Internet banking outstrips telephone banking for first time

For the first time the number of adults using internet banking exceeded those using telephone banking, according to latest figures from APACS, the UK payments association.

The figures show 16.9 million adults - over a third of the adult population - now bank online, with two-thirds of online current account holders now going online at least once a week. Unsurprisingly more people are also using their online account more regularly - with one in five users going online daily compared to one in thirteen just four years ago. 90 per cent of internet banking users also shop online - with 84 per cent of those using their online bank account to make payments or transfers.

For the first time since its introduction, the number of people using telephone banking has fallen - to 15.4 million from 16.0 million in the same period last year. In contrast, over the last four years the number of internet users banking online has risen significantly, from 7.5 million to 16.9 million.

Sandra Quinn, director of communications at APACS, said: “The older we get the more complex our finances tend become, as they include a range of regular payments: from paying our mortgage to our mobile phone bill. Our research shows that increasingly, if you are under 35, you are more than likely to be turning to the internet rather than the phone to manage your finances.

Although the chances of being a victim of online banking fraud are small, you can reduce the risk further by making sure that you remain wary of unsolicited emails claiming to be from your bank and that no matter what you are planning to do online you should only use a fully protected PC. This means having a firewall installed, and regularly updated antivirus software.”

The growth in the use of internet banking can be seen across all age groups. 16-24 years olds have shown the greatest growth in the last four years, with the proportion of internet users in that age group using internet banking almost doubling from 13 per cent in 2002 to 25 per cent in 2006. The figures also show that the majority of adults aged between 25 and 54 who use the internet now use online banking. Although the number of ‘silver surfers’ - those aged 65 or over - who bank online has also shown large growth over the last four years, there is still an age split between those under 55 who prefer to use the internet for their banking and those aged 55 and over who prefer to use telephone banking.

Younger customers make up the greatest proportion of new users of internet banking (those who have been banking online for less than six months). 29 per cent of those who have been banking online less than six months are aged 16-24 and over 50 per cent are under 35.

In addition, the figures reveal that those who bank online tend to do so for more than one account. Almost six in ten (58 per cent) of those who access their main current account online also access another account through this channel. 98 per cent of those who access their credit card account over the internet access multiple accounts this way.