According to a National Office for the Information Economy's latestCurrent State of Play report, the number of Internet banking users in Australia is steadily rising, up from 1.37 million to 1.75 million for the Juneâ€"September 2000 quarter.

Hitwise data shows a similar increase in popularity, with the number of page impressions directed at banking sites as a percentage of overall Internet traffic rising dramatically over the past 12 monthsâ€"an increase of 77 percent.

Banking is the most popular Business and Finance sub-category measured by Hitwise, accounting for 22.64 percent of all traffic to the category, ahead of Stocks and Shares, Employment, and Telecommunications. Despite the implications of borderless banking that online financial services carry, Australians are far less likely to visit offshore institutions, preferring to use Australian banks.

Current data shows that 94 percent of traffic to banking Web sites is directed at domestic sites.

Unsurprisingly, the big four banks dominate online, with their main sites and online banking facilities occupying the top six places in the Hitwise Business and Financeâ€"Banking and Financial Institutions category for the month of July 2001, capturing 63.65 percent of all traffic to the category.

The leading online bank in Australia is unquestionably the CBA, which announced its one millionth NetBank customer in June. The CBA's NetBank ranks ahead of the main CBA site as the most popular banking site in Australia. The ANZ, NAB, and Westpac round out the top places, and of the smaller banks, St George, ING Direct, and the Bendigo Bank all make the top 10 sites.

Who visits Internet banking sites?

According to Hitwise demographic data, 57 percent of visitors are men, slightly up on the overall average of 55 percent for all sites. While 18-24 year-olds account for 23 percent of all Internet traffic measured by Hitwise, they supply just 13 percent of traffic to Internet banking sites, showing that younger Australians use the Internet more for education and entertainment purposes than they do for paying bills and accessing their banking details. Online banking is particularly popular with the 25-34 age group, who supply 33 percent of visits to Internet banking sites.

Although one of the selling points for online banking is that customers can perform transactions outside business hours, the daily traffic average for banking sites shows that they receive more traffic on weekdays than on weekends, with Monday and Thursday the most popular days.

Hitwise click-stream data shows that the major banks tend to feed off each other in terms of traffic, with each site getting a significant number of visitors from its competitors. This shows that many customers have accounts with more than one bank, and/or shop around for banking services and products.

An October 2000 survey of Australian Internet Users by the Centre for International Economics and ACNielsen showed that almost 50 percent of those surveyed had used online banking facilities. And in response to a survey last year by the Angus Reid Group, 98 percent of Australians banking online said they would continue to do so. The same survey suggests that 32 percent of Australian Internet users not currently using Net banking intend to start online banking in the near future.

In conjunction with Hitwise's traffic statistics, these figures indicate a bright future for the online banking industry in this country, but why the confidence? It could be because Australians are less concerned about security issues surrounding online banking than they are about potential problems with e-commerce sites. After all, banks are familiar institutions that we have been giving personal information to for years. That familiarity and stability is what customers require before entering their personal financial details online.

Having said that, for all its progress over the last year, online banking is not immune to electronic glitches.

Adrian Giles is a founder and director of Hitwise. He can be contacted on 03 8530 2400 or at adrian.giles@hitwise.com.

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