It pays for online banks to deploy effective customer relationship strategies since satisfied consumers are 50 percent more likely to recommend their bank’s Web site and 19 percent more likely to purchase additional services, according to a Summer 2003 study by ForeSee Results and Forbes.com. Also, one-quarter of online banking customers said a bad experience on the site would negatively impact their relationship with the bank.
“The sooner banks learn to measure and manage customer satisfaction on their own Web sites, the faster the benefits will accrue,” said ForeSee Results CEO Larry Freed. “Banks can use this insight to guide their online investments to areas that will generate the highest return.”
Value-added services — such as online bill payment — prompts customers to visit the site more often. More than half (51 percent) of online bill paying customers visit their bank’s Web site on a daily basis, while 39 percent visit at least once per week. The daily traffic drops to roughly half (27 percent) for online banking customers without the online bill payment service, and 56 percent visit at least once a week.
Online banking in the ForeSee Results/Forbes.com survey registered a score of 73 on the American Customer Satisfaction Index (ACSI) 100-point scale. Comparatively, retail and commercial banks each scored a point higher at 74, and online retail topped the index at 83.
“While online retailers are finally figuring it out and starting to get profitable, banks are asleep at the wheel. Not only are banks losing an opportunity to sell more services to current customers online and offline, they are making it more difficult for themselves to attract new customers to their most profitable channel,” said Freed.
The study also noted that more than 28 percent of respondents get most of their information about online banking from the Web, 15 percent get information from their bank branch and 14 percent get information from their bank statements. Only 7 percent of respondents get information about online banking from conventional advertising sources like newspapers, 5 percent from television, and only 1 percent from radio.
“Despite the recent growth in online banking, if it were even close to meeting expectations, you would see higher satisfaction scores for Web banking than traditional banking, especially from busier, savvier, wealthier consumers like Forbes.com readers,” said Freed. “The Web is supposed to do a better job of conveniently meeting people’s needs. There’s still a long way to go if online banking really expects to outpace other channels.”
April 2003 analysis from TowerGroup cites security concerns as the primary reason for not using online banking, followed by a lack of comfort with the electronic medium.
“Online banking adoption has stalled because consumers are still concerned about security, despite the fact that e-security measures in place at most financial institutions are really very good,” said George Tubin, a senior analyst in the TowerGroup.
|Primary Reason for Not Using Online Banking, U.S.|
|Concerned about security||26%|
|Not comfortable conducting banking business online||22%|
|Concerned about privacy||6%|
|Not offered by current financial institution||5%|
|Not sure how to use it||5%|