Consumer attitudes to online current accounts

• Using global data from our FSCI survey this report identifies how consumer attitudes towards the online channel are changing.
• The report analyzes the causes of these shifts and identifies strategies that can be employed by providers to attract and retain online customers
• The report discusses the opportunities and threats faced by current account providers wanting to develop their online strategy

• Access the results of Datamonitor's Global FS Consumer Insight survey, enabling you to understand shifting online attitudes and behaviours.
• Identify why these changes are occurring, and understand the future implications for the online channel.
• Identify actionable strategies that can help encourage consumers to engage with the online channel.

Overview

Catalyst

Summary

Methodology

Table of Contents

Table of figures

Table of tables

Introduction

Financial Services Consumer Insight: dispelling the myths surrounding online behaviors

Understanding consumers' attitudes towards financial services is vital for providers

the future decoded

Trend: Global use of the internet has increased

Ongoing technological evolution has facilitated a steady increase in internet usage

Demographic changes and alterations in consumer behavior have increased consumer driven demand

Insight: Increased global internet usage has led to an increase in use of the online channel in the day-to-day management of current accounts

Take-up of online registration for current accounts is most popular in the West

The greatest proportion of online users are from Generation X, but take-up is becoming increasingly popular with older demographics

Many consumers still prefer branch banking

Insight: The online platform for current account transactions is not used to its full capability

The online channel is not being used for all the tasks available

Task preference shows some regional variation

Eurozone and US consumers check their balance more frequently than others

Trend: Mobile banking is gaining in popularity

Insight: Mobile banking will follow the same trajectory as online banking

Consumers are more comfortable performing simpler tasks through the mobile platform

Insight: Mobile banking appeal differs regionally

The mobile banking platform holds the most potential for emerging markets

Usage and adoption of mobile banking platforms varies considerably in the developing countries

Trend: The impact of Web 2.0 has provided banks with key opportunities to increase use of the online channel for financial services

Web 2.0 presents challenges as well as promises

Insight: Dynamic content is a key factor in engaging consumers

"MSN style" chat functionality holds great customer service and cross-selling potential

Insight: Greatest use of social media is for customer service rather than sales and marketing

Trend: Security issues are the biggest threat to online current account banking

Insight: Security concerns are more prominent in emerging regions than in the Eurozone and US

Insight: Day-to-day convenience does not overcome security concerns

Consumers are as concerned about post-fraud customer service as they are about fraud prevention and detection measures

Perceived security is just as important as real security

Authentication processes are key to finding the balance between deterring consumers and quelling security concerns

Action points

Action: Improve the online platform and venture into mobile banking platforms

Experiment more boldly with mobile banking technology

Action point: Acquire and retain customers through more experimental use of Web 2.0 technology

Integrate the use of social media into customer service strategies

Aggressive advertising through social media channels should be avoided

Integrate more advanced technology into the in-branch experience

Action: Focus marketing on alleviating security concerns

Make the authentication process less cumbersome

Increase focus on reverse authentication

Educate users on security and technology

APPENDIX

Data tables

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Global internet penetration

Table 2: Product holdings among those who have used online banking in the last six months or bought financial services online

Table 3: Product holdings in Asia Pacific

Table 4: Product holdings in BRIC countries

Table 5: Product holdings in Eurozone and US

Table 6: Internet penetration and online registration for current/checking accounts by country

Table 7: Online registration for current/checking accounts by age

Table 8: Product holdings by age

Table 9: Online banking will never replace branch banking by country

Table 10: Tasks conducted through online banking over the last six months (of those who have a current account/checking account)

Table 11: Tasks conducted online over the last six months by region

Table 12: How often do you check your bank balance?

Table 13: Consumers who avoid opening their bank statements, by country and region

Table 14: Mobile telephone subscribers per 100 inhabitants

Table 15: Tasks conducted online by urban Indians

Table 16: Why not online banking?

Table 17: Security concerns by age

Table 18: Of those that have never used online banking or bought financial services online, security concerns and preference to deal in branch by country

Table 19: Of those that have done online banking in the last six months or bought financial services online, security concerns and preference for face to face contact by country

Table 20: Proportionate identity fraud data

List of Figures

Figure 1: Internet penetration has shown consistent growth since 2000

Figure 2: Internet penetration is highest in North America but the majority of internet users are in Asia

Figure 3: Current/checking accounts are the most popular product to be registered online for

Figure 4: Current account online registration is the most popular in all Eurozone countries and the US

Figure 5: The BRIC countries have the lowest levels of internet penetration but comparatively high online registration levels for current/checking accounts

Figure 6: Online registration is most popular for current accounts across all demographics

Figure 7: Most consumers registered to use their current/checking account online are between 25 and 64 years old

Figure 8: Half of the global population believes that online banking will never replace branch banking in their eyes

Figure 9: The simplest and most frequently required tasks are the most popular on the online platform

Figure 10: Task preference shows some regional variation

Figure 11: Eurozone and US consumers check their bank balances most frequently

Figure 12: Consumers who avoid opening their bank statements by region

Figure 13: Mobile phone subscriptions have steadily increased since 1997

Figure 14: The mobile banking platform has increased in sophistication with the introduction of 'smartphones'

Figure 15: Mobile banking is expected to follow the same trajectory as online banking

Figure 16: Checking balances is the most popular function on the mobile banking platform in India

Figure 17: Mobile bankers in the UK appear to use the service during 'dead' time as a convenience

Figure 18: Monitise predicts the most growth for mobile banking in the Asia Pacific region

Figure 19: Mobile banking was found to be most popular with lower income users in India

Figure 20: UBank has pioneered the use of social media in Australia

Figure 21: Security concerns are the biggest deterrent to registering online

Figure 22: Security concerns span all age groups

Figure 23: Security concerns are greater in emerging markets, whereas a preference for dealing with people in branch is more important in developed countries

Figure 24: Security concerns show less disparity among those who are registered online, but are still lower in developed countries

Figure 25: Only 12% of identity fraud occurs through the online channel

Figure 26: Sending OTPs to mobile phones as a second authentication factor is gaining popularity

Figure 27: Use of social media such as Twitter represents a key marketing opportunity

Figure 28: Barclays piloted Microsoft Surface technology in its concept branch, launched in December 2008

Figure 29: Natwest educates consumers on how best to prevent consumers exposing themselves to identity fraud