Many consumers are demanding that online banking increase its Web presence, and the trend seems due, at least in part, to customer dissatisfaction with their brick-and-mortar bank experiences.
Some traditional banks now charge customers a fee to approach a teller window for transactions, and another fee to do business on an ATM machine. However, despite the fact that “service” fees have proliferated, the actual quality of service has declined.
This disconnect has not been lost upon major Internet players, including Sony Corporation, which plans to launch online banking services in Japan during the first quarter of 2001. Sony’s online bank will offer full service consumer banking, including deposits, mortgages, asset management services and online checking accounts.
What Users Want
A recent study by eFunds, an electronic funds transfer service owned by Deluxe Corporation, found that online banking is perceived by users to be a convenient and desirable service. Consider:
Of the 444 people surveyed, 80 percent of American consumers polled said that their online banking experience was better than their traditional banking experience.
More than 80 percent said that they are likely to use a service to transfer funds electronically to an online account from other financial institutions.
90 percent of those surveyed have online accounts and traditional offline accounts. Seven percent have accounts at banks exclusively on the Internet. Additionally, consumers like the ability to check account balances and pay bills online at any hour of the day.
A Matter Of Trust
Still, some users are wary of online banking for security reasons. More than 90 percent of respondents said that they are uncomfortable about revealing personal information such as social security numbers on the Internet.
Additionally, some that do trust Internet security find the process of opening electronic accounts to be frustrating. 20 percent said that they began to open a checking account online but gave up after finding how much paperwork was involved. Some institutions required the users to mail or fax forms, thereby preventing them from completing the account registration online.
Need For Speed
Internet users of all types consistently express the desire for speed, efficiency and convenience, and online banking is no exception.
If online banks are able to streamline the process of establishing new accounts, it will likely result in a win/win situation for the institutions as well as for the customers. Low operating costs should enable online banks to offer attractive interest rates on deposits, as well as service charges that are significantly lower than those from brick and mortar banks.
In fact, another survey conducted by PSI Global, already projects that 20 percent of U.S. households will bank online within two years.