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Online-Only High-Yield Savings Accounts Have Disruptive Impact On Customer Asset Loyalty

Pure Online Banking Customers Are Less Loyal To Financial Institutions

RESTON, VA, December 6, 2005 comScore Networks today released an analysis that revealed an increase in the number of non-loyal customers within the pure online segment of the banking industry. The study found the ease of use of the Internet for conducting financial transactions and the increased competition in the pure online space have fragmented the marketplace.
comScore measured the impact of new entrants into the high-yield business and their disruptive affect on the main players in this space. The study found that despite the impressive growth brought about in the pure online savings business by the Internet due to the increased availability of information, and ease of conducting financial transactions this dislocation could be causing a high rate of customer switching.

Consolidate Student Loans ComScore analyzed the high-yield savings segment as a pure online banking business in order to better understand the impact of online-only players. The analysis found that, on average, 4.3 percent of consumers accessed multiple online high-yield savings accounts in September 2005. In addition, the study revealed that 40 percent of consumers who accessed an EmigrantDirect American Dream Savings Account online also accessed online high-yield savings accounts from at least one other financial institution during the same time period. These findings point to a disparity in consumer loyalty among financial institutions offering high-yield savings accounts.

Savings remain accessible but when cash is withdrawn, so the amount on which interest is payable will increase. This can mean that effectively savings can earn significantly higher rates of interest than if left in a traditional savings account. Standard variable interest rates may be a couple of per cent above savings rates. Income tax is also normally payable on savings interest however this does not apply to savings made on the mortgage. For a higher rate taxpayer offsetting savings against a 6% mortgage product is equivalent to earning 10% on savings.

Home Equity Loans Additional study findings:

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Home Equity Loan Rates The number of unique users accessing online high-yield savings accounts increased by 16 percent from 730,000 unique users in January 2005 to 850,000unique users by October 2005.

Breaking new ground, this service allows customers to book group rates online for the first time. Groups are able to move through their bookings quickly and easily, allowing customers to book more than one car per reservation. When customers book five cars or more their group rate is automatically uploaded and the savings are built in. Best of all, each individual driver can select the car and payment option online.

Homeowner Loans Users accessing online high-yield savings accounts at more than one institution nearly doubled from 2.2 percent in January 2005 to 4.3 percent in September 2005.

One of the most common assets owned by a decedent is an account at a bank or other financial institution, such as a credit union. The decedent may own a variety of different types of accounts held by a financial institution. For example, a decedent may own checking accounts, savings accounts, money market accounts, or IRA (Individual Retirement Account) accounts to name a few of the more common types of accounts.

Equity Loan Rates It is clear the players in the online high-yield savings space have excelled at creating a compelling product for consumers, said Brian Jurutka, director of financial services solutions at comScore Networks. A growing number of consumers are now comfortable moving assets from more traditional savings, checking, and brokerage accounts into these online-only accounts. But online-only companies must be aware that they are attracting a segment of consumers who may not remain loyal once another institution begins offering a higher interest rate.

Customers can change or delete their personal account information by going to the "My Account" section in the site, located in the navigation bar. Questions about accounts can be answered by the Customer Service group. Please send an email with your request to customerservice@altrec.com

Student Consolidation Loans Although ING Direct still enjoys the strongest share as a result of being first-to-market with a high-yield savings product in 2000, competitive pressure has eroded their share of accounts accessed in more recent months. From January to September 2005, a decline of 5.5 percent was noted in the share of INGs online high-yield savings accounts accessed. During the same period, the share of accounts accessed at Capital One and EmigrantDirect grew 60 percent and 100 percent, respectively.

Second Mortgages EmigrantDirect has been aggressively promoting some of the highest interest rates in the country for online high-yield savings accounts since late last year. Although they have grown their deposits significantly, the percent of EmigrantDirect customers who accessed their American Dream Savings Account in October 2005 and who also accessed another institutions online high-yield savings account was nearly ten times the industry average, said Jurutka. The degree to which consumers have opened high-yield savings accounts online demonstrates their rate sensitivity, and this research shows EmigrantDirect customers are willing to switch online high-yield savings accounts for even higher rates.

Federal Consolidation Loan Banking industry professionals and members of the media seeking additional information may contact comScore Networks by sending an e-mail to banking@comscore.com.

Equity Loan About comScore Networks

Refinancing With Bad Credit ComScore Networks provides unparalleled insight into consumer behavior and attitudes. This capability is based on a massive, global cross-section of more than 2 million consumers who have given comScore explicit permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing. comScore panelists also participate in survey research that captures and integrates their attitudes and intentions. Through its proprietary technology, comScore measures what matters across a broad spectrum of behavior and attitudes. comScore consultants apply this deep knowledge of customers and competitors to help clients design powerful marketing strategies and tactics that deliver superior ROI. comScore services are used by global leaders such as AOL, Microsoft, Yahoo!, Verizon, Best Buy, The Newspaper Association of America, Tribune Interactive, ESPN, Nestl, MBNA, Universal McCann, the United States Postal Service, Merck and Orbitz. For more information, please visit www.comscore.com.

Home Equity Line Of Credit Source: Comscore

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