Banks Face Unfavorable Charges

[Toronto, CANADA] Certain to ruffle the feathers of today’s self-proclaimed tech-savvy financial
institutions, Internet quality measurement firm Gomez has released a study
charging Canadian banks with “failing to meet the needs of their online banking
customers.”

Part-anathema, part-revelation, the study examined the online banking trends and
market dynamics of almost 9,000 online adult users across Canada. Dubbed The
State of Online Banking study, the project revealed that banks are achieving an
extremely low penetration rate for online transactions. Only one percent of
respondents reported having obtained mortgages online, 2.4 percent of
respondents reported they had applied for a loan online, and only 2.1 percent
said they had purchased a GIC (Guaranteed Investment Contract) online.

“The study shows that a surprising number of institutions still require
physical-world activities to fulfill certain basic requirements that could be more
efficiently handled over the Internet,” said Don Rolfe, managing director for
GomezCanada. “Banks will need to offer innovative features, increased breadth
of products, pricing advantages, and higher customer service levels, in order to
give their customers a compelling reason to move their banking relationships
online.”

A majority of those surveyed – 54.9 percent – used the Internet to view account
balances, while 44 percent had paid bills online and 38.5 percent has used the
Internet to transfer funds. Fifteen percent said they had applied online for a credit
card, and seven percent had used those cards for online purchases.

The state of online banking in Canada received a far more favorable spin in the
week-old Banking Services Delivery Study, conducted by Canadian Facts, a
division of CF Group Inc. The study revealed that two in ten Canadians are
signed up for Internet banking, double the number from a year ago. And those
who are registered for the service use it frequently. Six in ten (59 percent) report
clicking on their account at least once a week. And three-quarters (77 percent)
say they usually bank online at least once a month.

“Compared to other methods of banking, Internet banking has seen the biggest
jump in usage over the past year,” said Rhonda Grunier, senior research director
of Canadian Facts.

Spin aside, all agree that now is the time for banks to offer the products and
services needed to compel customers to switch from tellers to online
transactions.

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