Mobile Banking Gets The Attention, But The Real Growth Remains In Online Banking
NEW YORK-While mobile banking is getting much of the media and product development attention, there's a quieter channel change going on that's received little attention -the growth in online banking.
Research conducted recently by Novarica found that not only are 38% of the U.S. population avid users of online banking services (versus the 12% to 18% of mobile banking users, depending on whose estimate you go by), but the number of people who prefer to use the online channel for basic banking transactions has grown around 30%.
Online banking is now the go-to destination for 70% of Novarica's survey respondents when researching products and for 68% when checking account balances. Sixty percent of consumers prefer to transfer funds online, again more than any other channel. For those of us old enough to remember 1995, when Security First Network Bank opened the first internet-based bank and got the stalled online banking movement moving, these numbers are high.
And in an oddball sign of the times, Japanese electronics manufacturer Sony wants to open an online bank in Australia. Japanese paper The Nikkei has reported that Sony intends to begin online banking operations in Australia as early as 2012. The $23-billion Sony Bank is the largest online bank in Japan.
Many banks' online banking platforms are 10 years old or older. When asking their banking clients about their intent to invest in online banking, Novarica analysts found that more than 40% of are evaluating new online banking features such as P2P, click-to-talk, and account aggregation.
"With online banking now well-established, banks are investing to upgrade their infrastructures to support new capabilities, as well as to support improved integration with other channels,"says Madhavi Mantha, principal at Novarica.
Mantha recommends institutions consider several enhancements to their online banking programs. One is integration with personal financial management, so that a customer could analyze their spending and savings habits. Another is targeted offerings, such as merchant rewards and loyalty programs. A third is online account opening-Citi and Wells Fargo have been working to improve their online account opening process. A fourth is the ability to easily set up e-mail and mobile alerts online.