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Just an Online Minute... Online Banking

Here’s a nice surprise: while some areas of e-commerce are stagnant or slumping, online banking is actually experiencing strong growth. That’s according to eMarketer's just-released report, Interactive Banking: Integrating Online into Traditional Channels.

According to the report, in the U.S. alone, the online banking population grew 37.6% in 2001. This year it is projected to continue growing at a robust 23.3% rate.

"The rate of growth will diminish over the next few years, but it will remain steady and positive," says David Hallerman, Senior Analyst at eMarketer. "By the end of 2005, 31.5 million American households will be banking on the internet."

One in every five households is currently banking online, and eMarketer expects that figure to increase to 26.1% by 2004. To put that in perspective, 70.3% of all U.S. households will be online by 2004, which means 37.1%, over one third, of all online households will be banking online.

"A few years ago banks hoped that the Internet would reduce traffic in higher-cost channels such as the branch and the call center, but that isn't happening," Hallerman says. "Customers want the same banking services no matter the channel: Internet, branch, ATM or call center. Banks are finding, however, that combining the Internet and in-person channels is often the best way to deal with complex financial tasks such as mortgages and financial planning."

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