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Sunday,
July 23, 2000
23 Million Americans to Bank
Online by 2004
Interest in online banking has been steadily increasing
in the United States, which will result in a dramatic rise
in user participation over the next two years. According
to IDC, the number of U.S. households banking online will
skyrocket to 22.8 million in 2004.
As this large banking consumer
base moves online, it will bring with it significant implications
for banks, ranging from technology support and customer
service, to online banking functionality. Banks of all
sizes that have resisted creating online services will
find themselves competitively disadvantaged over the next
24 months. Banks will have the opportunity to position
themselves as either "aggressive" or "defensive" with
their online banking strategies, and necessary investment
will reflect that positioning. As more "traditional" banks
come online, the "virtual" banks will need to
adjust their business models to remain relevant.
"Banks of all sizes are
acknowledging that consumer demand for online banking is
reaching a critical point. The majority of new users will
be accessing banks through the Internet, and this has significant
implications for those banks that already offer online
services, in terms of supporting direct-dial and personal
financial software users and executing acceptable customer
service," said Shaw Lively, research manager for IDC's
Online Financial Services program. "As the number
of U.S. online banking households grows, banks will need
to stop thinking about the Internet as an alternative channel
and instead think of it as a mainstream channel every bit
as important as branches, call centers, and ATMs."
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