US consumers are 10% more likely to have used online banking than visited an ATM in the last month, a report by Celent reveals. The report, published in October, provides an insight into multi-channel banking, revealing how usage breaks down across age groups. Ellie Chambers takes a closer look at the findings
The report, Raising the Bar in Multichannel Banking, by Celent, identifies a number of trends in channel usage. One of the ways it does this is through an online survey of 1,000 US consumers over the age of 18.
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One of the headline statistics is that 79% of consumers had used online banking in the past month, while 69% had visited an ATM and 68% had gone into a branch. 33% had used mobile banking, 26% had banked over the phone and 17% had used a telephone banking service. Consumers are shown to be slow to adopt social media banking, with only 1% having used it in the last month.
Results are driven partly by age and device ownership – 33% of all the respondents had used mobile banking in the past month, but this was skewed strongly towards the younger age groups, with 59% of 18-29s and 51% of 30-44s having used mobile banking, while only 27% of 45-60 year olds and 16% of over 60s had used mobile banking.
76% of consumers between 18 and 44 owned a smartphone compared to just 41% of those over 60, although smartphone ownership was found to be growing across all age groups. Celent predicts that mobile banking will overtake online banking within the next few years.
Interestingly, tablet ownership was not strongly linked to age, with only 31% of 18-29 year olds owning tablets, compared to 43% of 30-44s, 37% of 45-60s and 36% of over 60s.
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By GlobalDataThe survey also shows that 18-29 year olds are the least likely to be satisfied with their banks and most likely to switch. Satisfaction with banks seemed to grow with age – only 28% of 18-29s were completely satisfied, compared to 29% 30-44s, 32% 45-60s and 41%of over 60s.
12% of 18-29 year olds had switched banks in the past year, while the figures were 8%, 6% and 4% respectively for 30-44s, 45-60s and over 60s.
The report also contains results of a survey of banks conducted in July 2012. Results show that by then, mobile banking was already nearly ubiquitous in the US, with 83% of responding financial institutions having some kind of mobile capability.
62% of institutions had apps compatible with iOS and 59% with Android but only 39% had a downloadable Blackberry app.
The Celent survey shows that few but the larger banks had more than the most basic capabilities in mobile banking. For instance, 82% of banks with assets of over $50bn had SMS alerts, whereas only 57% and 62% respectively of banks with between $1bn and $50bn and banks with less than $1bn had SMS alerts.
In the same Celent survey of July 2012, the responding banks identify mobile banking channel development and multi-channel delivery as the top two priorities in terms of retail banking technologies. 84% of banks chose mobile banking channel development as one of the top two priorities, while 80% multi-channel delivery.
Celent says banks prioritised these two technologies "wisely", but that identifying digital banking as a top priority is not enough in itself without banks focussing in on which particular capabilities they need to develop.
The report states that banks are currently not doing enough to differentiate themselves in terms of multi-channel and suggests that digital channels should no longer be seen as a way to cut costs by migrating transactions to self service channels, but that they must be seen as revenue-creating channels in their own right.
Celent goes on to identify some banks that have made good use of digital channels to drive revenue rather than simply cutting costs. Among the case studies are BMO, Capital One, Isracard, University Federal Credit Union and US Bank.
BMO is praised as a bank that has uses digital channels to drive revenue – in May 2012 the bank launched online appointment booking, allowing customers to book appointments in real time directly into employee’s calendars. Customers will be able to do the same from mobile devices by the end of 2013.
Meanwhile, Capital One’s mobile platform integrates reward schemes and University Federal Credit Union’s remodelled branch channel, with a new emphasis on self service, saved the credit union $400,000 in the six months following its 2012 launch.
But Celent saves the highest praise for US Bank, saying the bank has rebuilt its public facing web presence to use digital channels as key distribution and marketing vehicles, in a digital overhaul that few other banks have even grasped the need for.
