The financial crisis and the years succeeding it have been pretty tough for the banking industry. And as a consequence of the crisis, it’s not uncommon to hear people slandering their local banks, and to notice how consumers are switching away from traditional banks and into other institutions, like their local credit unions. A lot of our trust in the banking industry has been compromised, no thanks to past bailout stories and the ongoing issues that beset the economy, the government and our financial institutions. 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?
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. Good customer service in the online banking realm can lead to additional, 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 (a 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. Great customer service can lead to additional 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 their online banking presence. 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 (cell phone, tablet, etc.). 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, have wondered how I could have managed to bank at all during the pre-internet age without these valuable tools. Start exploring your bank’s online bill pay functions (I’ve reviewed one bank’s bill pay feature here). This is a must for anyone who seeks flexibility and convenience when paying one’s bills. Electronic bill pay promptly gets your payments to the right place and saves you a trip to the post office. Then, you may want to rave about how wonderful your bank is. The good banks are counting on your satisfaction, after all.
Created May 28, 2010. Updated July 5, 2012. Copyright © 2012 The Digerati Life. All Rights Reserved.