Banking in Cyberspace: Online Banking on the Up Since 2001

As increasing numbers of people turn to the internet to carry out their everyday activities, banks and building societies have been offering many British financial consumers the option of carrying out their banking online in increasing numbers. In line with this trend, APACS - the UK payments association - has just released five-year growth statistics for telephone, online banking and e-commerce, from 2001 to 2006.

The statistics show that the number of adults in the UK making use of online banking facilities has increased by 174 per cent in total, from 6.2 million in 2001 to 17 million in 2006. However, the biggest increase in online banking usage has by far been in the over-55s category, which shows a 350 per cent rise since five years ago.

Sandra Quinn, director of communications at APACS, commented:

"Our research shows that more and more people are turning to the internet rather than the phone to manage their finances. While younger people continue to make up the majority of online banking users, the greatest proportion of new internet bankers are the over 55s. As a group, they have come to embrace the ease and efficiency that online banking offers."

Many leading banks and building societies in the UK now allow existing and prospective customers to apply for a current account or savings account in the UK online. In fact, online banking has developed to such an extent that some financial institutions even let customers open savings accounts that are managed exclusively over the internet.

The rise in online banking has also meant an increase in the amount of financial information and advice that's available to British consumers over the internet. This means that banking customers have been better equipped to choose the online bank account that best suits their personal circumstances.

Furthermore, the APACS survey found a 157 per cent increase in the number of people shopping online, with a corresponding 186 per cent rise in the number of purchases per online shopper - from 8.4 in 2001 to 24 last year. According to the research, online banking users are typically more likely to make more purchases online per year, than non-internet bankers. Statistically speaking, that means online bankers make 29.2 purchases per year, while non-internet bankers purchase only 16.4 goods annually.

But despite the burgeoning number of people that are transferring their everyday financial activities to the sphere of the internet, intimidating reports of online fraud still have many feeling cautious about banking in cyberspace. However, Sandra Quinn's advice on the matter indicates that there are many simple things that online bankers and shoppers can do to protect themselves against internet crime. She comments:

"By following simple tips such as making sure your computer has up-to-date anti-virus software and a personal firewall installed, you can minimise your chances of being a victim of online fraud."