Should Community Banks Pursue Electronic Banking?

With all the news about technological advances available to the financial services industry, community bankers may be wondering if more of their customers will be asking for remote banking services. As electronic banking services become more viable, no one can predict how quickly consumers and businesses will change their habits. There is, however, some high-level demographic information that suggests that at least certain segments of society may move to electronic banking services more quickly than others. The ABA cites several forces that may increase consumers' acceptance of and demand for electronic banking:

  • Baby Boomers are getting past the cash-intensive requirement of raising families and into more stable saving patterns; the credit card is not as necessary to "buy now, pay later," and its use may be somewhat replaced by the new "pay as you go" products such as debit cards, stored-value cards or electronic currency over the Internet.
  • Busy, dual-income households mean higher income, but also a need for more convenience in shopping, which could eventually make online shopping more mainstream than it is today. Increased demand for online shopping likely will increase the speed of evolution of online payment products.
  • Younger generations may be much more comfortable with the advanced technology, having grown up using computers for leisure and schoolwork activities. The proliferation of computer users may spur online shopping and the use of electronic forms of payment.
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