Global Trends in Online Banking
Anita Hawser
European Editor
Global Financewww.gfmag.com
Bricks versus clicks
The UK’s first online “pure play”
• It took Egg 10 weeks to attract
£1 billion in deposits
• Within the first six months it had £5 billion in deposits, well ahead of target.
Online savers better off
• “An online saver could be 37% better off over a year, compared with someone opting for the best deal in a branch”
• Source: Which, UK consumer watchdog
Online banking reality check
• Online access failures
(Users could not log on to Egg.com for more than a day but there was no customer notification)
• Online banking fraud
Online fraud declining
January to June 2010
Online bank account fraud fell 36% from 2009’s half-year
figure
Source: UK Cards Association
Reasons for decline in online fraud
• Increased customer awareness of phishing scams
• Increased use of anti-virus software
• More sophisticated fraud detection by banks
• Additional authentication - MasterCard SecureCode and Verified by Visa
Increasing customer confidence in online
• 44% of US survey respondents felt more secure on their bank’s web site(comScore 2010 State of Online Banking)
• “It is imperative that banks find ways to tap into the market segment that does not bank online for security reasons.”
Online banking growth
• In the UK, 21.5 million customers bank online (35% of the UK’s total population
Growth in online banking is at an evolutionary rather than revolutionary pace?
Online bill pay
• “A new milestone has been reached in the online banking world with the widespread adoption of online bill pay, now utilised by 64% of the online banking community, up 19 points from the previous year.”
(comScore 2010 State of Online Banking)
Mint.com tracks $175 billion in transactions, $47 billion in assets and has identified more
than $300 million in potential savings for users
Online banks and social media• Who is using social media to engage in two-way
communications with their online bank?
• 11% of financial institutions on the UK FTSE 500 use Twitter to engage with customers
• More than 90% of telecoms companies use social media for two-way communications, compared to just 4% of banks
• (Source: Kencall 2010)
The future is mobile and multi-channel
Banking the “unbanked”
In developing markets like Africa there are more people with mobile phones than bank accounts
Mobile money transfer service M-PESA has more
than 7 million customers (no bank accounts involved)