The current GKIeNET – T-Home – T-Mobile Report on the Internet Economy reveals that the number of internet and mobile banking customers is rising rapidly, while there is little demand for telephone banking services with live operators.
At September 30, 2008, credit institutions offering internet checking account services had almost one million 900 thousand individual customers with internet banking agreements, up nearly 6% from the previous quarter and some 24% year-on-year. At the same point in time, the number of corporate internet banking clients was almost 300 thousand, reflecting an increase of 1.5% over the preceding three months and a growth of more than 27% year-on-year. At the end of the third quarter of 2008, internet banking customers accounted for 27% of all individual clients of banks offering online banking services on average in the household segment, compared with 35% on average in the corporate segment.
Figure 1. Number and Average Percentage of Household Customers with Internet* or Mobile Banking Contracts at Banks (end of Q3, number and percentage)
* The significant surge in the percentage of customers in the fourth quarter of 2004 is due to a change in the contract structure of a major bank., Source: GKIeNET – T-Home – T-Mobile, 2009
At September 30, 2008, , almost 2.6 million individual customers and some 185 thousand corporate customers had mobile banking agreements. The number of individual mobile banking customers rose by 7% over the period of three months and by 29% year-on-year. The number of corporate customers increased by 4% during the quarter and by almost 29% over the period of twelve months. At the end of the first quarter, individual customers with mobile banking agreements accounted for 37% at banks offering these services, while 17% of corporate customers had the option to take advantage of mobile banking opportunities.
At September 30, 2008, approximately 196 thousand web cards (banking cards specifically used for payments over the internet) were in circulation, up by ten thousand from the previous quarter and by approximately 10% from the same period of the previous year. The slight rise can likely be attributed to a modest increase in the demand for online services, including online shopping.
Figure 2. Number and Average Percentage of Internet * and Mobile Banking Contracts at Banks (end of Q3, number and percentage)
Source: GKIeNET – T-Home – T-Mobile, 2009
At the end of the third quarter, banks had almost 3.2 million customers with live telephone banking agreements in the household segment and approximately 184 thousand in the corporate segment. In the category of banks offering live telephone banking services, almost 44% of all individual customers and some 27% of all corporate customers had these services included in their contracts at the end of the third quarter of 2008. However, the number of actual live telephone banking transactions per customer continues to be below 0.1 per month. In addition to the downward trend, the low figure also indicates that there is very little actual demand for these services. In the household segment, the number of transactions per customer has been around 0.1 for a long time, while the number of customers with contracts including phone banking services has been rising at a diminishing rate, signaling that this option is becoming less popular with customers than online services.
In the third quarter of 2008, individual customers received an average of 10 text messages per month on their mobile phones with information regarding their checking accounts, while corporate customers received an average of more than 22 text messages of this nature.
Number of Clients with Securities Contracts
Banks offering securities services over the internet had some 117 thousand customers at the end of the third quarter of 2008. The number of clients remained flat since the preceding quarter. Based on the expectations of banks and estimates by GKIeNET, the number of these clients may approach 137 thousand at the end of 2008, which is 18% more than the estimated figure at December 31, 2007. The reason may once again be the economic crisis as more and more clients are trying to gain some extra income in the securities market by shorting stocks.
The number of corporate clients utilizing online securities services continued to expand dynamically in the third quarter of the year, following the halt in the second quarter. Their number approached 4,600 at the end of the third quarter of 2008.
Figure 3. Number of Household Clients Utilizing Online Securities Services *
The drop at December 31, 2004 was because of a significant change in the clientele of a single bank.
Source: GKIeNET – T-Home – T-Mobile, 2009T
Banking Transactions on the Internet
Banks expect the swiftest growth among online banking services in mobile phone top-ups, online transfers, retrieving account information and making time deposits, both in the household and corporate segments. The surveyed banking professionals also gave high ratings to sales and purchases of stocks in the household segments, while verifying transactions is an area where above average growth is expected in the corporate segment.
As in the previous quarter, financial institutions expect significant growth in household stock trading. Attitudes in finance are improving slowly but continuously, and so securities trading is becoming relevant for ever wider circles of customers, widening the savings portfolios of households. Group collections are slowly but steadily becoming more frequent, compared to prior periods, among both client segments. The growth rate of customers topping up their mobile phones over the web continues to be high, while online loan application is still the slowest-growing area, both in the household and the corporate segments, although there is increasingly tangible growth among the former.
Number of Transactions
In the third quarter of 2008 the average number of transactions per internet banking clients was 0.9 each month. Throughout 2007 the number of transactions per customer was 0.7; this ratio rose slowly but steadily in 2008. What this means is that user attitude changed little over the past years, and that these attitudes are quickly adopted by new customers.
In the corporate segment the average client initiated 8.7 transactions each month ; this value is somewhat higher than the data in the preceding quarter. Compared to previous periods, the average number of transactions per customer is flat among household clients, while corporate clients have a pattern of a slight but continuous increase followed by a plateauing at a higher level.
Figure 4. Average Number of Online Transactions per Internet Banking Customer
Source: GKIeNET – T-Home – T-Mobile, 2009
1 – Based on the responses of internet lending institutions answering this questions.
GKI, in cooperation with T-Mobile, has published a quarterly research summary titled “Report on the Internet Economy” since 2001, containing comprehensive analyses on the progress of the internet economy. The publication has been revised in 2008, with each new quarterly issue designed to focus on a specific topic. There will be three concise briefings for the press and for interested parties based on each quarterly issue, summarizing the key findings of the quarterly reports. A total of three press releases will be sent out in each quarter, which will also be available on the website of GKIeNET.