New Growth Areas Found in Otherwise Flat Online Banking and Bill Pay Market

Aug 22, 2012

New Growth Areas Found in Otherwise Flat Online Banking and Bill Pay Market

Javelin’s 10th Annual Online Banking and Bill Pay Forecast Reveals Key Strategies and Consumer Segments for Banks

San Francisco, CA, August 22, 2012 – A new report from Javelin Strategy & Research reveals how financial institutions (FIs) can reinvigorate online banking and bill pay, boosting online banking and FI-bill pay usage. Adoption of online banking, bill pay and bill view at FIs has maxed out, with minimal growth projected over the next five years. However, FIs can revitalize their online banking and bill pay offerings by shifting from a traditional transactional role to a more consultative one, making online banking the cornerstone of interactive financial management, and pursuing new consumer segments.

Millions of Americans are evaluating banking relationships based on the expectation that FIs should help them be smarter with their money and that paying bills online should be a snap. Half of consumers who switched or considered switching in the past 12 months, felt online banking helps to manage their personal finances effectively. For consumers looking forward in the coming year of possibly switching banks, this number climbs to 72%. Online banking and bill pay needs to deliver on its promise to make them effective finance managers, in order to have higher market growth.

Potential Switchers Expect Online Banking to Help Manage Personal Finances More Effectively

“Big gains will come from targeting broader consumer segments,” said Mark Schwanhausser, Director of Multichannel Financial Services at Javelin. “We found that 34-million consumers actively bank online, but do not pay bills through their primary FIs. Certain targets within these groups are more likely than others to adopt. FIs that can identify and convert these segments to online banking or bill pay will see significant increases in growth.”

While FIs and biller direct sites are currently battling for market share in a flat online bill pay market, new players are emerging. Bill pay innovators, such as Quicken, MyCheckFree, and others, threaten to steal customers away from both FIs and billers and could potentially - and significantly - disrupt the market.

"Consumers are telling FIs that online banking and bill pay isn’t good enough, and FIs aren’t listening,” said Jim Van Dyke, President, Javelin. "FIs need to get to the heart of what consumers really want and take online banking and bill pay to the next level. The way to do this is to make online banking the foundation of personal banking and shift the focus away from simply completing transactions. Our forecast presents industry trends, consumer insights, and the competitive advantages offered by innovators that FIs need, if they want to survive - and thrive.”

Javelin's Online Banking and Bill Pay Forecast report is based on two online surveys of 5,000 and 3,400 consumers. This report includes 43 pages with 25 charts. It examines the online banking and bill pay offerings of Bank of America, Chase, Citi, and Wells Fargo. A companion Bill Pay report, to be released next month, will provide specific recommendations on new technology investments and targeted marketing messages that FIs need to succeed.

To learn more, click here: 2012 Online Banking and Bill Payment Forecast: How to Boost Profitability When Facing Flat‐Lining Adoption

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About Javelin Strategy & Research
Javelin Strategy & Research provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. Javelin’s independent insights result from a uniquely rigorous three-dimensional research process that assesses customers, providers, and the transactions ecosystem.

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