Let the Numbers Do the Talking

Every day, bankers get bombarded by statistics and grand predictions of the latest hot technology. Some of these “hot” ideas, like interactive television and “push” technology, never seem to pan out. Others, like the World Wide Web, seem to come out of nowhere.

For bankers and bank technologists, it’s important to put every number we hear into perspective. Statistics quoted in the “thousands” and “millions” tend to exaggerate the impact of a technology. Therefore, I have scoured the Net and research journals to provide Gonzo readers with a quick scan of how folks are really using new technology and delivery channels. The figures have been listed in descending order, starting with the fact that there are twice as many credit cards as people in the United States. Here goes:

• 528 million – Number of major U.S. credit cards in circulation
• 270 million – Population of the United States
• 180 million – Worldwide users of Yahoo
• 135 million – Number of U.S. Internet users
• 126 million – Number of U.S. e-mail users
• 105 million – Total U.S. households
• 98 million – Number of debit cards in circulation
• 81 million – U.S. Internet users who shop online
• 79 million – Number of Web pages containing the word “sex”
• 60 million – U.S. households with PCs
• 53 million – U.S. households with mobile phones
• 50 million – U.S. Households with Internet access
• 42 million – Number of Americans filing tax returns electronically
• 35 million – Smart cards issued in France
• 32 million – Number of Web pages containing the word “love”
• 29 million – Number of forecast M (mobile) Commerce users by 2004
• 27 million – Current America Online subscribers
• 25 million – Online banking households forecast by 2003
• 20 million – Online brokerage households forecast by 2003
• 20 million – Worldwide users of DeCoMo’s I-Mode service
• 19 million – Registered users on eBay
• 19 million – Web pages containing the word “God”
• 15 million – Current Internet banking households in the U.S.
• 15 million – Web pages containing the word “bank”
• 13 million – Current U.S. households with digital cameras
• 8 million – Users of wireless financial services forecast by 2003
• 7 million – Current number of U.S. online brokerage users
• 7 million – Current U.S. households with broadband Internet access
• 5 million – Current number of U.S. wireless Internet users
• 5 million – Number of consumers who shop for insurance online
• 4 million – Number of bill payment users in the United States
• 3 million – Number of consumers who applied for a loan online
• 3 million – Account aggregation users forecast by 2003
• 2.5 million – Number of insurance agents in the U.S.
• 1 million – Number of account aggregation users today
• <1 million - Active smart cards in the U.S.
• <500,000 - Number of wireless financial services users today
• 500,000 – Number of tellers in the U.S.
• 10,000 – Number of current M Commerce users in the U.S.
• 275 – Companies doing bill presentment through Checkfree

When prioritizing our strategies and initiatives, it’s important that we keep these types of relative numbers in mind.

E-mail and mobile phones are two simple technologies that continue to explode in usage. E-mail will definitely turn out to be the “killer app” for wireless Internet. Electronic tax filing also appears to be a focused, simple application that has a clear benefit (get my money faster!).

Online brokerage shows steady growth that banks should fear, even with the recent stock market fallout.

Online banking growth is explosive, but it still will only be used by 25% of all U.S. households in 2003. Meanwhile, there will soon be 100 million debit cards in U.S. consumers’ hands.

New buzzing technologies like wireless Internet, broadband, account aggregation and smart cards still represent such a very small portion of the population. Bill payment is just plain stuck in the mud.

There are almost as many insurance agents in the United States today as there are online insurance customers. There are more bank tellers today than wireless banking users.

Other interesting numbers to me were:

1. the large penetration of Yahoo as a worldwide consumer brand
2. eBay’s huge member base that is driving P2P growth
3. the fact that I-mode, the Japanese mobile commerce giant, has 20 million users without any U.S. penetration to date. The I-mode/AT&T joint venture will be interesting to watch as a potential jump start to M Commerce, if it ever turns out to be as big as predicted
4. the fact that 81 million Americans now shop confidently online without any new secure form of Internet payments emerging. Growing fraud may undermine this confidence over the next few years.
5. It’s sad but entirely believable to see that mentions of sex on the Net overwhelm references to love, God and (how could it be?) banks.

There are many lessons to learn by tracking “big picture” technology usage numbers like these. Bankers should use this type of research with senior managers and the board to set technology priorities and determine when to jump headfirst into a new technology. The key is not being too late or too early to the new technology party. -sw