If your company is in the financial services market, you’re heading for fast-paced changes over the next few years, according to analysts. While the average person may never say farewell to brick-and-mortar banks, Internet banking and financial services will mushroom over the next three years. According to Jupiter Communications, your business will need to provide convenient, one-stop-shopping for financial services to make it as part of this market, projected to be $3 trillion by 2003.
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According to Jupiter, 41 percent of U.S. households, or 20 million households, are expected to trade stocks online by 2003. The number of trades per household will drop, however, because this less affluent population won’t be as active online as today’s investors. Jupiter predicts the online trading market will increase from $415 billion in 1998 to more than $3 trillion by the end of 2003.
Today’s banking customers like having access to account balances and transaction data online. But soon these services will grow to include online bill payment, personalized reminder services, credit and lending services, personalized financial management, securities trading, and insurance. Jupiter estimated in an Industry Standard article that 38 percent of U.S. households that have banking services will use a variety of online financial services by 2002.
IDC estimates that U.S. banks and credit unions offering online services will grow from 1,150 in 1998 (6 percent of U.S. banking institutions) to 15,845 (or 86 percent) by 2003. Ovum, a London analyst group, predicts that online bill presentment will increase from 300 million in 1999 to 32.8 billion in 2005, and online payments will increase from 600 million in 1999 to 40.4 billion by 2005 (see table below).
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