RealTime IT News

Report: Sales of Online Banking Apps Growing

Internet banking applications are quickly becoming the panacea for banks hoping to increase their market share and retain customers, says a new report from International Data Corp.

The report shows that sales of these applications topped $93 million in 1998 and will jump to over $326 million in 1999.

IDC said it attributes the strong growth to widening acceptance of the Internet and changes in the financial services industry that leave banks, insurers and brokerages all competing for customers in a free-for-all environment.

"Not only can banks use these applications and services to quickly set up an Internet branch, they can also rely on the medium to up-sell and cross-sell products previously unimaginable in the banking world," said Albert Pang, research manager with IDC's e-commerce software applications program.

More than 1,200 banks and credit unions in the United States signed with online banking applications vendors and providers to build fully transactional Web sites in 1998. In 1999, 7,200 more will acquire online banking applications, the report says.

By the year 2000, IDC expects Internet banking applications to account for almost one-third of the overall U.S. banking applications market. In addition, Internet banking service revenues will outpace applications sales as bank Web sites attract new users, which in turn generate higher recurring fees for service providers.

The report, entitled "Seismic Changes in Financial Services Industry Spur Strong Demand for Internet Banking Applications" includes brief profiles on Internet banking applications vendors and Internet banking service providers.

IDC is a division of International Data Group, a large IT media, research and exposition company.