Online Banking trends
banking institutions in the region are becoming increasingly aware of the benefits of Online banking, leading to the adoption of a fully functional and integrated online channel


Online banking has taken off. Most of the banking institutions in the region now have a fully functioning and integrated online channel. However, there are still a few that have not embraced this technology. Those financial institutions who have adopted online banking practices have done so because it enhances the customer experience, and it is convenient.

As market observers, we have seen five trends in the online banking space which banks should consider:

Leading trends
Security concerns are of major importance to online consumers. This is understandable but is also a very general insight. Firms with online activities will therefore have to deal with the matter in a more differentiated way. Those who are concerned about security have identified the lack of staff awareness as the most dangerous threat followed by those from viruses, Trojan horses, and worms.

This holds true for all sectors. The financial industry, however, is particularly sensitive to the topic. The fear of a lack of security is a greater hurdle to those Internet users who do not use online banking, than missing monetary incentives or insufficient comfort or functionality. Customer retention becomes ever more important. Research shows that the more services a customer uses, the higher the real and psychological switching costs will be. Also, the more services a customer uses, the greater are the bank’s expected profits. Customer loyalty, therefore, gains precedence over customer acquisition, and the value of customer relationship management becomes apparent.

Technological progress will give a boost to existing online banking services and devices. Their quality will improve. Ever faster and more powerful chips and the widespread use of broadband Internet access will make online banking more comfortable for more and more people without necessarily triggering the emergence of completely new devices and inventions.

Some players will take a second stab at mobile banking. Increasingly faster transmission via GPRS or UMTS feeds the vision that mobile banking merits another attempt – in spite of the GSM failure. Indeed, many advantages can be thought of, SMS alerts allow a move away from the more expensive channels of communication, like contact centres. Also, useful information can be transmitted to the client, and increase customer loyalty at low cost. However, a comprehensive business case in transaction banking and brokerage with cost covering revenues is currently not in sight.

An increasing number of visitors to bank websites do considerable online research before making financial decisions. They shop around for financial products, and make their own investment decisions – in part without consultants. Researching via the Internet is gaining importance in online banking.

Benefits galore
Understanding how online banking can compliment your banks distribution mix and enhance your customer’s overall experience should be on the agenda of all financial institutions. Designing the most appropriate experience will in turn help boost the bottomline of a bank’s accounts as it moves its customers to a more cost effective channel.
However, if not executed correctly through an informed research process, the result could be disastrous, resulting in disengaged customers with whom you lose that valuable interaction. The flip side is, if done well it puts the power back in the consumer hands allowing them to bank as they please when they please.
There are marketing companies, which provide its clients with objective and reliable marketing information and consumer insights that add value to their business. The goal is to help clients make decisions that will enable them to build revenue and profits.
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