9th Annual Online Banking and Bill Pay Forecast: Megabanks Dominate Moneyhawks™ While Paperless Adoption and Online Bill Pay Stall
Javelin Strategy & Research, September 2011, Pages: 63
Online banking has clearly established itself as a vitally important self-service channel. Yet Javelin’s five-year forecasts suggest online banking has effectively hit its saturation level. Momentum for paying bills online also has flagged, contributing to Javelin’s forecasts for sluggish growth for the viewing and payment of bills through financial institutions and at biller websites. And although the financial services industry is making headway persuading consumers to turn off paper statements, it is clear that many Americans harbor practical concerns and doubts about the promise of paperless banking and billing. In addition, the nation’s four largest banks set the benchmark on the key fronts of online banking, bill pay, paper turnoff, and mobile banking. This is ratcheting up pressure on smaller rivals — particularly community banks — to invest in technology upgrades to satisfy the American consumer’s steadily increasing expectation for self-service channels and services that provide control, convenience, and safety.
Primary Questions
- Have adoption and active usage of online banking and bill payment crested?
- What factors will fuel or hinder adoption of online banking and bill payment?
- What transactions do consumers prefer to conduct online?
- What would best motivate different segments of consumers to bank online?
- Why do consumers prefer to pay bills through a financial institution vs. at a biller website vs. by mail?
- What specific marketing messages and services can FIs and billers employ to reinvigorate online bill pay?
- Which consumers are turning off paper statements — and what would spur more Americans to do so?
- What are the chief obstacles keeping Americans from turning off paper statements?
- Why are giant banks winning the race to cater to “Moneyhawk™” behavior with online banking, bill pay, and mobile banking?
- What are the implications for regional banks, community banks, and credit unions — and why are community banks at the greatest risk?
Audience:
Financial institutions: E-commerce, mobile banking, credit card, debit card, and marketing strategists.
Vendors: Online-banking and mobile-banking platform providers and vendors, mobile network operators, and online banking and mobile banking marketers.
Others: Personal finance websites and web-based service providers.
Overview
Primary Questions
Methodology
Executive Summary
Key Recommendations
Javelin’s Five-Year Forecasts: Online Banking and Bill Pay
Summary of Javelin’s Five-Year Forecasts
Key Factors Influencing Javelin’s Forecasts
The Online Banking Conundrum: Adoption Slows, but Usage is More Active
Bill Pay Momentum Weakens, Needs a Boost From Targeted Marketing
Consumers Remain Skeptical About Paperless Banking
Pressure Mounts on Community Banks to Upgrade
Appendix
Related Research
Companies Mentioned
Table of Figures
Figure 1: Methodology: Behavioral Definition Used to Segment Consumers
Figure 2: Forecast: Households Banking Online and Viewing and Paying Bills Online (2006–2016)
Figure 3: Compound Annual Growth Rates for Households Using Online Banking and Bill Pay (2006–2016)
Figure 4: Forecast: Households Banking Online in Past 12 Months (2006–2016)
Figure 5: Adults Banking Online in Past 12 Months (2006–2016)
Figure 6: Forecast: Households Paying Bills Through FI Websites (2006–2016)
Figure 7: Households That Pay Bills at Biller Sites Monthly (2006–2016)
Figure 8: Online Banking Usage in Past Month (2005–2011)
Figure 9: Percent of Consumers Who Prefer Online Banking for Various Activities
Figure 10: Preferred Method for Checking Account Balances (by Segment)
Figure 11: Banking Interactions Conducted in Past 30 Days (2005–2011)
Figure 12: Consumers Who Never Bank Online (2005–2011)
Figure 13: Paying and Viewing of Bills at FI Sites in Past Month (2009–2011)
Figure 14: Consumers Who Never View or Pay Bills Through FIs or at Biller Sites (2009–2011)
Figure 15: Method of Paying Common Bills (Online vs. Mail)
Figure 16: Method of Paying Eight Common Bills (FI Bill Pay vs. Biller Direct)
Figure 17: Top Advantages of Paying Bills Through FI Bill Pay
Figure 18: Top Advantages of Paying Bills Through Biller Websites
Figure 19: Top Advantages of Paying Bills via Mail
Figure 20: Motivations for Consumers to Pay More Bills Online
Figure 21: Top 10 Reasons Consumers Do Not Use FI Bill Pay
Figure 22: Type of Statement Received for Checking Account (2008–2011)
Figure 23: Type of Statement Received for Checking Account (by Segment)
Figure 24: Primary Reasons Consumers Receive Both Paper and Electronic Statements (by Segment)
Figure 25: Primary Reasons Consumers Turned Off Paper Statement (by Segment)
Figure 26: Top Criteria When Selecting a New FI (Giant Banks vs. Community Banks
Figure 27: Logged In to Online Banking in Past Month (by Size of FI)
Figure 28: Customers Who Prefer to Use Online Banking to Conduct Common Transactions (by Size of FI)
Figure 29: Viewed or Paid Bills in Past Month at FI or Biller Site (by Size of FI)
Figure 30: Paid Common Bills via FI Bill Pay (Giant Banks vs. Community Banks)
Figure 31:Type of Checking Account Statement Received (by Size of FI)
Figure 32: Bank Benchmark Service: How the Top 10 Banks Compare in Online-Only Checking Statements
Figure 33: Customers Who Receive Only Electronic Billing Statements (by Size of FI)
Figure 34: Households Banking Online and Viewing and Paying Bills Online (2005–2015)
Figure 35: Households That Use Bank Bill View Monthly (2006–2016)
Figure 36: Households That Viewed Bills at Biller Sites in Past Month (2006–2016)
Figure 37: Top Five Reasons Cautiously Content™ Consumers Do Not Bank Online
Figure 38: Satisfaction With Current Banking Relationship (by Size of FI)
Figure 39: Market Share of the Nation’s Four Giant Banks (by Segment)
Figure 40: Customers Who Prefer to Visit Branches to Conduct Common Transactions (by Size of FI)
- AT&T
- JPMorgan Chase
- Bank of America
- Manilla
- Billeo
- Miny
- ChargeSmart
- Pacific Gas & Electric
- Citigroup
- USAA
- Comcast
- Verizon
- Farmers Insurance Group
- Volly
- HSBC
- Wells Fargo
- Jack Henry & Associates
- Zumbox
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