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Viewing report
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2010 Online Banking and Bill Payment Forecast: How to Cut $8.3 Billion in Costs Through Channel Conversion
Javelin Strategy & Research, Oct 2010, Pages: 56
As regulatory reforms erase banking revenues, online banking and bill pay have taken on heightened importance for their ability to provide around-the-clock, customer-pleasing services that can dramatically cut operational costs for financial institutions (FIs). Javelin estimates that the banking industry can gain nearly $8.3 billion in operational cost savings by wooing customers to act more often through online banking channels. About $6.9 billion in expense cuts can be achieved by converting non-online customers to online banking and bill pay, enabling FIs to reduce costlier transactions through branches and call centers, decrease the number of paper statements, and reduce check- and cash-processing costs. FIs can cut the remaining $1.4 billion expense if current online-banking customers satisfy half of their customer-service questions online rather than at branches and call centers.
But here’s the challenge: Important measures of adoption and usage that underpin Javelin’s 2015 forecasts indicate that online banking and bill pay are at a crossroads — and FIs and billers must either upgrade or stagnate in order to entice more customers to bank and pay bills online. The issue is most acute for smaller regional and community banks, which lag far behind giant banks, larger regional banks and credit unions.
Primary Questions
- How much can banks and credit unions cut operational costs and boost fee revenues by upgrading their online banking and bill pay capabilities?
- Have adoption and usage of online banking and bill pay peaked?
- How can banks, credit unions and vendors reinvigorate online banking and bill pay and help FIs win the battle to become the customer’s primary financial institution?
- Does the use of online banking increase the frequency with which customers check balances or other transactions — and what is the impact on transaction costs?
- Is momentum continuing to build for viewing and paying bills at bank sites rather than directly at biller sites?
- What would motivate consumers to view and pay more bills online?
- How many consumers pay bills through more than one bank or credit union?
- How do giant banks, large regional banks, smaller regional and community banks and credit unions compare on key measures of online banking and bill pay?
Audience:
- Financial institutions: E-commerce, online banking and marketing strategists, payments processors and billers
- Vendors: Online-banking platform providers, online-banking vendors, online-banking marketing
- Others: Personal finance websites
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