If a new report is any indication, online banking adoptionappears to have reached its limit.

According to Javelin Strategy & Research, findings revealedthat while online banking has “clearly established itself as avitally important self-service channel,” the adoption rate foronline banking has tapered off.

Consumers are also putting the brakes on online bill pay, thereport noted. The Pleasanton, Calif.-based Javelin’s forecasts slowgrowth for viewing and paying bills online through financial institutions and billerwebsites.

While the financial services industry is still convincingconsumers to move away from paper statements, they’re still showingconcerns about the process, the firm discovered.

Big banks have set the precedent for online banking and bill payand mobile banking, putting pressure on smaller institutions,including credit unions, to pick up the pace, Javelin said.

Based on a March 2011 Javelin survey of 5,102 consumers, thereport revealed that 81% of those who managed their householdfinances, banked online at least once in the past 12 months. Thedata showed that this rate is expected to remain flat through 2016,increasing only through population growth.

While online banking adoption rates have leveled, Javelin saidconsumers are more active online bankers. Weekly online banking usehas doubled since 2005, reaching 65% in 2009. The report noted thatthe percentage of consumers who have never banked online has beencut in half, and the Web is consumers’ preferred channel forchecking account balances, transferring funds and paying bills.

The year 2011 has also seen a shift in paperless practices: 37%of consumers receive electronic checking account statements and 35%rely on paper statements, a notable change from 20% compared to 48%in 2008. Twice as many consumers pay their eight most common billsonline as opposed to by mail, Javelin found.

“Consumers have embraced the idea of logging in around the clockto deal with banking chores at their own convenience,” Javelinsaid. “Financial institutions of all sizes have benefited becausethis self-service channel offers opportunities to trim operatingcosts.

Online banking has not only become the primary mode of contactfor profitable customers, but it also has provided a launching padfor mobile banking.”

Among those consumers who are paying bills online, they'retypically paying their mobile phone, student loan, secondary creditcard and store-branded credit card bills at a biller-direct siteand their mortgage, car loan and utility bills through theirfinancial institutions, the data showed. The most popular onlinedestination for a primary credit card payment was a tossup betweenbiller sites and financial institutions.

Still, Javelin predicts that by 2015, paying every bill onlinethrough a financial institution will become a common practice.

Paying bills online may be popular, but weekly use of onlinebill pay has, in fact, declined since 2009 after a jump in usagefrom 2008 to 2009, according to the data. Javelin said its researchshowed that 54% of consumers paid a bill online through theirfinancial institution in a past month during tracked in the survey,while 63% did in 2009. Fifty percent of consumers went online to abiller site to pay a bill during that same month, which was downslightly from 51% in 2009.

“The weekly habit of paying bills online has declined at aworrisome pace – in sharp contrast to online banking, which hasdeepened into a weekly habit for consumers,” the report read.

Javelin statistics showed that online banking and bill paylagged at smaller financial institutions. Compared to 82% ofcustomers at Bank of America, Chase, Citicorp and Wells Fargo, 67%of community bank customers banked online each month.

Still, the report noted that credit unions beat big banks inseveral electronic billing categories. About half of credit unionmembers only receive electronic statements for student and carloans, compared to approximately 35% of large bank customers.Overall, Javelin found members are more likely than consumers tochoose online statements for primary credit cards andmortgages.

Despite the many advances made by financial institutions inonline banking and bill pay, an air of skepticism still existsamong consumers, the report noted. Javelin said before fullysurrendering to online banking and bill pay, consumers want to knowthat the process is secure, that their financial institution willremind them when bills are due and that past payments will bearchived.

“Although turning off paper sounds like a straightforward,on-off decision, it actually requires a gradual behavioral changethat will hinge on a variety of technological upgrades,” the reportread. “To persuade consumers to turn off paper, they must bewilling to change their behaviors when paying bills and managingtheir money.”

Javelin offered financial institutions several recommendationsto help reverse negative trends.

First, upgrade online banking systems and emphasize personalfinancial management capabilities. Second, encourage online billpay by sending reminder messages and tailoring them according tothe degree in which the consumer uses online banking and bill pay.Third, utilize financial alerts and notifications to eliminate theneed for a paper statement as a bill pay reminder. For instance,financial institutions can offer a mobile app that creates a queueof unpaid bills and tracks when they’re scheduled and paid.

Finally, the Javelin report suggested addressing consumers’fears about online bill pay by letting them know it’s convenient,allows them to view past payments, and most significantly, is safeand secure.

“Javelin data repeatedly shows that paper turn-off campaignsrightfully should focus on reducing clutter, 24/7 convenience andhelping the environment,” the firm said. “But these efforts caneasily overshadow a gnawing concern for many Americans: fear ofidentity theft. Financial institutions should spotlight how 24/7monitoring via online and mobile banking can make them safer thanmonthly monitoring of paper statements.”