Online Banking Today

by Mercator Advisory Group 0

By Bob Landry, VP,Customer-Centric Delivery Channels

The online banking channel is ata turning point. The channel has achieved significant adoption, butgrowth has slowed from 27 percent in the first six years of thisdecade to just six percent now. To some extent, the growth ofonline banking is limited by internet access and customer comfortwith using internet applications as part of their everydayactivities. Over time this will clearly improve as 93 percent ofadults ages 18-29 have internet access compared with just 38percent for adults 65 and older. Banks have worked hard to attractand keep customers using their web sites and now achieve highlevels of customer satisfaction. Retail banks now have satisfactionscores higher than the top 100 retailers, who previously set thesatisfaction standard.

Online banking is clearly the channel of the future. Thedemographics of internet adoption and usage are driving nearuniversal access and integration into the lifestyles of young andold alike. Fifteen years after its initial deployment, onlinebanking stands at the same level of adoption achieved by the ATM inits first 20 years of existence.

Discussion Points:

  • Banks have been investing heavily in the onlineexperience and have dramatically increased their online customersatisfaction scores over the past ten years. Banks now outperformonline retailers – once considered the gold standard for qualityonline experiences.

  • Banks are executing a number of initiatives that areincreasing online banking adoption, access, usage, and relationshipdepth. Continuing to promote online banking capabilities at everyopportunity is essential for success and, when successful, onlinebanking creates additional “impressions” that enhance brand andcross-selling effectiveness.

  • Mobile banking is an essential ingredient to an onlinebanking strategy and broadens access, increases usage, and providesa platform for innovative products and services in thefuture.

  • Banks need to expand the capability of their onlinebanking solutions to increase usage and deepen the customerrelationships. In addition to offering mobile banking, banks needto expand their EBPP capabilities with eBills, provide easy to use”lite” personal financial management solutions, and add consumercheck image capture to capabilities.

While the promise is clear,banks must continue to promote online banking to increase adoption,expand access with mobile banking, and increase usage by adding newcapabilities. Those banks that continue to execute an aggressiveonline banking strategy will not only reduce costs, they will alsobe the choice of the next generation of consumers who haveintegrated the internet into their lifestyle. They will naturallygravitate to the banks that meet them where they work and play -online.