wachovia Corporation
  • SouthTrust Merger
  • General Bank
  • Online Banking
  • Facts and Figures
  • 2003 General Bank Facts and Figures
  • Washington Mutual Inc
  • Business Segments
  • The Consumer Group
  • Retail Banking and Financial Services
  • Mortgage Banking
  • Online Banking
  • Retail and Online Banking Statistics
  • Table 3-8: Washington Mutual Total Retail Checking Accounts
  • Table 3-9: Washington Mutual Home Equity Loan and Line of Credit Balance Growth
  • Table 3-10: Washington Mutual Free Checking Cross-Sell Char
  • Table 3-11: Washington Mutual Retail Banking Store Growth
  • Wells Fargo & Co
  • Business Segments
    • Online Banking
    • Table 3-12: Wells Fargo Online Banking Customers
    • Table 3-13: Wells Fargo Internet Channel Sales Increase
    • Table 3-14: Wells Fargo Internet Channel Sales Increase: Q2 2003 to Q2 2004

Chapter 4: Market and Product Trends

  • Biller-Direct Still Prevails; Bank Aggregation Gathers Steam
  • Instant Credit and Billing Detail Gap Closing
    • Instant Crediting To The Account Not There Yet
    • But The Gap Is Closing
    • Bank Aggregation Solutions Provides Only A Summary E-Bill View

  • Real-Time Payments And Enhanced Billing Detail Around The Corner
  • Insufficient Funds Fees
  • Banks Win on Security Issue
  • Channel Integration
  • Multi-Channel Strategy
  • Competitive Advantage to Multi-Channeling
  • Challenges to Integrate Internet into Other Customer Channels
  • Integrated Channel Offerings: An Example
  • Streamlining Enrollment Process: PIN and Social Security Number Only
  • Top 15 U.S. Bank Holding Companies by Total Assets
  • Table 4-1: Top 15 U.S. Bank Holding Companies by Total Assets
  • Product Features Trends at a Glance
  • Product Features
  • Free Bill Pay
  • Not Always “Free”
  • Use with Microsoft and Quicken Normally More Expensive
  • Quicken and Microsoft Money Limit Banking Features
  • Table 4-2: Wachovia Online Banking Access Comparison
  • e-Bills
  • Wireless Banking
    • Alerts

  • Alerts Sweeping the Industry
  • Bank One’s Account Alert Offerings: A Synopsis
    • Checking Account Alerts
    • Savings Account Alerts
    • Credit Card Account Alerts
    • Line of Credit Account Alerts
    • Loan Account Alerts

  • Bank of America’s Alerts
    • Cell Phone Alerts
    • Text Chat

  • Online Banking Kiosks
  • Zero Liability Policies
  • Bill Pay Guarantees
  • Inter-Institutional Transfers
  • Demo Videos0
  • Increase in Self-Service Options0
  • Listening to Customer and Customer Service to Craft the Product
  • Other Enhancements
    • Last Payment Date and Amount Information
    • Payment by Due Date
    • Disclosure of Paper vs. Electronic Settlement of Payments

Chapter 5: Bank Website Profiles

  • Table 5-1: Top Banks: Product Features Summary
  • Bank of America
  • Table 5-2: Bank of America Product Features Summary
  • Transfer Information
    • Inter-bank Transfers
    • Canceling Transfers and Payments
    • Transfer Availability

  • Quicken and Microsoft Money
  • Table 5-3: Quicken Account Transaction History
  • Bank of New York
  • Table 5-4: Bank of New York Product Features Summary
  • Online Banking Fees
  • Check Imaging
  • Canceling Bill Payments
  • Bank One
  • Table 5-5: Bank One Product Features Summary
  • Unique Features and Important Omissions
  • Online Banking Fees
  • Alerts
    • Checking Account Alerts
    • Savings Account Alerts
    • Credit Card Account Alerts
    • Line of Credit Account Alerts
    • Loan Account Alerts

  • BB&T
  • Table 5-6: BB&T Product Features Summary
  • Important Omissions
  • Online Banking Fees
  • Table 5-7: BB&T Online Banking Fees
  • Transfer Information
  • Table 5-8: BB&T Transfer Information
    • Transferred Funds Availability

  • Table 5-9: BB&T Transferred Funds
  • Citibank
  • Table 5-10: Citibank Product Features Summary
  • Unique Features
    • Variable Linking
    • SafeWeb Online Fraud Guarantee

