Posts Tagged ‘Online Banking’
Online Banker Report has just issued its latest and the topic is future based look at the next 10 years for online banking and mobile banking.
Every year Jim and the team put together a review piece for the space the past year, and with predictions on usage patters for the next ten years. It is a must read for online banking professional in my view.
The latest Online Banking Report: 2010 to 2019 Online & Mobile Banking Forecast is now available. The report includes our latest 10-year online banking and bill pay forecast. For the third year in a row, the forecast was bumped up a few percentage points to reflect a more robust outlook for adoption, thanks primarily to mobile banking. For example, we now project 73 million U.S. households banking and/or paying bills by online or via mobile in 2013 (note 1).
The report also includes a revised 10-year forecast for U.S. peer-to-peer lending. After experiencing a 30% decline in 2009, we expect healthy growth next year with a record amount of loan originations.
I looked back at the December 2005 version. Back then 2009 was estimated to come in at 57 million – 63 million users. The result for 2009 was 57 million. In general the predictions are pragmatic and Conservative. For a prediction to come within the range 5 years later is pretty good in my book.
On to the new report. The usage levels will continue to grow although at a slower pace in total numbers, but a broader usage pattern across services and products. There is lots of detail on this topic that you will need the 36 page report to assess for yourself.
There is the update to the history section indicating the timing of new offerings and those who produced them. The meat of the report lies in the ‘Best of 2009" which goes over the top innovations of the year in detail with lots of graphs, screen grabs and statistics. Mobile features highly but a few other surprises in there too.
One challenge that banks continue to fail at is mobile banking. Jim here coins the phrase ‘active banking’ to describe the gap that can be filled with mobile banking. Some have tinkered with active banking but most focus on mobile being a mini online banking (‘passive banking’).
In these days of deliberating on cost cutting while simultaneously improving service to assure customer retention, this piece is worth the read, to form basis for analysis of your own strategies for active and passive banking.
The Impact of Always-On Mobile Banking | netbanker
But most users will want to be in active banking mode as little as possible. So the challenge for financial institutions will be to make it easy for mobile users to balance "active banking" (alerts, warnings) with "passive banking" (logging in, requesting more data, changing settings and preferences).
Ultimately, the companies that manage this communication challenge well, will have customers for life.
Jim notes the new Mercedes app but he also asks the important question. When we consider the relatively small cost why would any bank not have an iphone app, even with rudimentary functions, such as balance and transfer, but through in bill payment and secure communication, and you cannot go wrong. The safari browser is as (more) secure than internet explorer which banks trust for majority of their web banking, so for the life of me I cannot see why this is not a priority. The positive press and customer comments from users translates into marketing gold and customer advocacy.
Canadian Banks? Not one has an iphone app.
Along those lines, SunTrust (iTunes link) is the latest megabank to join the store (last week), leaving US Bank, Capital One, BB&T, and HSBC as the remaining top-10 U.S. retail banks without their own iPhone app. Who will be the last one in?
This is a significant survey with online banking leading over branches for the first time in consumer preference. (ht netbanker)
ABA SURVEY: CONSUMERS PREFER ONLINE BANKING
Survey shows shift in consumer preference away from visiting bank branches
WASHINGTON – A new survey by the American Bankers Association shows that for the first time, more bank customers (25 percent) prefer to do their banking online compared to any other method.
“This marks a watershed change,” said Nessa Feddis, ABA senior counsel and retail banking expert. “It tells us that for the first time, more consumers prefer the speed and convenience of conducting their banking transactions on the Internet than visiting their local branch. It also tells us that consumers now have confidence in the accuracy and security of online banking,” she added.
This is a theme that is gathering steam. It is based on the reality that customers are using internet for their banking, and there is a high level of redundancy in offerring similar capabilities in physical locations. The counterbalance is of course the need to attract customers, new accounts and deposits which has traditionally been a branch activity.
That balance is shifting now and the tension between those two opposing forces will be ineresting to watch, as banks exectute strategies and consider their cost base.
BofA could eventually cut 10 pct of branches SF Chronicle
Bank of America Corp. could eventually shrink its 6,100-branch network by about 10 percent as consumers utilize other methods of banking, a company spokesman said Tuesday.
The move would be a pullback from the bank’s two-decade expansion, most recently under Lewis’ command, which expanded the bank from coast to coast.
[update] A quick look at Online Banking Report reminded me of an attribution I should have made, of Jims far sighted report in 2006. In that report he rightly took a 40 year view. Which Chairman at a bank is taking a 40 year view today ?
Online Banking Report: The Demise of the Branch (April 2006), for more on the long-term trends in the mix of branch and alternative delivery.
Finally we are seeing hints of what we all know is inevitable. It has taken a long time and probably this latest economic crisis, but the long view on branches suggests a damatic shift with less of them.
Yet slowly but surely, the internet is starting to make its mark on the sector as more people move their banking online. Lloyds is to shut up to 400 branches as part of its integration of HBOS. Its rivals are likely to follow suit.
A decade from now, the local branch could well be an endangered species as “cyber-banking” grows ever more popular and more branches close.