Despite the liquidity troubles banks are facing, online banking traffic is growing rapidly.

From July 2007 through July 2008, online banking traffic increased by approximately 23% for the top 20 banks, according to data published by web analytics company Compete.com and tabulated by BankInnovation.net. Last month, however, people traffic, as Compete.com calls it, fell about 1%.

In all, more than 116.6 million people visited the websites of just the top 20 banks in the nation last month.

Some of the nation’s largest banks have seen booming online activity. PNC Bank’s online traffic made the most notable increase, for example. In July 2007, there were slightly more than 998,000 online visitors to pnc.com; and in July 2008, nearly 1.64 million visited — an increase of 64%.

JP Morgan Chase has also enjoyed big gains, boosting its visit numbers on chase.com to more than 18 million last month from about 13.7 million in July 2007 — a 32.9% increase. Citibank and SunTrust also recorded year-over-year increases in the 30% range.

Given the unstable condition of banks, their negative press, and the overall slowdown in the US economy, why are the top US banks seeing online traffic growth?

Brad Strothkamp, a principal analyst at Forrester Research Inc., says enhancements to online banking services have helped bank internet traffic. “We see so many more consumers researching financial products online along with servicing their accounts these days – a trend we expect to continue. I can tell you that an increase is not surprising.”

Strothkamp says that the increase is significant because the web channel is becoming a better option for financial institutions.

“To give you an example: In 2007, 43% of U.S. online consumers that researched a financial product did so online. That was up from 39% in 2006,” he says. “We see a similar trend in online servicing.”

Mitch Muroff, a former manager at Edgar, Dunn & Co., says that “the negative banking news of recent times relates to the financial position of banks and primarily to mortgage issues.” But the growth in online banking, Muroff says, is related to consumer adoption of online and mobile banking services. These services are separate from the challenges banks are currently facing.

Banks continue to add more advanced online banking features, and consumers become more comfortable using them.

“That alone translates into many more financial services customer coming to the web,” Strothkamp says.