Empathica Research Shows Preference for Online Banking, Branch Support Needed When Problems Arise

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The Empathica Consumer Insights Panel, which surveyed 15,000 Americans and Canadians, also reports that while consumers trust Internet banking, mobile banking still lacks mainstream acceptance.

Connecting with consumers in a one-on-one manner can drastically influence bank loyalty. If you can quickly address a consumer’s concerns, they are more likely to be loyal to your bank than a consumer who never voiced any concerns at all.

September 30, 2010 -- Empathica Inc., a leading provider of Customer Experience Management (CEM) solutions to some of the world’s most respected brands, has announced the results of its Q2 Empathica Consumer Insights research. This quarter’s survey of more than 15,000 Americans and Canadians focused on banking and identified consumers’ preferred channels, confidence in each channel and bank loyalty factors.

For routine transactions, 41.4% of consumers indicated their preferred banking channel was the Internet. This was followed by Branch at 32.6%, ATM at 23.3%, and Mobile and Telephone a distant fourth and fifth at 1.5% and 1.3% respectively. Yet, when a problem arose, consumer preference drastically shifted.

Consumers most often wanted to speak with a person when they had an account issue. Sixty percent cited the desire to visit a branch with a banking problem, while 34% preferred using the phone. Only 6% would prefer to take up their issue online.

“Connecting with consumers in a one-on-one manner can drastically influence bank loyalty,” said Edwards. “The importance of this is compounded during problem resolution. If you can quickly address a consumer’s concerns, they are more likely to be loyal to your bank than a consumer who never voiced any concerns at all.”

This is further supported by Empathica’s final questions on major transactions and new accounts. For major transactions, such as a home loan, 78.7% of consumers preferred to visit the branch. Only 18.5% preferred the Internet, 2.5% the telephone and 0.3% opted to use their phone. When opening a new account, consumers cited they had similar preferences.

“Our research continually shows that banks have an opportunity to build loyalty at several stages of the customer cycle,” Edwards added. “Knowing that customers have certain needs and channel preferences during routine transactions, major transactions, problem resolution and when they open a new account or service, can help banks better prepare front line employees to deal with these situations.”

Mobile Banking

Despite growth popularity with the mobile channel in particular, North American consumers still have yet to really harness mobile banking. As indicated above, only 1.5% use their mobile device for everyday transactions, which could be related to security concerns.

In fact, 51.2% of U.S. consumers and 60.3% of Canadian consumers say they do not trust the security of mobile banking, compared to the 21.7% of U.S. and 26.2% of Canadians that do not trust Internet banking. Out of all methods for transactions, consumers trust the branch the most (84%).

“Internet banking went through the same hurdles with privacy and security concerns,” said Edwards. “The more mobile technology is developed, however, the more you’ll see consumers using their mobile device for banking. Right now it’s just not at a stage where consumers trust device security, but the mobile channel will certainly play an important role in the future.”

While mobile banking has a very low percentage of primary users in Canada, those who use it express a surprisingly high level of affection for their financial institution. For Canadian consumers who cited using mobile banking the most for routine transactions, 83% were likely to recommend the channel. Branch, telephone, Internet and ATM all fell at or below 77%.

“This goes against the notion that if you’re a mobile customer, you lack the touch points that build brand ‘intimacy’ and the advocacy that follows,” said Edwards. “It’s actually quite the contrary, with these consumers maintaining better overall perceptions of services in general.”

This could have to do with the demographics of those who typically use the mobile channel and their overall likelihood to recommend, added Edwards. In fact, the majority of those who said customer service is getting worse tended to use telephone banking for their preferred channel. Likewise, the majority of those who said customer service is not getting worse tended to use mobile banking most for routine transactions.

“While in this instance we cannot make a direct correlation between level of customer service and a particular channel, it’s interesting to note that consumers who favor mobile banking seem to be more optimistic about the levels of customer service,” added Edwards. “Mobile devices allow consumers to have direct and immediate control over their financial transactions, which we believe leads to a perception that service is generally improving. In fact, what is improving is the efficiency, intuitiveness and immediacy of being able to transact. Not surprisingly, those who favor channels with more direct contact with service agents, during telephone banking, felt that customer service is getting worse.”

Edwards said two reasons may account for this perception. First, with call centers, transactions are limited by the hours of operation, the ease of navigating to the right solution owner, and the knowledge and capability of the agents who are there to assist. Second, consumers are more apt to complain to -- or about -- an anonymous person over the phone.

U.S. Versus Canadian Preferences

Results showed that Canadians favor Internet banking overall (49.4%), which is 10 percentage points higher than Americans (38.2%). According to Internet World Stats, however, both countries’ Internet penetration stands at around 77%.    

For major transactions, branches are preferred (76.2% U.S., 85.2% Canada), with Internet banking coming in at 21.1% for the U.S. and 11.9% for Canada. While fewer Canadians use the Internet as their preferred channel, 84% of those who do are satisfied with the experience.

For problem resolution in particular, telephone is much more comparable to the branch, with 36.5% of U.S. respondents and 27.2% of Canadian respondents using the telephone, as compared to 57.2% of U.S. and 66.9% of Canadians preferring the branch.

“The fact that Internet penetration is the same but Canadians nonetheless use it more than Americans is good news for banks in Canada,” said Gary Edwards, EVP of Client Services at Empathica. “The differences cannot be explained away by differences in accessibility to these services. It has something to say about cultural differences and overall Internet banking use.”

For routine transactions in both the U.S. and Canada, branch and ATM banking came out as second and third most used channels, respectively. Mobile came in at the bottom, with only 1.7% of U.S. consumers and 1.1% of Canadians reporting they use mobile banking as their preferred channel for routine transactions. Telephone ranked similarly, with only 0.8% of U.S. respondents saying it was their preferred channel and 2.6% of Canadian respondents citing the same.

About the Empathica Consumer Insights Panel:
The Empathica Consumer Insights serves as an authoritative voice on consumer based economic indicators; the retail, financial services and restaurant industries; consumer shopping intentions and customer satisfaction as reported by thousands of consumers in the U.S. and Canada. Results from Empathica’s Consumer Insights, led by Dr. Gary Edwards and Empathica’s Consumer Insights’ team, are published on a quarterly basis. The results are based on outbound Internet surveys with Empathica’s growing Insights Panel, derived from more than 30 million consumer surveys per year. Results have been weighted to reflect latest Census distributions in the U.S. and in Canada, including Region, Gender, Age and Income.

Aforementioned data is reported by the Empathica Consumer Insights Panel – Q2 2010, Issue 3.

For more information, visit http://www.empathica.com/insights/.

About Empathica:
Empathica provides Customer Experience Management programs to more than 200 of the world’s leading brands, ranging from multi-unit retailers, to banks and restaurants. Its rich analysis of survey data using state-of-the-art surveying and dashboard reporting software allows for performance-improvement solutions, evidence-based marketing insights, and customer experience management consulting. Annually, Empathica’s 30 million customer surveys in 25 languages reach more than 70,000 locations. A privately-held organization, Empathica is headquartered in Mississauga, Ontario, Canada and also has offices in Birmingham, England and Alpharetta, GA, in the United States. For more information about deriving actionable insights that enhance a brand’s operational excellence, visit Empathica at http://www.empathica.com.

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