Competition for Banking Customers Intensifies Among Top U.S. Online Banks

Tight Economy and Banking Crisis Force Online Banking Industry to Seek More Creative and Cost Efficient Marketing Strategies

RESTON, VA, January 22, 2009 – Comscore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released a study of the U.S. online banking industry, which found that the weak economy’s impact on consumer finances combined with the banking crisis have made it increasingly challenging for banks to attract new customers and cross-sell to existing clients. The study findings will be discussed in greater detail during a Comscore webinar presentation on Tuesday, January 27 at 2:00 PM ET/11:00 AM PT (webinar details below).

“Increased joblessness, the credit crisis and the overall poor health of the U.S. economy have taken their toll on consumers and their bank accounts,” said Marc Trudeau, senior director, Financial Services, Comscore, Inc. “Americans have less cash, are spending less and have experienced a significant decline in the value of their assets. As a result, we’re seeing shifts in the way consumers manage their finances online, such as less frequent and shorter visits to their banking Web site, which has significant implications for marketers trying to reach new and existing customers.”

In general, engagement at many of the top banking sites declined in Q3 2008 versus a year ago. Four out of the top 5 online banking sites experienced declines in the average number of minutes spent per visitor in the third quarter of 2008 versus year ago, with Wachovia down 12 percent and JP Morgan Chase down 8 percent.

* Liquid deposit account (LDA) customers are customers that accessed a checking, savings, or money market account at the financial institution during the time period.
**Top 5 online U.S. banking sites ranked by the number of LDA customers at the financial institution in Q3 2008; data reports entities independent of recent bank mergers.

For marketers in this industry who have relied on engaged visits from customers to build loyalty and to cross-sell additional products and services, this decrease in time spent per site visit creates a significant marketing challenge in attracting consumers’ time and attention. This is compounded by the ongoing banking crisis, which is causing a significant tightening in banks’ marketing budgets at a time when consumers’ confidence in their banks is being tested. While presenting a challenge for some, it is also an opportunity for competitors to target and acquire customers seeking a safe haven for their diminished assets.

Competition Intensifies as the Industry Consolidates

With many of the recent bank mergers – including big industry players like JP Morgan Chase and WaMu and Wells Fargo and Wachovia – the U.S. banking landscape is being altered dramatically. In the third quarter of 2007, the top three online banks accounted for nearly 60 percent of all of the customers of the top 10 online banks. After accounting for the impact of these bank mergers, however, the top three banks increased their share to 80 percent.

* Liquid deposit account (LDA) customers are customers that accessed a checking, savings, or money market account at the financial institution during the time period.
**Top 10 online U.S. banking sites ranked by the number of LDA customers at the financial institution during the given time period.
***Data represents shifts that will occur as a result of the implementation of the merged firms, including the Wells Fargo and Wachovia merger, which occurred in October 2008; note: Q4 2008 data is not yet publically available.

This new competitive landscape, along with banks’ thirst for capital in today’s economic environment, has prompted many to adjust their marketing budgets and their strategies. Larger banks are launching aggressive customer-acquisition campaigns, offering significant monetary incentives, often in the amount of $75, $100 and even $200, to customers willing to open an account with the bank.

“In this time of uncertainty and change in the industry, many of these firms, regardless of their marketing strategies or business objectives, are turning to the Internet,” said Trudeau. “They realize this medium provides a more cost effective, efficient and flexible channel than the traditional bank branch, and represents a way in which they can more efficiently and effectively reach their target audience and communicate their distinct value proposition.”

Comscore will highlight additional study results and share case examples of the ways banks are using the online channel during a live webinar entitled “Comscore’s State of Online Banking” onTuesday, January 27 at 2:00 PM ET/ 11:00 AM PT. To register for the webinar, please visit:https://www1.gotomeeting.com/register/797740056.

About Comscore
Comscore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. For more information, please visit www.comscore.com/companyinfo.