The high-net-worth consumers whom banks covet the most would like to do more account management online, but they tend not to because they find banks Internet services cumbersome and limited, according to research from Gomez Advisors.
Bank Web sites are placing too much emphasis on cross-selling and not enough on account aggregation, according to the affluent customers whom Gomez surveyed. Christopher Musto, vice president of research at the Waltham, Mass., firm, said the current generation of aggregation services are not sophisticated enough to satisfy the financial management needs of these customers.
Mr. Musto, a co-author of a report called How to Run Web Banking as a Business, said banks are missing an opportunity to cement their relationships with customers. The Internet offers a one-stop shop dynamic that is not often seen offline, he said.
Gomez conducted interviews with 4,000 adult Internet users, half of whom use online banking.
The frustration among affluent bank customers lies not so much in the banks technology, but in how banks fail to capitalize on it, Mr. Musto said in a conference call with clients and members of the n0ews media last week.
Banks have built a Ferrari in terms of cross-selling, but that Ferrari is driving on square wheels, he said.
For example, 9 out of 10 bank Web sites today let customers apply for checking accounts online, but only 33% of the sites that do so validate the information on the application immediately by comparing things like ZIP code and city name to weed out fraudulent applications and only 40% pre-fill the form for the customer, even if the bank already has that customers address and other information in its files, he said.
Internet customers told Gomez that they preferred online statements over paper ones, and that they preferred to submit change-of-address information and other common correspondence through e-mail, Mr. Musto said. They choose the Internet over other channels for a number of routine service requests and document delivery.
This indicates that a choice group of customers is ready for electronic statements, in which they would receive check images online, he said. While some banking companies have dismissed this as too costly, Bank of America Corp. is planning to offer check imaging over the Internet. Mr. Musto said, The largest retail bank in the country has decided it is not too expensive.
According to Mr. Musto, 22.3 million Americans doing some Web banking, but only 13.6 million are active users who routinely do more online than check their balances or pay a bill.
Web banking has arrived as a measurable business proposition, and it has particular appeal to some of your most demographically attractive customers, he said.
While it is fine for banks to have a toe in the water in the evolving market for wireless financial services, it did not appear that such offerings would be significant for institutions before the end of next year, Mr. Musto said.