  • Online Banking Fees
  • Table 5-11: Interbank Transfers
  • Alerts
  • Fifth Third Bank
  • Table 5-12: Fifth Third Product Features Summary
  • Important Omissions
  • Online Banking Fees
  • Golden West Financial
  • Table 5-13: Golden West Financial Product Features Summary
  • Key Bank
  • Table 5-14: Key Bank Product Features Summary
  • Online Banking Fees
  • Account Aggregation0
  • Table 5-15: Quicken and Microsoft Money
  • National City
  • Table 5-16: National City Product Features Summary
  • Online Banking Fees
  • Quicken & Money
  • Alerts
  • PNC
  • Table 5-17: PNC Product Features Summary
  • Unique Features
    • Liability and guarantee policy
    • Funds Security
    • On-time Payments
    • Privacy4

  • Online Banking Fees
  • Alerts
  • SunTrust Bank
  • Table 5-18: SunTrust Product Features Summary
  • Online Banking Fees
  • Account Aggregation
  • Alerts
  • Quicken and Microsoft Money
  • U.S. Bancorp
  • Table 5-19: U.S. Bank Product Features Summary
  • Online Banking Fees
  • Quicken and Microsoft Money
  • Liability Policy
  • Alerts
  • Wachovia
  • Table 5-20: Wachovia Product Features Summary
  • Online Banking Fees
  • Our Commitment to You
  • Table 5-21: Online Banking Access Comparison
  • Account Aggregation
  • Alerts
  • Washington Mutual
  • Table 5-22: Washington Mutual Product Features Summary
  • Online Banking Fees
  • Unique Offerings
    • ID Theft Products

  • Wells Fargo
  • Table 5-23: Wells Fargo Product Features Summary
  • Unique Features
  • Online Banking Fees
  • Quicken and Microsoft Money
  • Account Aggregation

Chapter 6: Consumer Demographics

  • Consumer Demographics - Stats at a Glance
  • Consumer Profile Shift as Online Banking Reaches the Mainstream?
  • The American Banker/Gallup Consumer Survey Demographics Say It’s Not So
  • Satisfaction with Online Banking Falls
  • Consumer Perceptions and the Use of E-Banking
  • Table 6-1: Percentage of U.S. Households That Use Various Electronic Banking Technologies, By Perception Index Level, 1999 and 2003
  • Table 6-2: Distribution of households: Perception Index and Level
  • Availability and Future Use of E-Banking
  • Table 6-3: User and Non-User Expectations About Future Use of Selected Electronic Banking Technologies, 1999 to 2003, in percent
  • Table 6-4: Demographics for Users and Non-Users of Electronic Banking Technologies
  • Consumer Online Banking Usage and Frequency of Use
  • Note on Simmons Market Research Bureau Data
    • Data Presented for Online Banking

  • Almost a Quarter of Adults Use Home Computer for Internet Banking
  • Table 6-5: U.S. Adults Using Online Banking Spring 2004
  • Table 6-6: Demographic Characteristics Favoring Online Banking Usage*
  • Age
  • Online Banking: A Younger Person’s Game?
  • Table 6-7: Online Bankers by Age Composition
  • Table 6-8: Percentage of Consumers Who Have Used Online Banking Within Last 30 days: By Age
  • Gender
  • Figure 6-1:Online Banking Composition by Gender
  • Figure 6-2: Percentage of Consumers Who Have Used Online Banking, by Gender
  • Ethnicity
  • Table 6-9: Number of Individuals by Ethnicity
  • Table 6-10: Percentage of Consumers Who Have Used Online Banking, by Ethnicity
  • Education
  • Table 6-11: Percentage of Consumers Who Have Used Online Banking, by Education
  • Income
  • Figure 6-3: Consumers Using Online Banking by Income*
  • Table 6-12: Percentage of Consumers Who Have Used Online Banking, by Income
  • Marital Status
  • Figure 6-4: Percentage of Online Banking Users, by Marital Status
  • Region
  • Figure 6-6: Consumers Using Online Banking, by Region
  • Generation X and Y
  • Table 6-13: Young Adults' Online Financial Activities, By Gender
  • Table 6-14: Financial Products Researched Online By Young Adults, By Gender
<<

