Growth in Internet Use
Growth in Internet Usage and its Impact on Online Banking
The Internet is turning into a basic staple of American existence
by Dr. Michele Petry, Editor, BankersOnline.com
Americans have always had a love affair with new frontiers. Perhaps it springs from our Yankee origins as a people who braved the seas in search of a new land and who then pushed westward to tame a wild continent. So, when the Internet emerged as a new "virtual" frontier, it came as no surprise that Americans were once again at the forefront of the exploration.
Early adopters quickly seized on the Internet as a vast new space to be explored, exploited and conquered. Just like the early days of the wild west, prospectors staked their claims and fortunes to new virtual domains. And today, almost as if we were reading pages from a history book, we find ourselves just like those frontier pioneers experiencing a temporary "burst" of the bubble.
But wait! The history books may still provide the greatest insights into how the taming of the Internet may unfold. Just like the wild west grew into rich territories populated by masses of people seeking a better quality of life, if you look beyond the current media messages sounding the drumbeat of an Internet "bust", you will find solid evidence that the Internet is turning into a basic staple of American existence. The latest figures on Internet usage, released in a Department of Commerce report, show that Internet use is rapidly rising to include virtually all levels of the American population.
According to the report, the share of households with Internet access soared by 58%, rising from 26.2% in December 1998 to 41.5% in August 2000. There were 116.5 million Americans online at some location in August 2000, 31.9 million more than there were only 20 months earlier. The share of individuals using the Internet rose by a third, from 32.7% in December 1998 to 44.4% in August 2000. If growth continues at that rate, the Dept. of Commerce predicts that more than half of all Americans will be using the Internet by the middle of 2001.
What does this mean for Internet banking? Echoing the results obtained by private research firms, the government study has revealed that the disparity in Internet usage between men and woman has virtually disappeared. Furthermore, the report shows that the gap between Internet usage in rural areas and households nationwide has narrowed considerably. In rural areas, 38.9% of the households had Internet access as of August 2000, a stunning 75% increase from the 22.2 in December of 1998. Additionally, the Dept. of Commerce report showed that individuals 50 years of age and older, experienced the highest rates of growth in Internet usage of all age groups: 53% from December 1998 to August 2000.
The government findings bode well for expansion of Internet banking and electronic bill payment and presentment. Both of these applications stand to benefit from the rapid adoption of Internet usage. As the Dept. of Commerce report shows, email remains the Internet's most widely used application, but online shopping and bill paying applications are experiencing the fastest growth.
Internet access is no longer a luxury item, but a resource used by many. Banks that keep pace with broad consumer demands stand to benefit greatly from this new virtual frontier by using the Internet as a distribution channel to service their customers.
Michele Petry, Ph.D., is President of the Glia Group, an Internet consulting and web strategy firm. Prior to forming Glia, Michele was the Director of Specialized Services at Thomson Financial Publishing where she served as publisher of Thomson's Blue Book, The Banker's Guide to Product and Service Providers, and was responsible for the redesign of the online Thomson Financial Marketplace, launched in June of 1999.
First published on BankersOnline.com 01/08/01.
Copyright, 2000, BankersOnline. All rights reserved.
First published on 01/08/2001