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Consumers Shift to Online Financial Services

ComScore released the results of their study of online credit card services, which revealed strong growth in the use of the Internet for credit card account management.

The study found that customers visited their credit card issuer site 57 percent more often to service their accounts in 2006 than in 2005. This follows a 55 percent rise in 2005 over 2004.

Strong growth in online servicing has continued in the first quarter of 2007, as the number of customer visits to issuer sites jumped to more than one billion, an increase of 32 percent versus the same period a year ago.

As part of the study, comScore measured consumer attitudes toward online servicing of credit cards. The survey revealed that 63 percent of credit card users find online servicing important to their overall experience with their credit card.

Sixty-nine percent of all customers have logged into their credit card Web site at some point in time and 58 percent of online customers log in more than once a month. Among customers for whom online servicing is important, viewing online statements, paying credit card bills, and disputing charges were cited as the most important online services.

Underscoring the importance to customers of making payments online, comScore's research revealed that the number of online credit card payments has grown significantly during the past two years. In 2006, 524 million credit card bills were paid online, marking a 73 percent increase versus 2004.

"Investing in e-servicing is critical for credit card issuers because it not only helps them realize cost savings but the Internet is also becoming the preferred channel for many customers to interact with the issuer product and brand," said Kevin Levitt, vice president of comScore credit card solutions group.

Enrolling customers for paperless credit card statements is one of the biggest cost-saving opportunities for issuers, and the comScore survey revealed that 62 percent of credit card users are either already using the service or are willing to use the service.

Issuers can expect paperless adoption to grow with rising adoption among younger consumers, as those ages 18 to 44 are 20 percent more likely to use the service than consumers age 45 and older.

Incentives and appeals can boost further adoption of paperless statement service among various customer segments, with 58 percent of them being enticed by a cash incentive.

I believe that in North America, and perhaps in Europe, consumers will eventually evolve to routinely performing financial service transactions via a mobile device -- which is already common within the leading Asia-Pacific markets.

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