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New Study Identifies Threats and Opportunities for Financial Institutions Within the Digital Banking Space

ath Power Consulting, a leading financial services research and strategy firm, has released of the fourth edition of The ath Power Consumer Digital Banking Study, a detailed assessment of digital banking usage, offerings, delivery methods, and customer experiences at financial institutions nationwide.

Based on over 3,000 survey responses collected in January 2017, study findings revealed that almost eight-in-ten respondents consider digital banking their preferred way to bank, while 91% feel digital banking is important to their overall banking needs.  Results also showed that 65% of consumers are highly satisfied with their digital banking solutions, which is a decline from 73% in our last study.

“The heightened expectations of today’s tech-savvy consumers combined with the lack of advancement and improvement of their financial institution’s digital solutions have certainly contributed to this drop in satisfaction,” stated Frank Aloi, ath Power Founder and CEO. “To maintain a competitive edge, FIs must move beyond basic functionality and accelerate their pace of innovation.  For those already offering advanced capabilities, our research revealed that some solutions are not yet acceptable in terms of usability, causing frustration among consumers.”

Study results found that online account opening is a desired feature with 81% of respondents likely to open a loan account online and 69% likely to open a checking account online, if the options were available.  Over half have attempted the process; however, almost three-in-ten had to abandon it at some point.  An equal number did not fund their account during the initial opening process.  Primary reasons for abandonment included the application process being too lengthy (42%) and too complex (39%).  If the process could be simplified, FIs would see higher rates of completion.  Of those who completed the process, 85% did so on a computer and 12% used an FIs’ website via their mobile device. Only 3% of applications were submitted via a mobile app.

Findings also revealed that 64% of consumers are interested in using all types of mobile payments.  In particular, person-to-person payments (P2P) are growing in popularity, with 44% already using this feature.  However, not all are taking advantage of P2P solutions offered by their financial institutions.  Many (led by Millennials) are using solutions offered by fintech firms like Venmo and Square Cash.  The study found that 55% of consumers would prefer that their primary financial institution handle these types of payments, 37% have no preference as long as they can conduct the transaction via their mobile device, and only 8% prefer a non-bank service provider.  Clearly, consumers are more trusting of their financial institutions, but many still choose non-bank providers for their fast, free, user-friendly mobile apps.

“In our study, just under three-in-ten respondents indicate a likelihood to leave their current financial institution,” said Ed O’Brien, ath Power’s EVP Research and Strategy.  “With this potential for attrition in addition to competition from alternative solutions that rival traditional bank digital offerings, it has never been more critical for financial institutions to deliver advanced, well-designed digital platforms.”

To learn more or order the report, visit http://www.athpower.com/the-ath-power-consumer-digital-banking-study/.

About ath Power Consulting

ath Power is the premier provider of customer experience solutions for the financial services industry, offering competitive intelligence, survey and shop research, compliance auditing, market analyses, employee training, and strategic consulting.  Since 1997, we have helped improve customer retention, build brand loyalty, ensure compliance, and increase profitability for financial institutions across North America.  To learn more, visit http://www.athpower.com.

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