Report: Are Online Banks' Days Numbered? - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Report: Are Online Banks' Days Numbered?

In the race for online survival in the financial services arena, traditional banks with online channels will stay in business longer and acquire more customers than online-only banks, brokerages, and insurance companies, according to a recent report by IT services firm Extraprise.

In predicting the future of the online financial service market for consumers, the report, "The E-Financial Services Shakeout," predicts that financial institutions operating strictly online eventually will fold or become acquisition targets. That's because people tend to be more familiar with the offline presence of traditional banks, says David Hybels, an Extraprise adviser who co-authored the report. Adding an online channel, Hybels says, gives people another way to access accounts opened in the offline world.

The picture for the online-only banks is not nearly so rosy. "They're not going to survive," Hybels says. "People need advice and the security of a physical branch." Even partnering with brick-and-mortar companies, as Internet-based Juniper Bank did with Mail Boxes Etc., may not result in sufficient staying power. According to the report, "Consumers might find it awkward to bank at Mail Boxes Etc."

Extraprise predicts there will be a shakeout among online financial services companies, and that only a few of the larger, diversified firms with a physical component will survive.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
Slideshows
IT Careers: 10 Industries with Job Openings Right Now
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/27/2020
Commentary
How 5G Rollout May Benefit Businesses More than Consumers
Joao-Pierre S. Ruth, Senior Writer,  5/21/2020
News
IT Leadership in Education: Getting Online School Right
Jessica Davis, Senior Editor, Enterprise Apps,  5/20/2020
Register for InformationWeek Newsletters
Video
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll