Ongoing Study Finds Online Banking Leads Internet Use Growth

WASHINGTON – Online banking and travel purchases continue to be the most popular business done electronically by consumers nowadays, with Internet banking leading the growth with a 164% increase in the past two years, according to an ongoing study of American online activity by a leading independent research group. In March of 2000, 17% of Internet users (about 14 million Americans) had banked online, while 36% of them had made a travel purchase that way. By the end of September 2002, that number had increased to 32% (about 37 million Americans) for Internet banking and 50% for online travel purchases, according to the Pew Internet & American Life Project. The study also found that Internet banking now is basically tied with instant messaging in popularity as a task done on a “typical day” online. In September, 10% of Internet users banked online on a typical day, the survey found, twice as many as did in March 2000 and comparable to the 11% who said they now use instant messaging on a typical day. (By contrast, the report said: “Internet users are no more likely to make travel purchases now than they did in March 2000 – about 1% of Internet users do this on a typical day.”) The survey also found that Internet banking now is equally popular among broadly defined ethnic groups: The penetration rate for online banking among African-American Internet users was 30%, for Hispanics 33% and for white Internet users 32%. However, the generation gap continues. “Younger Internet users are more likely to be e-bankers – 33% of Internet users between 18 and 29 years old, 36% of Internet users between 30 and 49 years old, 27% of Internet users between 50 and 64 years old, and just 16% of Internet users age 65 and older have done it,” said the report from the project’s director of research, Susannah Fox. The reasons for banking online were fairly consistent across the board, however. “Convenience is the number one attraction for all online bankers,” the report said. “No one group felt more strongly than another about the advantages of better control over finances, not having to talk to anybody, getting more information, saving money or using a wider menu of bank services online,” it said. The survey was conducted between Sept. 9 and Oct. 6, 2002, among 2,092 adults, with a margin of error of plus or minus two percentage points among the entire sample and three percentage points among the 1,318 Internet users in the group, the organization said. -