The last couple of years have been pretty tough for the banking industry. These days, it’s not uncommon to hear people slandering their local banks, and to notice how consumers are switching away from banking and into other institutions, like their local credit unions. A lot of our trust in the banking industry has been compromised, no thanks to recent bailout stories and the financial crisis. But there are still good banks out there that want to remain on your good side. I’ve seen a few of them expanding handily into the online banking realm — ever wonder why so many of them are jumping into the web world full force? Just take a look at this list of top online bank accounts.
There are a few strong reasons for why internet banking has grown so quickly:
1. Online banks are cheaper to run. Online banks have lower costs than their brick and mortar counterparts, and many times, banks pass on the savings they incur to their customers in the form of higher savings account rates and lower fees.
2. An online presence is needed for any business to keep up with the times.
3. Banks can get more business through their internet banking customers. Apparently, good customer service in the online banking realm can lead to improved business prospects for a bank.
That final point was the premise behind a customer satisfaction analysis study made by Forbes.com and ForeSee Results (some company that measures this sort of thing). I decided to take a closer look at this.
The Importance of Customer Satisfaction Ratings At Internet Banks
Most of us appreciate online banking because it makes keeping up with our account balances, paying bills, and keeping our personal information up to date a breeze. And maybe this is one aspect of the banking industry that people may still hold some positive regard for. According to the ForeSee & Forbes.com study, online experience and overall satisfaction levels actually predict our future behavior towards our banks. I thought it was interesting that the web experience had this kind of influence on a bank’s overall business.
Statistical models have shown that if we are satisfied with our online banking experience, we are more likely to be satisfied with our overall relationship with our banks and we’d be more likely to keep an exclusive relationship with our financial agents. A better online experience leads to happier customers who tend to do more business with their banks plus share that positive experience with others they know. Here are some of the numbers that came out of the study:
1. Satisfied customers are 65% more likely than unsatisfied customers to open additional accounts, take out new loans or order other products and services from their banks. Talk about some revenue generation.
2. Satisfied customers are more likely to use online services in lieu of branches or call centers to carry out day-to-day business or to resolve an issue, thus reducing the costs to the bank.
3. Satisfied customers are more likely to spread the word, providing free advertising to the bank.
4. Satisfied customers are less likely to leave a bank. A good online experience leads to improved customer retention.
I didn’t realize just how big an impact online banking is to the overall health of a regular bank. Small wonder these sites are sprouting up everywhere (just check out our Everbank review and Ally Bank review for examples of such sites). Whether or not this is news to you, our banks and credit unions are pretty much aware of these things already. That’s why we’ve been seeing a huge dynamic shift away from more traditional banking services and more emphasis being placed on bank websites. Our banks are looking to earn your trust and loyalty through your cyber-experience (even as they experience the many other benefits of having an internet presence).
What About Those Mobile Applications For Banking?
Mobile apps are a relatively new product that many banks are introducing into the marketplace with the high hopes of expanding that online banking mojo. The problem with these applications is that they are simply not being received as favorably.
97% of respondents to the ForeSee report have access to a mobile communications device — or cell phone, as us simpletons like to call it. But only 57% of these folks have the Internet access required to perform mobile banking functions, and even fewer realize that this is an option at all. Still, almost half of the people that have mobile Internet access have used their phones to conduct banking business. Maybe with some more word of mouth, these apps can become more popular.
Okay, so what do you do now? If you aren’t already a card carrying member of the online banking club, go to your bank’s website and check it out. You have no idea what you’re missing. I, for one, wonder how my parents banked at all without these valuable tools. Start exploring your bank’s online bill pay function. This is a must for anyone who needs to pay bills at midnight in order to fit it in during the day. Electronic bill pay gets your payments to the right place at the right time and saves you a trip to the post office and around town. Then, you may want to rave about how wonderful your bank is. They are counting on you, after all. 
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{ 3 comments… read them below or add one }
I have a savings account at Ally bank and also ING. I prefer ING, the website seems a little more user friendly.
I have a checking account at Bank of the Internet. I have been please with it. The bill pay interface is easy to master and they have decent customer service.
Thanks for the informative post. I personally use a mix of online bank, traditional bank and credit union to meet all of my needs. I must admit customer service is very important to me. I have personally closed longstanding accounts due to a major issue I encountered with the customer service I received in the past.
Good customer service is an important factor to take into account when selecting a bank. Banks that place an emphasis on service clearly value the customer experience. Superior service can also have a direct impact on your savings and ultimately your bottom line. I agree that a customer’s satisfaction needs to be given attention by financial companies.