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The Bright Future of Direct Banking in The U.S.

Wednesday 7 January 2004 17:56 CET | News

Celent predicts that the top direct bank could boast 5-10 million customers by 2010, up from half a million today. Declining check volumes will contribute to direct bankings dramatic comeback.In a new report, "The Bright Future of Direct Banking in The U.S.: Against the Tide of Branch Banking," Celent examines reasons behind the unusually low adoption of pure direct banks in the U.S. compared to other developed countries. Celents research reveals that the huge volume of checks that must be deposited by consumers, and the low automation of this process, are precisely why uptake has been sluggish so far. As the check goes away, tremendous opportunities for direct banking ventures will develop in the next 5-7 years. Unlike in the U.S., direct banks have gained significant momentum in Canada and in a number of countries in Western Europe. In these countries, the number of customers at the largest direct bank is equal to more than 1% of the total population, compared with a paltry 0.2% in the U.S. As the U.S. dramatically reduces its reliance on checks, particularly the payroll and casual checks that generate so much teller activity, direct banking will get a significant boost. Ultimately, the U.S. is very likely to catch up with the U.K., Germany, and Canada in direct banking adoption.

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Categories: Payments & Commerce | Payments General
Countries: World
This article is part of category

Payments & Commerce