Customers increasingly prefer bank than biller websites

The latest report released by Javelin Strategy & Research found that an increasing number of people are paying their bills at bank or credit union web sites than at individual biller web sites. The study warns financial institutions that consumers sensitive to fees are prone to switching to banks.

"For the first time, more consumers paid bills via bank sites in the past month rather than biller-direct sites," James Van Dyke, President and Founder of Javelin Strategy & Research said. "But many banks and credit unions have been slow to upgrade, which has created a wide gap in online capabilities and usage when comparing the nation’s biggest banks to smaller banks." 

In particular the study found the following:

• Six in ten of online households bank online weekly, a 12% increase from 2008. 
• Seven in ten of online households pay bills online monthly, up from 64% in 2008. 
• 83 million households will bank online by 2014. 
• Smaller banks are struggling to keep up with bigger banks online. 
• Bank fees are the main reason people switch financial providers. 
• Consumer demand is building for online personal finance management tools that consolidate money-monitoring capabilities offered by free web sites with those offered by banks and credit unions. 

"The playing field is dominated by Bank of America, Citi, JPMorgan Chase and Wells Fargo, which have set the bar high for what consumers can expect from a full-service online-banking operation," Mark Schwanhausser, Research Analyst at Javelin said. "Nearly six out of 10 customers paid a bill online through these titans in the previous 30 days, which is significantly higher than the number of consumers that paid bills online at regional banks, community banks, and credit unions."