UK retail banks are failing to maximise
the potential of the online banking channel, despite the increase
in popularity of the online platform, according to a consumer
survey from telecoms firm Cable&Wireless.
The report found that 60% of respondents
said that their bank’s online offering had become increasingly
important to them in the past two years, ranking it higher in
importance than banks’ trustworthiness, interest rates and bank
charges.
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Only 9% of consumers surveyed mentioned
in-branch facilities as having become of increased importance over
the same period; branch opening hours (mentioned by 16%) and branch
locations (21%) also polled relatively low scores.
Entitled ‘Banking 20/20, The Customer
Journey Research Report’, the survey was commissioned by Cable
& Wireless from pollsters YouGov.
The report looks at ‘The Customer
Journey’: the when, where and what of customer decisions on whether
to buy a financial product or to do business with a particular
institution, and the related issues of trust, loyalty and
satisfaction.
Missing a
trick
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By GlobalDataThe survey concludes that banks are
missing a trick due to the internet channel typically delivering
only functional banking services.
Lenders are failing to appreciate that
around one-half of customers want banks to incorporate social and
human aspects of customer service – such as more personalised
customer service and tailored advice – into online
banking.
Furthermore, the use of new technologies
such as mobile technology, social networking and video conferencing
offers banks a currently untapped opportunity to increase contact
with the customer.
Customers are not using these newer
communications channels for buying products, but rather as channels
for gleaning advice and information.
Only 1% of consumers, who have sought
advice from banks in the last month, have done so through video
conferencing.
Mobile phone applications (1%) and social
networking (1%) are of similarly low incidence.
Michele Metcalfe, director of banking
& financial services at Cable&Wireless Worldwide,
said:
“Consumers increasingly prefer remote
interaction, but also want good customer service, greater
trustworthiness and a fair level of engagement with the banks.
These findings suggest that financial institutions have an
opportunity to better meet customer preferences by investing in the
right online innovation.”
Account switching
intentions
The report also examines current account
switching intentions. It argues that new bank entrants will
struggle to establish a foothold in the market.
Habit and inertia will make it hard for
new banking providers such as Metro Bank to establish a significant
share of the UK banking market.
Customers remain cool or lukewarm at best
towards these new entrants, with their preference being for new
banks backed by strong, established brand names like Tesco or
Virgin.
According to Metcalfe, a fundamental
problem is that for new banks to succeed they must outperform
current providers across the board, and in particular must have a
better product offer.
But most new entrants are aiming to
compete only on a range of services such as longer opening times,
faster application processes, in-branch facilities and ethical
operation.
This ignores the need to offer products
that are better value for money, cheaper, and more fully featured
than those already on the market.
