Banks neglect online channel at their peril

Banks neglect online channel at their peril

UK banking customers performed 10 million online transactions that would otherwise have been executed in branches or in call centres in January 2003, doubling the volumes recorded in the equivalent month a year earlier.

The figures, derived from data analysis among leading UK banks and conducted by eBenchmarkers, equate to considerable cost-savings for banks, which spend less than £30 a year per active online customer. Online banks have one employee for every 2500 online customers. By contrast, there is one bank employee for every 130 customers in the offline world.

The analysis shows that 13% of all current account holders - 5.6 million unique individuals - bank actively online, up 29% on the previous year. Over half of these active online customers bank with a major high street institution. In total, says eBenchmarkers, more than 100 million money-moving transactions were conducted at bank Internet sites during 2002, reflecting growing consumer confidence in Web banking.

However, almost 50% of people registered for online banking are classified as irregular users and almost all users have experienced problems logging on to bank Web sites.

EBenchmarkers blames cutbacks in technology spending for poor service quality on the Web. The company says there was a 50% fall in the amount spent by UK banks on marketing their online channels during 2002.

Stephen Adler, co-founder eBenchmarkers, says: "Now is the stage in the evolution of online banking where process and service will be critical. This holds the key to the next level: those banks that have enhanced these features most effectively will become the leaders in financial services in the future."

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