Tiffani Montez

In an effort to create a better customer experience, drive incremental sales and build customer loyalty, many financial institutions around the world have been tracking customer interactions in the online and mobile banking channels. 

Aite Group conducted an analysis of consumer behavior across multiple countries to better understand the difference in how frequently a consumer uses online or mobile banking by product. This analysis also sought to better understand the behavior differences by generation and any difference in how often a consumer checks his or her account statements and enrolls in alerts 

A report based on this analysis determines how to position certain capabilities in digital banking assets and areas of investment that can help transform the digital experience. The analysis is based on a survey between Q3 of 2016 and Q3 of 2017 of consumers in Australia, Brazil, Canada, India, South Africa, Spain, the U.K. and the U.S. By determining the frequency of consumer login to online and mobile accounts, Aite Group sought to better inform financial institutions about consumer preferences and habits.  

During the survey, certain market trends emerged. Banking products have become a commodity for most users, and the banking industry has migrated to digital channels. Rising customer demand puts customer experience at the forefront, which in turn fuels the collection of more data on consumer insights. 

Despite these trends, for the most part banking products are the same, with some variation in terms, pricing and features. The only true source of differentiation for banks and credit unions to compete on is customer experience. Consumers’ channel preferences are shifting from the branch and contact center channels to digital channels – online and mobile.  

New and emerging touch points are being introduced, pressuring banks and credit unions to find new ways to engage consumers. Other industries, such as the retail sector, have already impacted customer expectations and set new standards in the area of customer experience. New touch points create a new data stream that can be used for insights, to better serve consumers and to help consumers meet their financial goals. 

David Albertazzi

Redefining ‘Active’ Users 

It’s time for digital banking executives to redefine “active” and track digital banking activation metrics consistently. 

According to the Aite Group survey, savings accounts have the highest number of active users, followed by credit cards and checking/current accounts, with 88 percent and 86 percent of active users and 9 percent and 13 percent of moderately active users, respectively. Prepaid customers are the least engaged, and that may be because customers may not use this account as their primary financial instrument. 

Financial institutions need to reevaluate how digital banking active users are defined, Aite Group recommends. When the online channel was first introduced, most financial institutions defined active users as users who logged in once within the past 90 days. Over time, some channel managers changed the “active” definition to mean one login within 30 days, but some have not defined this consistently across all metrics or even products. In the digital banking sector, an “active” user needs to be redefined and tracked consistently.  

Aite Group also urges financial institutions to transform the digital banking experience and act on the growing importance of customer experience online. Today’s digital experiences are a replica of the self-service and account-management activities supported in the branch and the call center. While digital banking has reached critical mass, the capabilities supported in today’s digital experiences are still too focused on driving down cost to serve.  

With eight in 10 consumers logging into digital banking at least two to three times a month, there is a significant opportunity to create value-added digital banking experiences that deepen the customer relationship.  

Financial institutions should also eliminate paper statements for customers who are enrolled in electronic statements. Close to one-quarter of credit card customers receive both paper and electronic statements, according to the survey. Given the frequency with which customers check their statements for fraudulent activity, paper statements provide little value.  

Digital banking executives should look for incentives that resonate with customers, such as providing rewards or donating to a charity.  

By evaluating new touch points, such as chatbots and interactive assistants, financial institutions can recreate their digital strategy and create new ways to interact with customers.  

In the past, digital channels have been used to perform routine account tasks, such as reviewing current account balances, paying bills and transferring money. Chatbots and interactive assistants provide a platform that enables financial institutions to interact with customers in a way that is personal and more humanlike.  

Finally, Aite Group recommends that all financial institutions develop a channel migration strategy. Although this report paints a pretty picture of active digital banking users, there is still plenty of opportunity for financial institutions to migrate users who use branches or call centers for more routine self-service tasks to the digital channels. Some financial institutions are using predictive analytics to determine what capabilities customers are using via the offline channels – branch and call center – and are developing marketing campaigns to migrate branch and call center users to the digital channels. 

David Albertazzi and Tiffani Montez are senior analysts on Aite Group’s retail banking and payments team. To learn more about Aite Group’s research coverage of banking technology and retail banking, please contact Aite Group at info@aitegroup.com.