ATLANTA -
As Synergistics Research Corp. notes in new analysis, “Most consumers would have found it difficult, if not impossible, not to have received an invitation from an Internet-based financial institution to open a deposit account in the past few years. Prolific direct mail solicitations, magazine inserts, and Web banner ads have all pitched offers for bonus interest rates, sign-up bonus deposits of $25 or $50, and various other financial incentives.”
In a new study titled, “The Future for Direct Banking,” Synergistics found that one-fifth of consumers currently has a relationship with an Internet-based provider–one that has no branches and requires the use of electronic transactions (see graphic, page 31).
What should be of particular concern to traditional providers, said Synergistics, is that these cyber-banks are appealing to a particularly attractive market segment–younger and higher income households.
“A direct bank user has an average age of 47.8 and an average income of $99,200, while an online banking user at a traditional institution has an average age of 52.1 and an average income of $60,300,” it said.
“Traditional providers should be concerned about this migration of core deposits to Internet players, who have obviously found an effective strategy by focusing on a product that is seen by many as ‘unexciting’–the regular savings account,” said Synergistics Research CEO William McCracken. “In addition, they are appealing to a particularly attractive market segment who are younger and more upscale. Traditional providers need to counter the loss of business of attractive customers to Internet-based providers.”
For info: www.synergisticsresearch.com.
