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Online banking will be the primary contact point for banking customers around the world by 2012, expanding globally at a compound annual growth rate of 20% over the next three years, a new TowerGroup report says. In the U.S., TowerGroup predicts some 40% of bank transactions will occur online by 2012. And as more transactions shift from branches to the Internet, this trend could jeopardize some credit and debit card issuers' in-branch card-marketing efforts, says Nicole Sturgill, a TowerGroup research director and the author of the report "Consumer Online Banking Moves from Supporting Case to Lead Actor." TowerGroup is an independent research firm owned by MasterCard Advisors. "Banks studying the growth rates of the various product-delivery channels should see some major shifts in the way consumers interact with their banks that could affect in-branch card marketing efforts," Sturgill tells CardLine. While some banks generate as many as half of their card customers through in-branch marketing, that could change as online channels grow, she adds. In the U.S., online-initiated bank transactions are poised to increase at a compound annual growth rate of 11% through 2012, TowerGroup's research shows. TowerGroup predicts call center-initiated transactions to increase at a compound annual growth rate of 4%, while it expects transactions initiated through branches and ATMs to remain mostly flat. Online transactions, which will account for about 23.3 billion transactions this year, will grow to 33.3 billion annually by 2012, while call center-initiated transactions will grow from 17 billion per year to 19.3 billion annually, the report says. Branch-initiated transactions will remain flat at about 14.8 billion per year, and ATM-initiated transactions will increase slightly, to 15.1 billion per year in 2012 from 14.9 billion. "Face-to-face contact with customers is highly prized, and branches will continue to play a big role in marketing products like cards," Sturgill says. "But as more people move to online channels, banks will have to be more creative, using personalization and other customized approaches, to market cards online."
