Online Banking: Moving Toward a New Paradigm

Report Summary

Online Banking: Moving Toward a New Paradigm

Aite Group forecasts that by 2010, 13% of checking accounts will be opened online in the United States, up from 3% in 2006. Aite Group recommends the leading online banking channel vendors should progress beyond software applications and offer value-added

Gwenn Bézard
Co-Founder and Research Director

Boston, MA, September 6, 2006 – In a new report, Online Banking: Moving Toward a New Paradigm, Aite Group surveys 21 of the top 50 U.S. banks (measured by number of checking accounts) to assess the business and technology strategies used by the major banks. The 49-page report contains 47 charts and tables that provide a comprehensive overview of each of the banks goals and performance with the channel, and the directions in which their underlying technology infrastructure and vendor management is headed. Furthermore, the report details the banks' interest in eight value-added products and services including expedited bill payment, account-to-account transfers, fraud management services, online personal finance management tools (PFM-Lite), card-based bill payments, online bill presentment, account aggregation, and online marketing campaign outsourcing.

Among its key findings, the report notes that while banks are making online customer acquisitions a priority, there are significant differences in the number of new, online accounts banks are opening. The top performer, among the banks surveyed, is sourcing about 20% of its new checking accounts online, the next highest performer is sourcing 13%, and the lowest performer is sourcing 0.03%.

"As competition for online customers grows among banks, there are a number of elements in which financial institutions, including some of the most sophisticated players, will need to further invest," said Gwenn Bézard, a Research Director with Aite Group and the author of the report. "Beyond mastering the account opening process, banks will need to become considerably more effective with online marketing. By leveraging online customer data, conducting targeted online and multi-channel marketing campaigns, banks will be well positioned to leap frog the competition."

The vendors mentioned in the report include: Andera, BankDetect, Cashedge, CheckFree, Corillian/Intelidata, Digital Insight, eFunds, Equifax, Experian, Financial Fusion, Intuit, Lexis-Nexis, MasterCard RPPS, Metavante, Microsoft, MoneyGram, Online Resources/Princeton eCom, Verid, Visa ePay, Western Union, Xoom, and Yodlee.

This 49-page Impact Report contains 39 figures and 3 tables. Clients of Aite Group's Retail Banking Service can download the report

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