Chapter 7: Security and Fraud

  • Security and Fraud Concerns
  • Security and Fraud Concerns Primary Growth Inhibitor
  • Table 7-1: Why U.S. Households Do Not Use Online Banking Services, 2002
  • Encryption Protocols
  • Aggregation a Fear
  • The Electronic Fund Transfer Act & Regulation E
  • The Truth-in-Lending Act & Internet Credit Card Purchases
  • Identity Theft Insurance
    • Example: PNC
    • Example: Citibank

  • Putting an End to Account-Hijacking Identity Theft
  • Ways of Perpetrating Account Hijacking
  • Phishing
  • Hacking
  • Retrieving Hard-Copy Documents or Looking Over Someone’s Shoulder
  • Using Insiders
  • Inserting Malicious Software

  • Account Hijacking
  • Table 7-2: Misuse of Victim Information
  • The Financial Impact of Identity Theft
  • Industry Perceptions
  • Table 7-3: Leading Threats Against Deposit Accounts, by Bank Size Group
  • Legislative and Regulatory Responses to Identity Theft
  • Standards for Protecting Information
    • Gramm-Leach-Bliley Act
    • Fair and Accurate Credit Transactions Act of 2003 (FACTA)
    • USA Patriot Act
    • Information to Consumers

  • Increased Penalties and Tools for Law Enforcement
    • ID Theft Act
    • Identity Theft Penalty Enhancement Act
    • Internet False Identification Prevention Act of 2000

  • Technology to Mitigate Account-Hijacking Identity Theft
  • Scanning Tools
    • Scanning Software
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-4: Ratings for Scanning Software
  • Server Log Analysis Software
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-5: Ratings for Log Analysis
  • E-Mail Authentication (Sender ID)
    • What Is It and How Does It Work?
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-6: Ratings for Sender ID
  • User Authentication
  • Shared Secrets
    • What Is It and How Does It Work?
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-7: Ratings for Shared Secrets
  • Tokens
  • USB Token Device
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-8: Ratings for USB Token Devices
  • Smart Card
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-9: Ratings for Smart Cards
  • Password-Generating Token
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-10: Ratings for Password Generating Tokens
  • Biometrics
  • Biometrics Example #1: Fingerprint Recognition
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-11: Ratings for Fingerprint Recognition
  • Biometrics Example #2: Face Recognition
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-12: Ratings for Face Recognition
  • Biometrics Example #3: Voice Recognition
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-13: Ratings for Voice Recognition
  • Biometrics Example #4: Keystroke Recognition
    • Effectiveness/Protection
    • Ease of Use and Requirements

  • Table 7-14: Ratings for Keystroke Recognition
  • Summary and Findings
  • Findings
  • Europe Embracing Smart Card Security Features
  • Smart Cards Circumvent Key Logging
    • Example: USB AG Bank

    Chapter 8: The Market for Online Banking and Bill Payment

    • The Market
    • Market Size and Reach: Stats at a Glance
    • Market Limitations
    • Computer Use Not Saturated
    • Internet Use Not Saturated
    • Lingering Security, Fraud, and Privacy Concerns
    • Online Banking by the Numbers
    • Table 8-1: Top 15 U.S. Bank Holding Companies by Total Assets
    • Table 8-2: Top 12 U.S. Bank Holding Companies by
    • Online Banking Customers
    • Number of Households Banking Online
    • Number of Individuals Banking Online
    • Almost a Quarter of Adults Use Home Computer for
    • Internet Banking
    • Table 8-3: U.S. Adults Using Online Banking as of October 2003
    • Penetration Rates Indicate Room for Growth
    • Table 8-4: Bank of America Online Banking DDA* Household Penetration
    • Table 8-5: Digital Insight Internet Banking Metrics, Historical Trend
    • Table 8-6: Online Resources Adoption Rates
    • Table 8-7: Top 12 U.S. Bank Holding Companies by Bill Pay Customers (as of Q3 2004)
    • Table 8-9: Top 12 U.S. Bank Holding Companies by Total Deposits (as of Q2 2004)Market Growth
    • Online Banking Growth
      • Stats at a Glance

    • Table 8-10: Number of U.S. Online Banking Users
    • Bill Payment Growth Outpaces Online Banking Growth Stats at a Glance
    • Table 8-11: Number of U.S. Online Banking Users Who Use Bill Pay
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