• by Jack Loechner , Staff Writer @mp_research, April 20, 2006

comScore Networks in it's recent analysis of the state of online banking in the U.S., found that the number of online banking customers grew to nearly 40 million during Q4 2005, a 27-percent increase over the previous year.

Serge Matta, director of comScore Financial Services Solutions, said "Consumers continue to migrate to online banking, with the nation's largest banks attracting more than 8.5 million new online banking customers in 2005," ...(But) in Q4 2005, the total number of online banking customers grew by 3.1 percent over the previous quarter, representing the lowest sequential quarterly growth in three years."

Bank bill payment (payment through a retail bank at which a bank account is held) continues to grow at a rapid pace and currently accounts for nearly one-quarter of all online bill payments. A single bank led the industry in bank bill payment with 5.1 million active bill pay customers, attracting more than half of total bank bill pay customers in Q4 2005.

While ease of use and convenience were previously the major drivers, incentives and deflating security concerns are the primary motivations nudging customers to adopt online banking today. When asked about reasons for enrollment:

• 33 percent of new online banking consumers referenced the free banking products that were offered as an inducement
• 23 percent responded that they felt more secure about online banking than they did previously
• A free checking campaign from one bank attracted the most new enrollees (43 percent)

High-yield savings accounts are attracting many satisfied customers, but the study found that satisfaction is driven in large part by the high rate itself. New entrants to the high-yield savings market increased competition, spurring promotional offerings and adoption growth. In Q4 2005, 446,000 high-yield applications were submitted, up from 390,000 in Q1 2005. These new entrants drastically changed the savings marketplace landscape.

A strong connection between satisfaction with the banking relationship and satisfaction with the Web site exists. 88 percent of customers who are satisfied with their bank's Web site state they are very satisfied/ satisfied with the bank relationship, while only 16 percent of customers who are dissatisfied with the Web site rate their overall satisfaction with the bank as high.

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