I first discovered the joys of online banking in the late 1990s.
I was living in Canada, but working for the Monitor in Boston. All
my paychecks were being deposited in my Cambridge, Mass., bank
account. By using Internet banking, I could pay my bills in the
United States and transfer money to my Canadian accounts. I was sure
that in a few years, everyone would bank online.
We aren't there yet. Still, about 42 percent of Americans now
bank online, often via a website offered by their regular "brick and
mortar" bank, according to a survey by the Pew Internet and American
Life Project. Of all the Internet activities Pew has studied since
its inaugural survey in March of 2000, Internet banking has grown
But Americans' interest in online banking may be waning, The
number of people banking online is expected to grow by just 4
percent between 2006 and 2010, according to Lisa Phillips, senior
researcher at eMarketer, a market research firm in New York.
Why would consumers move away from banking online?
Basically, concerns about security. People still do many things
online that don't make a lot of sense - open e-mails with suspicious
attachments, give away information to shifty e-mail marketers,
forget to log off their machines when they leave a public Internet
terminal. But when it comes to their money, most folks display a
heightened awareness that seems missing at other times.
In a 2005 survey of 1,000 American adults conducted by the global
market research firm Ipsos Insight, 72 percent said they were
worried about banks selling their information to a third party,
while 73 percent said they had concerns about identity theft. People
wanted banks to provide greater assurances about protections in
these areas and make it easier to actually contact a "real person"
when they needed help.
It's easy to see why people have security concerns. Most probably
receive several "phishing" e-mails a day from crooks trying to get
them to hand over their banking, credit-card, or other personal
information. Recent events, such as the theft of personal data from
about 26.5 million vets from the Department of Veterans Affairs, may
not affect everyone directly, but it makes us nervous. Even
commercials about identity theft, aimed at reassuring people that
they are protected, probably move some people toward not doing any
online banking at all.
Some analysts forecast that one type of online banking will grow
more rapidly in the years ahead. "Virtual banks," with no brick-and-
mortar components, account for only about 2 percent of all deposits
made in the US, according to The Online Banking Report, an
independent newsletter that has reported on the subject since 1995. …