Retail Internet Banking Vendors: Luring the Laggards

by Bob Meara, March 5, 2007


San Francisco, CA, USA March 5, 2007

Online banking has reached the milestone of 40% of households, but attracting additional users will be a challenge.

Banks are under intense pressure to attract and retain online banking customers. Over the past five years online banking household adoption had consistent year over year double-digit growth, averaging 15%, but Celent predicts that in the next few years, average household penetration growth rates will drop to the single digits. Less growth in online banking will make it more challenging for banks to attract the remaining half of banked households that still do not banks online. In the report, , Celent explores the new technology that will help banks meet the challenge.

Banks have challenged vendors to offer applications that can help expand penetration and generate higher retention -- sophisticated interface technologies, new security features, advanced customization options, fully integrated payment and personal financial management capabilities -- anything and everything that will help "lure the laggards." Vendors have responded to these challenges, in some cases consolidating, in other cases offering some of the most integrated combinations of bill payment, online banking and core system integration the industry has seen to date.

This report examines the offerings of nine vendors and introduces Celent's ABCD framework for analyzing vendors. The framework has four categories: advanced technology, breadth of end-user features, customer base, and depth of client services. The vendors are Corillian, Digital Insight, Fidelity Information Services, Financial Fusion, Fiserv, Metavante, Online Resources, Open Solutions, and S1.

Across all four categories, Corillian stands out as the clear leader, followed by Digital Insight. Metavante, a low performer in Celent's 2005 report, has significantly revamped its retail platform and has performed exceedingly well registering third overall. Online Resources, Fiserv, and S1 Personal Banking also received relatively strong grades.

Dan Schatt, coauthor of the report and senior analyst at Celent, says, "We are well past the early adopter phases of Internet banking, and the drivers behind the next wave of adoption will be deep integration, usability, and security. Many online banking vendors and banks have recognized this trend and are well on their way to offerings that will generate significant interest for the next wave of adopters."

"One surprise from this research has been the ascent of core system processors in our rankings, blowing the stereotype that the best solutions are from monoline vendors. This time, two of the three top ranking vendors are core processors, Metavante and Fiserv ITI," says Bob Meara, coauthor of the report and senior analyst at Celent.

A table of contents is available online.

Members of Celent's Retail Banking research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

San Francisco, CA, USA March 5, 2007


Executive Summary 3
Gearing Up for Adoption 5
  Matching Trust and Convenience 6
  Beyond Single Sign-On 8
  Usability and Web 2.0 11
Areas Moving the Needle Today 13
  Weighing in on PFM Lite 13
  Administrative Controls 15
  Self-Service Tools 16
Taxonomy of Vendors 18
Celent's ABCD Vendor Analysis 21
  Advanced Technology 23
  Breadth of Features 24
  Customer Base 25
  Depth of Services 26
Vendor Profiles 28
Midsize to Large Bank Providers 28
  Corillian 28
  Financial Fusion 30
  S1 32
ASP-Focused Purveyors 35
  Digital Insight 36
  Online Resources 38
Core Processors 39
  Fidelity Information Services 40
  Fiserv 41
  Metavante 43
  Open Solutions 45
Future Trends 50
Objectivity and Methodology 51

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