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Checking Study Confirms Trends, Raises Questions

May 27, 2010 | Subscribe Free

comScore’s 2010 State of Online Banking report validates some widely accepted beliefs among financial marketers, namely that people are shifting more and more of their routine transactions online and away from offline channels. The report was based on the survey results of more than 2,500 U.S. internet users (you can download a free copy here immediately after supplying your basic contact info). While the report confirms some intuitive concepts, it also begs some tough questions about issues like customer service and interest rates.

#1) Free Checking

2009: 70%
2010: 67%
Change: Down -3%

Maybe free checking has become something consumers expect so its importance is waning? Nevertheless, free checking is still the most critical aspect for new accounts, and is nearly twice as important as any other factor. Financial marketers are right to wring their hands over the introduction of new fees and/or the elimination of free checking accounts.

#3) Proximity of Branches/ATMs

2009: 40%
2010: 36%
Change: Down -4%

This confirms the intuitive belief that more and more people are increasingly comfortable managing their checking accounts online. Branches may be less important than they once were, but they are still one of the most effective ways to grow new relationships. And don’t forget about ATMs. “ATMs are an absolute necessity,” comScore observes in its report.

#4) Bill Pay

2009: 23%
2010: 24%
Change: Up +1%

A combination of factors are probably in play here. 1) Online bill pay is more established, with awareness and acceptance on the rise. 2) People’s overall level of comfort with online security is increasing. 3) PFM providers like Mint are fueling people’s interest in using online tools for routine transactions.

#5) Quality of Customer Service

2009: 4%
2010: 22%
Change: Up +18%

This looks like not one, but two statistical anomalies. First, how can anything — even customer service — become five times more important over a 12-month period? People may be prickly about banks and banking right now, but their feelings aren’t likely to translate into wildly higher service expectations. Second, and perhaps more importantly, why would “quality of service” score so low in 2009? If comScore’s data is right, more people wanted free mobile banking than good service in 2009. Despite the wonkiness in comScore’s metric, customer service ranks relatively lower as a priority for new accounts than most financial marketers would believe.

#6) High Interest Rate

2009: 32%
2010: 18%
Change: Down -14%

That’s a big drop, but what’s the explanation? Has the fervor and excitement surrounding high-interest checking accounts waned?

#9) Free Mobile Banking

2009: 5%
2010: 9%
Change: Up +4%

People’s interest along with adoption rates are still relatively low, but they are climbing fast. Someday soon, consumers will simply expect mobile banking and it won’t be optional — just like they do with online banking today.

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Comments (1)

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Bonnie says:

June 4, 2010 at 6:47 am

I don’t think consumers are less attracted to high-interest rates than before. I just think expectations have changed. And the current expectations are a reflection of the current environment.

If the survey was asking consumers why they opened a new account, and a high-interest rate was given as a reason less often than in past years, I think that could be because very few institutions are paying high interest rates right now. So fewer consumers are being enticed to open a new account for that particular reason.

I think the dramatic increase in consumers citing quality of customer service in opening a new account makes sense in that context too. People are angry at banks in general, so maybe they are more likely now than in the past to go open a new account somewhere else if their bank makes a mistake or if they have a poor interaction with someone there.

Also, over the past year, many financial institutions have made changes that irk consumers, like cutting home equity lines of credit, for reasons that have more to do with the institution than the consumer. And more consumers and businesses have had a harder time getting a loan. I think some consumers could interpret those kind of interactions as poor customer service and they could decide to open a new account elsewhere.

I don’t think more people wanted free mobile banking than good customer service a year ago. But I could see how maybe people are more inclined now than in the past to open a new account specifically because they want better service. I think there is a heightened awareness around service now. And I think people who have even a small service issue are far more likely to “punish” an institution by going to open a new account elsewhere.

That’s my take.