{"id":97264,"date":"2002-11-17T00:00:00","date_gmt":"2002-11-17T05:00:00","guid":{"rendered":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/2002\/11\/17\/online-banking-2002\/"},"modified":"2024-04-14T04:18:08","modified_gmt":"2024-04-14T09:18:08","slug":"online-banking-2002","status":"publish","type":"post","link":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/internet\/2002\/11\/17\/online-banking-2002\/","title":{"rendered":"Online Banking 2002"},"content":{"rendered":"

164% increase in online banking since early 2000<\/h3>\n\n

The convenience of conducting business on the Internet has been a consistent theme in Pew Internet Project studies.\u00a0 Internet users pursuing health information, political news, and holiday gifts all cite convenience as a factor in their choice to go online to find what they are looking for.\u00a0 Internet users also say email helps them stay in touch with friends and family without having to spend so much time talking to them.\u00a0 And Internet users who have a high-speed connection at home take advantage of \u201calways on\u201d access to get more online tasks accomplished in a typical day than the average dial-up user.<\/p>\n\n

In March 2000, when we first asked about certain \u201cconvenience\u201d activities like banking or making travel reservations online, not many Internet users had sampled them.\u00a0 Seventeen percent of Internet users (about 14 million Americans) had ever done any banking online.\u00a0 Thirty-six percent of Internet users (about 31 million Americans) had ever made a travel purchase online.\u00a0 We now find that 32% of Internet users (about 37 million Americans) have now done their banking online and 50% of Internet users (about 59 million Americans) have made a travel purchase online.\u00a0 Of all seventy activities we track, none have seen as much growth as online banking and online travel purchases.<\/p>\n\n

When it comes to a \u201ctypical day\u201d online, online banking has evolved into a fairly common task, nearly equal to instant messaging in its popularity.\u00a0 On a typical day in March 2000, 5% of Internet users conducted bank business online.\u00a0 On a typical day in September 2002, 10% of Internet users conducted bank business online (11% of Internet users IM on a typical day).\u00a0 By contrast, Internet users are no more likely to make travel purchases now than they did in March 2000 \u2013 about 1% of Internet users do this on a typical day.<\/p>\n\n

\"Online<\/figure>\n\n

It is likely that convenience is not the only factor driving the popularity of online banking and travel purchases.\u00a0 Some users are using the Internet to save money \u2013 30% of e-bankers say this was a \u201cvery important\u201d reason why they decided to bank online.\u00a0 One online bank, NetBank, now charges $3 for each paper statement and many companies are strongly encouraging their customers to accept an electronic bill.[1. Bayot, Jennifer. \u201cWant Bills by Snail Mail? It Might Cost You Money,\u201d New York Times, October 29, 2002.] Some airlines reward online consumers with special discounts \u2013 and reap the benefits of increased traffic to their Web sites.[2. \u201cConsumers Spent $1.5 Billion Online Last Week, Reports comScore Networks.\u201d Press release available at: http:\/\/www.comscore.com\/news\/holiday_ecommerce_112202.htm<\/a>] In both cases, the industry is educating consumers about Internet transactions by making them pay for off-line equivalents.<\/p>\n\n

The rise in the popularity of online banking builds on the Federal Reserve\u2019s recent report about a drop in the number of paper checks written by consumers.\u00a0 In 1995, the Fed processed 49.5 billion checks.\u00a0 In 2000, the Fed processed 42.5 billion checks \u2013 a 14% drop.[3. Chatzky, Jean. \u201cThe Check Is in the Mail. Not!\u201d Time, October 14, 2002.] Our numbers also match those of Internet users who enjoy the convenience of donating money to charities online.\u00a0 About one-third of online donors also do their banking and bill-paying online according to surveys conducted by Craver, Mathews, Smith & Company.[4. Personal communication from Mark J. Rovner, Senior Vice President of Craver, Mathews, Smith & Company.]<\/p>\n\n

Convenience is king<\/strong><\/p>\n\n

Convenience is the number one attraction for all online bankers, but younger Internet users are the most passionate about saving time.\u00a0 Eight out of ten (79%) e-bankers say that convenience was \u201cvery important\u201d to their decision to first bank online \u2013 82% of 30-49 year-old e-bankers agree, compared to 73% of 50-64 year-old e-bankers.\u00a0 Seven out of ten (71%) e-bankers say that the idea of saving time was \u201cvery important\u201d to making that leap \u2013 79% of 30-49 year-old e-bankers agree, compared to 66% of 50-64 year-old e-bankers.<\/p>\n\n

