“Check’s in the Mail” Good Enough For PSECU

By Jim Bruene Posted on
Categories: Best of the Web
Innovative Upost@home provides real-time credit for mailed deposit items In a remarkably simple yet highly innovative service Pennsylvania State Employees Credit Union (Harrisburg, PA; 290,000 members; 160,000 online users) www.psecu.com  gives qualified members immediate credit for items “deposited” online. Users logged into online banking simply choose the Move Money tab and follow the simple instructions. Members then have 10 days to get the deposit to the credit union via U.S. mail before the items are backed out. There is no fee. To limit fraud and errors, only about 20% of the CU’s member base is eligible for the program. These 65,000 eligible members start with $1500 in deposit credit, but it can be increased at the discretion of the credit union to as much as $8000 based on usage. Deposited funds are immediately available for use and earn interest from the day of the online deposit entry. History PSECU has…

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The 10 Most significant Innovations & Developments of 2003

By Jim Bruene Posted on
Categories: Innovations
Looking back at 2003, we selected 10 industry developments that provide the best glimpse at the future of online financial services delivery. Innovation of the Year Premium Online Banking: Money HQ from Online Resources Money HQ from Online Resources earns 2003’s Innovation of the Year and number 15 on our all-time list for its innovative packaging of several advanced features into a fee-based premium service. The new service, powered by CashEdge, combines account aggregation and interbank payment services. It’s accessed via a tab (far-right) on Online Resources Internet banking platform (see screenshot below left).  The premium service offering is optional for client financial institutions, but with zero out-of-pocket costs, the company expects widespread adoption. Currently, 40 out of 500 clients are live with the service, including First Command Bank (Fort Worth, TX) and Pinnacle Federal Credit Union (Edison, NJ). Suggested retail price is $5/mo plus transaction fees for certain A2A…

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Four of the top-20 Innovations Debuted in 1998

By Jim Bruene Posted on
Categories: Innovations
Class of 1998 Four of the top-20 innovations debuted in 1998. Only one exists today in the same format, albeit under new ownership: LendingTree.   Table 13 The Top 10 Annual Innovations: 1999 to 2002 Source: Online Banking Report, 1995 – 2002                  *Due to high activity levels, two lists were prepared in 2000.   Table 14 The Top 10 Annual Innovations: 1995 to 1998 *The 1995 Top Ten is not directly comparable to other years; it simply lists the top 10 financial Web sites   of the year according to the criteria  

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A History of Banking Innovations

By Jim Bruene Posted on
Categories: Innovations
Online Banking Report has covered online banking for nine calendar years beginning in 1995. In that time, we’ve seen the industry go from a premium-priced niche service used by just one of every 300 households to a mostly free, mass-market offering used by one of every three households. Following is a list of the top 25 online banking innovations of all time. There were two additions this year, Online Resources “Money HQ,” at number 15, and PSECU’s Upost@home at number 23.   Table 12 Top 20 Web Banking Innovations of All Time (North America Source: Online Banking Report, 12/03

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Forecast: 2004 Through 2013

By Jim Bruene Posted on
Categories: Online Banking Report
Last year, we predicted there would be 32 million U.S. households banking online by year-end 2003. Actual results appear to be slightly higher, with an estimated 33 million households as of Dec. 31.* The payments area continued to be a major factor in the household growth, as direct bill-pay at billers’ websites increased 20-fold, from 1 million users at the beginning of 2001 to 20 million at year-end 2003. Not only is online banking penetration growing, but the level of usage is also increasing. Power Users, households that access bank accounts AND pay bills, have grown five-fold in the past three years; from 3.5 million to 23 million. Less than half use their bank’s pay-anyone bill-pay service, electing instead to go directly to the biller’s site to settle the bill. For 2004, we project an overall growth of 4 million new online banking/bill-pay households (range: 2 to 5 million), about…

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Online Banking: 2003 Results

By Jim Bruene Posted on
Categories: Online Banking Report
2003 Results During 2003, online banking continued to grow at a rapid clip, adding 5 to 6 million new households, bringing the U.S. total to around 33 million, an 18% increase over 2002. Worldwide totals grew at a faster clip, up an estimated 25% to 30%, or 25 to 30 million households, ending 2003 at more than 130 million.   Table 3Consumer Households Using Online Banking: U.S. vs. Worldwide millions of households actively using online banking and/or online bill payment Source: Online Banking Report estimates, accuracy estimated at plus or minus 12% U.S., 25% worldwide Table 4Annual Growth Rate of U.S. Online Banking Households millions of U.S. households and percent change from previous year Source: Online Banking Report estimates, 12/03; accuracy estimated at plus or minus 12% Definitions As the market has matured, we’ve noticed much less variance in the estimates from most major researchers. Most of the differences can…

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A Look Back : Online Banking Timeline

By Jim Bruene Posted on
Categories: Online Banking Report
Table 1 Online Banking Timeline number of U.S. households using online banking/bill payment Source: Online Banking Report estimates based on industry data plus or minus 15%, 12/03  Every spreadsheet and business plan needs a prediction of future demand. So every year we gather forecasts made by prominent researchers and analysts, compare and contrast their results, layer on our own insights, and develop a 10-year forecast. Accuracy is estimated at plus or minus 15% for years one through three, plus or minus 20% for years four through seven, and plus or minus 25% for the out-years. Over the years we’ve demonstrated a respectable track record . Our first comprehensive forecast made six years ago (year-end 1997), predicted that online banking usage would increase nearly 6-fold (560%) from 4.5 million in 1997 to 29 million households by year-end 2003. That prediction was nearly dead-on, perhaps 10% low, with an estimated 29 to…

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The Forecast Top Management (finally) Gets It

By Jim Bruene Posted on
Categories: Online Banking Report
  To many long-time bankers, online banking hadn’t proved its worth prior to 2003. However, with usage surpassing 30% of all U.S. households, and with leaders such as Bank of America pushing past 40%, even the skeptics are beginning to recognize the potential. By the end of the decade, total U.S. penetration is expected to approach 50%. Unlike many new technologies, online banking delivers on three levels: improved customer satisfaction, increased sales, and cost savings. Now that these institutional benefits have actually been documented, the rest of the decade promises to see an extraordinary build-out of online capabilities, much like the explosion of ATMs in the late 1980s as the channel became profitable. Looking back at the last year, three changes stand out: The onslaught of email spam and scams causing short-term headaches and long-term credibility problems. The change in U.S. press coverage from somewhat negative to very positive (except…

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