Internet banking continues to win over Canadians, and it appears to be taking its toll on phone banking, according to an annual marketing research study conducted by NFO CFgroup.

In 2002, one-quarter of Canadian adults surveyed made an Internet banking transaction in the month prior to the interview, up from 19% in 2001. Meanwhile, past month phone-banking usage fell for the first time since tracking began in 1994, from 26 per cent in 2001 to 22% last year.

“While online and phone banking allow consumers to do similar sorts of transactions with 24/7 access, the visual medium of the Internet makes online banking easier to use. And, with just a mouse click, consumers have access to a wealth of financial information on the bank’s Web site,” said Rhonda Grunier, vice-president of NFO CFgroup and author of the How Canadians Bank study. “A few years ago, more than half of people who had signed up for Internet banking started out as phone banking users. Today, a growing number are adopting the Internet banking channel directly.”

Overall, three in ten Canadians — 31% — were signed up for online banking in 2002, up from 24% in 2001 and 20% in 2000. And nearly half of Canadians with Internet access at home were signed up to bank online in 2002 — 47% — up from 40% in 2001.

While Canadians are increasingly handling many of their financial transactions electronically, the majority continue to deal with their financial institution at the branch level. In 2002, 61% reported visiting a branch in the past month to conduct a transaction with a teller or other branch staff, up slightly from 58% in 2001. This small increase may signal the end of the downward trend in branch banking that has been consistently tracked over the past eight years.

“The branch will continue to play an important role in the delivery of banking services,” said Grunier. “Consumers want to have a choice of how they conduct their transactions. For the banks, personal contact can help to strengthen the relationship with the customer.”

Banking machines continue to be the most popular channel for conducting transactions, with 78% having used one in the past month. After years of steady growth, however, ABM usage appears now to have plateaued.

Canadians continue to have a strong preference to withdraw cash from ABMs rather than at the branch. The self-service machines have surpassed branches as the preferred means of depositing cash and cheques and transferring funds between accounts.

Canadians are increasingly going online to deal with their bills. In 2002, 21% paid a bill through an online banking service, up from 16% in 2001. Also, a small, but growing number of Canadians are using electronic bill presentment services, which allow users to view, pay, and store their bills on a computer, instead of receiving them in the mail. Currently, 6% of adults make use of this service, up from 4% in 2001.

For the study, NFO CFgroup interviewed a nationally representative sample of Canadian adults 18 years of age and older. A total of 1,998 telephone interviews were conducted between October 2 and 24, 2002. The survey results are considered accurate to within 2.2 percentage points, 19 times out of 20.