\"Why<\/figure>\n\n

The other reasons to switch to online banking elicited strong feelings from e-bankers, but they were consistent across the board.\u00a0 No one group felt more strongly than another about the advantages of better control over finances, not having to talk to anybody, getting more information, saving money, or using a wider menu of bank services online.<\/p>\n\n

Online banking attracts younger, more educated group of Internet users<\/strong><\/p>\n\n

Men are somewhat more likely than women to bank online \u2013 35% of male Internet users have done so, compared to 30% of female Internet users.\u00a0 Younger Internet users are more likely to be e-bankers \u2013 33% of Internet users between 18 and 29 years old, 36% of Internet users between 30 and 49 years old, 27% of Internet users between 50 and 64 years old, and just 16% of Internet users age 65 and older have done it.\u00a0 Education and affluence are also associated with online banking.\u00a0 Forty-one percent of college graduate Internet users are e-bankers compared to 23% of Internet users with a high school degree.\u00a0 Forty-four percent of Internet users living in the highest-income households ($75,000 or more per year) have banked online, compared to 21% of Internet users living in the lowest-income households (less than $30,000 per year).<\/p>\n\n

The longer someone has been online, the more likely they are to port their banking business to the Internet.\u00a0 Thirty-nine percent of those who have been online for four or more years have banked online, compared to 20% of those with two to three years of experience and 6% of those with one year of experience online.\u00a0 Internet users with a high-speed connection at home are also much more likely to bank online \u2013 49%, compared to 30% of dial-up users.<\/p>\n\n

E-banking stands apart from other online financial activities<\/strong><\/p>\n\n

While these demographics do not seem surprising at first glance, it is important to note that e-bankers do not fit neatly into our portrait of Internet financial services consumers.\u00a0 For example, while older Internet users (65 years or older) are the most likely to get financial information, like stock quotes, online, they are the least likely to bank online.\u00a0 More than half (52%) of wired seniors have gotten financial information online, compared to 28% of 18-29 year-old Internet users, but only 16% of wired seniors have banked online, compared to 33% of 18-29 year-old Internet users).\u00a0 And while men outpace women in gathering financial information (51% vs. 33%), women are nearly even with men when it comes to taking care of bank business online (35% vs. 30%).\u00a0 Also, while we have seen tremendous growth in the percentage of Internet users banking online, the percentage of Internet users seeking financial information online has held steady at about 42% since March 2000.\u00a0 And the same can be said for the e-trading crowd \u2013 while the Internet population has grown, the percentage of users who buy or sell stocks online has held steady at about 12% since March 2000.<\/p>\n\n

E-banking also attracts a more diverse group of Internet users than other financial activities.\u00a0 When our summer and fall surveys are combined, to increase the number of respondents, we can say with relative certainty that online banking is equally popular with African American Internet users (30%) as it is with white Internet users (32%).\u00a0 And Hispanic Internet users are just as enthusiastic \u2013 33% of them have done their banking online.\u00a0 It is interesting to note that minority Internet users, while taking part in online banking, are not as likely as white Internet users to get financial information online.\u00a0 While 44% of white Internet users have done this, 36% of African American Internet users and 34% of Hispanic Internet users have gotten financial information online.<\/p>\n\n

Methodology<\/strong><\/p>\n\n

This report is based on the findings of a daily tracking survey on Americans’ use of the Internet. The results in this report are based on data from telephone interviews conducted by Princeton Survey Research Associates between September 9 and October 6, 2002, among a sample of 2,092 adults, 18 and older.\u00a0 For results based on the total sample, one can say with 95% confidence that the error attributable to sampling and other random effects is plus or minus 2 <\/b>percentage points.\u00a0 For results based Internet users (n=1,318), the margin of sampling error is plus or minus 3 percentage points.\u00a0 In addition to sampling error, question wording and practical difficulties in conducting telephone surveys may introduce some error or bias into the findings of opinion polls.<\/p>","protected":false},"excerpt":{"rendered":"

Pew Internet Project surveys tracked a 164% increase in online banking and a 90% increase in travel purchases between 2000 and 2002. 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