IQ News: Consumer Trust Tempers Net Banking

With loads of money being poured into the advertising budgets of many online financial service sites, it’s easy to believe that all things related to the Internet and online commerce are getting big play with consumers. Perception, however, may not always match the truth.
According to data from New York-based Media Metrix, one quarter of all Web users visited financial sites between December 1999 and February 2000. In fact, traffic to financial services sites is on the rise, with financial Web sites garnering an average 27-percent increase compared to a 9-percent increase in overall Web traffic.
But advertising interest in the online financial services industry, which encompasses online banking sites as well as online trading sites, doesn’t necessarily mean the public has embraced online banking.
“It’s going to be a slow, steady adoption, a five-year process,” said Vincent Daniel, an equity research analyst based in New York for CIBC World Markets, a Canadian investment bank.
Part of the reason for the slow adoption rate is the need to build trust. However, marketing plays a big role and Daniel said that online banks simply need to market their product better. “The e-brokerage companies are incredible at getting people to trade online.”–Christine Sparta