[June 11, 2006] Data security worries dimming outlook for online banking Tweet (The Kiplinger Letter Via Thomson Dialog NewsEdge)Data security worries are dimming the outlook for online banking. Growth will slow to single digits, with the number of households banking on the Web increasing by less than a fourth from now to 2010. Market saturation is clearly part of the problem. In recent years, a big uptick in American households with broadband communications capacity sent online-banking numbers soaring. They tripled between 2001 and 2005. Still, 75% of Danish, Dutch and German banking customers do at least half of their banking online. In the U.S., just 38% of customers bank online. Ebbing consumer faith is also playing a role: From 2003 to 2005, the share of consumers who expressed strong confidence in the security of online financial transactions dropped from 70% to less than 60%. One reason: "Phishing" and other Web-based scams target bank customers. Another: Consumers want extra security protections for their nest eggs. Such concerns apparently don't daunt Internet shoppers. Online retail sales are expected to slow but remain near 20% a year. [ Back To TMCnet.com's Homepage ]