Survey finds increase in online banking

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Online banking has become the fastest growing online activity, according to a recent study, but some students still voice security concerns.

According to a survey by the Pew Internet and American Life Project, the number of Americans who perform daily banking activities online has increased by 58 percent from late 2002 to 2004. According to the survey, 44 percent of adult Internet users now utilize online banking.

In order to accommodate the high demand for online banking, banks have responded by adding more online services.

“There are many forces at work when it comes to the rise in online banking,” said Susannah Fox, associate director for the Pew Internet and American Life Project. “Consumers want the convenience of banking at all hours, and (of) keeping track of their finances online. Banks seize their opportunity to capture lucrative customers, and offer more online services for free.”

Factors cited for the sudden rise in online banking include the development of high-speed, broadband Internet connections, and the aging Generation X, who grew up during the beginning of the Internet era. Generation X, which includes individuals between 28 and 39 years of age, is the largest group of online banking users, according to the Pew Internet survey.

“Broadband connections proliferate, making it easier for people to do their chores, as well as have fun online,” Fox said. “I’m not sure there is one key factor in the increase of online banking, but we do see the most significant growth among Internet users with broadband connections, and those with three or more years of experience online.”

Characteristics such as affluence and gender also play determining roles. Members of wealthier, suburban households are more likely to do their banking online, while men have increased their use of Internet banking much more rapidly than women. Forty-nine percent of men with Internet connections did their banking online in 2004, as opposed to 39 percent of women. In 2002, the number of male and female users was almost equal, according to the study.

“We have not done the analysis to determine if gender is an independent factor, or if it is related to more men getting broadband access at home, or fewer women holding onto their Internet connections over many years, or another factor altogether,” Fox said.

Monica Her, finance professor at CSUN, said more detailed research must be done in order to determine why men have become more likely to bank online than women over the past two years.

“The numbers do not tell us much of anything,” Her said. “Online access is not the only factor. Further information, such as website design (and) services provided, will help in seeing the (whole) picture.”

Despite the increase in online banking usage, students said they have concerns about security issues, such as identity theft and fraud.

“I don’t trust the Internet,” said Van Kochkarian, freshman biology major. “I never buy anything or do any money things on the Internet.”

Kochkarian said he has an Internet connection at home, but fears he may experience the same Internet problems as his aunt.

“(She) got her identity stolen on the Internet,” said Kochkarian. “She thought she was using a safe website. Then she checked her statement and saw all this money was taken out.”

Some students said they like to do banking and shopping the old-fashioned way.

“I like to actually see and feel and touch a product before I buy it,” said Meg Derbedrossian, senior communication studies major. “I think (online services) are good for people that don’t have time, but people like me keep (salespeople) and bank tellers employed.”

Brooke Lewis, senior communication studies major, said online banking is more convenient for her busy schedule.

“It’s easy, (and) it’s convenient,” Lewis said. “I can check everything at any time.”

Lewis, who works and is a full-time student, said she does not have security concerns regarding online identity theft.

“I figure that if they want to get your information, they can just as easily get it through the mail, or all they have to do is call you up and pretend to be a telemarketer.”

Lewis said the benefits outweigh the risks of online banking.

“(Banking online) saves time, and being a college student, you need to save as much time as you can,” Lewis said.