Online banking proving popular

Internet banking services are well and truly taking off in the US, but it is the bricks and mortar banks that are reaping the benefits to the detriment of pure online banks.

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By  Zoe Moleshead Published  September 2, 2001

Internet banking services are well and truly taking off in the US, but it is the bricks and mortar banks that are reaping the benefits to the detriment of pure online banks.

According to research group, Jupiter Media Matrix, multi-channel banks (those with online services and offline branches) witnessed staggering growth of over 110% for visitor traffic for the year spanning July 2000 to July 2001. However, pure online banks saw their visitor traffic fall by 8.1% from 1.2 million visitors to 1.1 million for the same period.

The research firm also discovered that traffic to all banks grew by a whooping 77.6% over the same period. However, Jupiter analysts are predicting an uphill battle for online-only banks, citing the established reputations of multi-channel banks, and consumer comfort with traditional banking aspects.

"Online banking has moved from being a competitive edge to a commodity," said James Van Dyke, research director, Jupiter Media Metrix. "General-purpose online-only banks, competing without branches and universally accessible customer service, are losing their lead to aggressive traditional depository institutions. They will soon turn to physical distribution or audience specialisation to survive."

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