|
TECHNOLOGY |
|
 |
 |
ELECTRONIC COMMERCE
Using advanced information technology, banks have transformed some of their core services, such as personal banking. Consumers can now conduct many banking activities over the telephone and online as well as in traditional branch offices. As people have grown more comfortable making routine purchases online, there has been a corresponding increase in their use of the Internet to manage their personal finances.
| |
|
GROWTH IN ONLINE BANKING, 2000 AND 2005 (1)
|
March
2000 (2) |
February-March
2005 (3) |
| All Internet users | 17% | 41% |
| Sex | | |
| Men | 18 | 41 |
| Women | 17 | 41 |
| Race | | |
| Whites | 17 | 43 |
| Blacks | 19 | 25 |
| Hispanics | 20 | 40 |
| Age | | |
| 18 to 29 | 19 | 40 |
| 30 to 49 | 18 | 48 |
| 50 to 64 | 16 | 35 |
| 65 and over | 3 | 27 |
|
(1) The percentage of those in each group with Internet connections who have tried online banking. For example, in March 2000, 17 percent of all internet users had done online banking.
(2) 1,690 Internet users.
(3) 1,450 Internet users.
Source: Pew Internet & American Life Project Survey. |
| - In 1998, 13 percent of Internet users said they had banked or paid bills online. In 2005, 41 percent of internet users said they had banked online.
| |
|
ONLINE INSURANCE SALES
A 2007 study by Celent suggests that insurance shoppers are increasingly turning to the Web. The analysis is based on three types of online experiences: "Web influenced," involving the use of online information sources; "Web initiated," involving substantial online interaction, such as a request for a quote; and "purchased online," involving a complete sale from quote to policy issuance that takes place entirely online. The study looked at three sectors: auto, life and health. Celent foresees the greatest growth in the auto sector, with Web influenced purchases expected to grow from 70 percent of sales in 2007 to 90 percent by 2011. A 2008 study of online auto insurance purchases by comScore also saw strong growth in this sector. The results show that the number of quotes requested online increased by 15 percent and the number of auto insurance policies purchased online increased by 37 percent from 2006 to 2007. Consumers requested more than 100 million auto insurance rate quotes between 2004 and 2007, according to the study.
Celent estimates that nearly 30 percent of auto insurance sales will take place online by 2011, compared with 10 percent of individual life insurance sales and over 50 percent of individual health insurance sales.
Confirming the likelihood of growth in online insurance sales, a study by the Customer Respect Group of a representative sample of auto insurers’ websites found that from the viewpoint of a consumer they had improved since the last study in the second quarter 2007. The first quarter 2008 study uses a Customer Respect Index (CRI) on a ten-point scale to measure the customer’s online experience. The average CRI score for the industry as a whole was 5.5, slightly better than last year’s score and in line with improvements in other industries. Specifically, 23 percent of sites surveyed offered online purchasing of policies. In the 2007 survey, only 5 percent offered the feature that enables customers to buy online and print out the necessary documents. Other improvements include more real-time interactive chat sites, more sites with telephone numbers on every page, more helpful email replies and faster response times. Eighty-six percent of sites provide “contact a rep” links or buttons on the home page.
| |
|
ONLINE AUTO INSURANCE ACTIVITIES (1)
(000)
| |
|
ONLINE PERSONAL INSURANCE SALES, 2007(1)
| - Celent estimates that nearly 30 percent of auto insurance sales will take place online by 2011, compared with 10 percent of individual life insurance sales and over 50 percent of individual health insurance sales.
| |
|
E-COMMERCE AND TOTAL REVENUES,
SECURITIES AND COMMODITY CONTRACTS, 2005-2006
($ millions)
| |
|
PURCHASING CHANNELS
A survey of bank customers by Booz Allen Hamilton found that the majority of consumers prefer to purchase financial products at bank branches rather than through other channels. Customers were most comfortable buying straightforward credit products—such as credit cards and personal loans—over the Internet, with 21 percent of respondents favoring online channels for these products.
| |
|
GLOBAL PREFERRED PURCHASING CHANNELS, 2007
(1) Includes credit cards and personal loans.
(2) Financial advisors and account managers who meet with customers.
Source: Booz Allen Hamilton Revenue Enhancement Study 2007.
| |
| |
|
|
|
