• July 31, 2003

A recent web survey reports that attitudes toward Internet banking have significantly improved in 2003 versus 2001 and 2000. Seven in ten consumers completely or strongly agreed with the statement, "Internet based transactions handled by financial institutions are safe and secure," versus about half in 2001 and 2000. As safety and security is becoming less of a concern among consumers, financial institutions may feel more comfortable increasing innovation and sophistication in terms of the technologies they use to serve customers. Consumers are starting to view Internet based transactions handled by financial institutions as equally safe as those that take place over the phone. While 32% of consumers' reported that Internet based transactions were more secure than telephone based banking transactions in 2000; this percentage rose to 41% in 2001, and continued to rise to 47% in 2003. Accordingly, the ease and accuracy of conducting Internet based transactions with financial institutions earns high marks. Three-quarters of consumers' report that they believe Internet based transactions to be accurate and easy to conduct in 2003. Commercial banks are also strengthening their standing as the most innovative type of financial institutions in terms of the technologies they employ to serve customers. Fifty percent of consumers rank commercial banks as the most innovative, while Credit Unions now rank a far second (19%) and brokerage firms a distant third (14%). In order to narrow this gap, other types of financial institutions should take heed to the rise in comfort among consumers to the inter-net and make efforts to improve their Internet customer service capabilities .