Electronic Commerce

Seventy-eight percent of American adults used the Internet in 2011, according to the 2012 Pew Internet & American Life Tracking Survey. Of those who use the Internet, 71 percent used the web in 2011 to buy a product and 64 percent used social networking sites. Sixty-one percent banked online. This wide acceptance of the online marketplace is changing the way financial services products are research and bought.


Fifteen percent of adult Internet users used Twitter as of February 2012, up from 13 percent in 2011 and 8 percent in 2010, according to the Pew Research Center's Internet & American Life Project. On a typical day, 48 percent of adult Internet users went to a social networking site such as Facebook, LinkedIn or Google+. This growth in the public’s use of social media has presented financial services firms with new avenues of communication and sales prospecting. The Mid-Year 2011 Social Media and Financial Communications report by Edelman found that 90 percent of financial services executives in the U.S. and Europe expected to have dedicated budgets for their social media efforts in 2012. A 2012 survey of insurance companies by LIMRA found that almost 80 percent of companies currently engage in social media, up from about 60 percent in 2010.


   Buy a product    Use social
network sites  
Bank online
All adults 71% 64% 61%
     Men 69 63 65
     Women 74 66 57
     18 to 29 70 87 61
     30 to 49 73 68 68
     50 to 64 76 49 59
     65 and over 56 29 44
Household income      
     Less than $30,000 51 68 42
     $30,000 to $49,999 77 65 65
     $50,000 to $74,999 80 61 74
     $75,000 and over 90 66 80
     No high school diploma 33 63 32
     High school graduate 59 60 47
     Some college 74 73 66
     College  87 63 74

(1) Percent of Internet users age 18 and over within each group who engage in the selected activities.

Source: The Pew Research Center's Internet & American Life Project’s Tracking Surveys, May and August 2011.



($ millions)

  Value of revenues  
  2009 2010 Percent change E-commerce
as a percent of
total revenues
  Total E-commerce Total E-commerce Total
2009 2010
Securities and commodity
contracts, intermediation
and brokerage
$295,424 $11,987 $284,557 $11,687 -3.7% -2.5% 4.1% 4.1%

Source: U.S. Department of Commerce, Census Bureau.

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Online banking, a service provided by many banks, allows consumers to conduct banking transactions over the Internet using a personal computer, mobile telephone or other handheld computer. In recent years online banks, which provide financial services solely over the Internet, have emerged. However, the distinctions between “brick and mortar” and online banks have diminished as traditional banks also offer online banking, and some formerly Internet-only banks have opened branches. Online banking is consumers’ preferred method of banking, according to surveys by the American Banking Association. In 2012, 39 percent of respondents said that Internet banking was their preferred banking method (down from 62 percent in 2011), followed by bank branches, which were favored by 18 percent (down from 20 percent in 2011).

Consumers and Mobile Phone Services, a March 2013 report by the Federal Reserve estimates that 87 percent of Americans own mobile phones, over 50 percent of which are Internet-enabled smartphones. The widespread use of mobile phones has increased the popularity of mobile banking. The American Banking Association estimates that 6 percent of consumers preferred to bank using mobile devices such as cellphones, Blackberries, I-PADs or PDAs in 2012, up from 1 percent in 2011 and 3 percent in 2010.

The 2013 Federal Reserve report examined the use of various types of technology to access financial services, based on an online survey conducted in November 2012. The study found that during the past 12 months:

  • 85 percent of respondents had visited a bank branch, while 74 percent had banked online during the same period. About one third (34 percent) had used a bank-provided telephone number to access bank services.
  • 28 percent of all mobile phone owners have used mobile banking, up from 21 percent in 2011. 48 percent of smartphone owners had used mobile banking, up from 42 percent during the previous year.
  • The most common use of mobile banking was to check account balances or recent transactions (87 percent of mobile phone users), followed by transferring money between accounts (53 percent), deposits (21 percent) and making payments (15 percent).
  • The underbanked (i.e., those without a savings or checking account) make relatively heavy use of mobile banking and mobile payments. Almost 49 percent of the underbanked with mobile phones reported using mobile banking in the past 12 months.


(1) Based on an August 2012 survey of 1,000 Americans age 18 and over.

Source: American Bankers Association.

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  • Six percent of respondents listed mobile banking as their preferred bank channel, up from 1 percent in 2011.


Age  Percent
18 to 29 43.5%
30 to 44 35.7
45 to 59 14.7
60 and over 6.1
Total 100.0%

(1) Percent of respondents who own a mobile phone and have used it for banking in the past 12 months.

Source: Board of Governors of the Federal Reserve System, Consumers and Mobile Financial Services, March 2012.

  • Four out of five people who use mobile banking are between the age of 18 and 44.


Insurance distribution systems have evolved to encompass many of the new ways of transacting business online. Recent studies have shown the Internet playing an increasingly important role in the sales and distribution of life insurance and auto insurance.

Life Insurance Sales: Eighty-six percent of consumers would use the Internet to research life insurance before purchasing coverage, according to the 2013 Insurance Barometer Study by the Life and Health Insurance Foundation for Education (LIFE) and LIMRA. While face-to-face was the most favored life insurance sales channel, with 53 percent preferring that method, online was a strong second (favored by 22 percent of respondents), followed by workplace sales (12 percent), mail (7 percent), email (4 percent) and phone (2 percent). When asked about the concept of retail sales, 17 percent of respondents said they would be willing to purchase life insurance through a retail outlet such as a drugstore or warehouse store.

Auto Insurance Sales: J.D. Power’s 2012 Insurance Shopping study found the majority of consumers (65 percent) visited the website of at least one insurer or quote aggregator in the shopping process, about the same percentage as in 2009. However, the percentage that relied exclusively on the Web to obtain quotes increased significantly, rising from 15 percent of shoppers in 2009 to 23 percent in 2012.

A 2012 study by comScore estimates that 3.1 million auto insurance policies were sold online in 2011, up 6 percent from 2010. Nearly 70 percent of shoppers reported getting an online quote in 2011, about the same as in the J.D. Power study.


  Percent change 
Activity 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Quotes submitted -1% 21% -3% 5% -5%
Policies purchased 8 22 1 6 0.1%

Source: 2013 comScore Auto Insurance Survey.

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