Online Banking Adoption: Beyond the Tip of the Iceberg

Celent Communications predicts that if U.S. retail bankers apply best practices, online banking adoption will rise from 22% in 2002 to 38% by 2010.

In a new report, Online Banking Adoption: Beyond the Tip of the Iceberg, Celent examines the factors driving online banking adoption in different countries (U.S., Finland, Norway, Sweden, and South Korea) and at select best-practice banks.

"While the dot-com party may be over, U.S. retail bankers are just beginning to celebrate their online banking accomplishments. With national adoption rates reaching 20% in North America, online banking is becoming a mainstream phenomenon. Twenty percent, however, is just the tip of the iceberg. Banks in Nordic countries and South Korea have pushed adoption beyond 35%," said Alenka Grealish, retail banking analyst at Celent and author of the report.

What are the best ways to boost adoption in the U.S.? The report identifies four critical areas: 1) engendering a supportive corporate culture, 2) combining bill pay and online banking, 3) offering superior education and support, and 4) galvanizing branch staff. The report gives case studies illustrating how select banks have successfully accomplished these goals and seen subsequent improvements in online banking adoption rates.

"Two best practices jump out," says Grealish. "First, banks successful at generating activation have made bill pay the centerpiece of their online banking offering—not an add-on service. Second, banks successful at tapping the mainstream are focusing significant resources on educating and galvanizing their branch staff. For newcomers to online banking, encouragement and explanation by a branch staff has proven to tip the scales from awareness to action."

Best-Practice Case Studies in Online Adoption