Global Trends in Online Banking

Anita Hawser

European Editor

Global Financewww.gfmag.com

Bricks versus clicks

The UK’s first online “pure play”

• It took Egg 10 weeks to attract

£1 billion in deposits

• Within the first six months it had £5 billion in deposits, well ahead of target.

Online savers better off

• “An online saver could be 37% better off over a year, compared with someone opting for the best deal in a branch”

• Source: Which, UK consumer watchdog

Online banking reality check

• Online access failures

(Users could not log on to Egg.com for more than a day but there was no customer notification)

• Online banking fraud

Online fraud declining

January to June 2010

Online bank account fraud fell 36% from 2009’s half-year

figure

Source: UK Cards Association

Reasons for decline in online fraud

• Increased customer awareness of phishing scams

• Increased use of anti-virus software

• More sophisticated fraud detection by banks

• Additional authentication - MasterCard SecureCode and Verified by Visa

Increasing customer confidence in online

• 44% of US survey respondents felt more secure on their bank’s web site(comScore 2010 State of Online Banking)

• “It is imperative that banks find ways to tap into the market segment that does not bank online for security reasons.”

Online banking growth

• In the UK, 21.5 million customers bank online (35% of the UK’s total population

Growth in online banking is at an evolutionary rather than revolutionary pace?

Online bill pay

• “A new milestone has been reached in the online banking world with the widespread adoption of online bill pay, now utilised by 64% of the online banking community, up 19 points from the previous year.”

(comScore 2010 State of Online Banking)

Mint.com tracks $175 billion in transactions, $47 billion in assets and has identified more

than $300 million in potential savings for users

Online banks and social media• Who is using social media to engage in two-way

communications with their online bank?

• 11% of financial institutions on the UK FTSE 500 use Twitter to engage with customers

• More than 90% of telecoms companies use social media for two-way communications, compared to just 4% of banks

• (Source: Kencall 2010)

The future is mobile and multi-channel

Banking the “unbanked”

In developing markets like Africa there are more people with mobile phones than bank accounts

Mobile money transfer service M-PESA has more

than 7 million customers (no bank accounts involved)