Internet Banking: What Do Consumers Want?

Mobile functionality, online account opening top the list of desired features.

October 9, 2012

Internet banking has come a long way since first-generation solutions were introduced in the 1990s. Older systems allowed customers to view recent statements online, conduct transfers between accounts at the same institution, and pay a limited range of bills.

But consumers have come to expect greater functionality from online banking applications, including full account histories, check imaging, external transfers, and comprehensive bill payment, according to a white paper by First Data Corp.

“Meeting Today’s Customer Needs With Internet Banking” lists several Internet banking features that enhance customer engagement and loyalty, and reduce the risk of losing consumers to competitors. They include:

►Mobile functionality. With the continuing increase in smartphone penetration (50% of consumers and growing, First Data reports), financial institutions must adapt their online technologies and strategies to mobile devices—both phones and tablet computers.

This means providing text alerts, optimizing websites for mobile browsers, and making downloadable mobile apps available.

Offering a mobile banking app provides the necessary functionality and security for today’s consumers to conduct their online activities as safely and conveniently as they have come to expect—and it also facilitates the introduction of advanced tools like mobile remote deposit capture, mobile wallet capabilities, and P2P payments.

►Online account opening. Many consumers, especially those who are younger and more affluent, prefer the convenience of opening new accounts online—making this functionality critical to a successful online strategy.

Online account opening is not only convenient and efficient, it’s significantly less costly for institutions to administer than equivalent manual processes.

To be simple and quick, opening an account should take only a few minutes for new customers and even less for existing ones—with a minimum number of steps to complete an application.

The platform should support immediate automated approval of an application based on business rules defined by the institution, and all disclosures and signature forms should be handled electronically to reduce paper costs and optimize the customer experience.

►Enhanced alerts. Today’s customers demand timely and relevant account alerts, and they want them sent through multiple delivery channels for maximum convenience.

An institution’s Internet banking solution should be able to handle one- and two-way messages via text, e-mail, and voice, and should integrate with core systems for real-time list generation and response capture.

Alerts should go beyond simple account balance notifications and payment deadlines to include fraud prevention mechanisms like notifications for address changes, large purchases, foreign transactions, and wire transfers.

►Personal financial management (PFM). PFM tools allow customers to view their account activity from multiple financial institutions on one dashboard, helping them monitor their cash flow, budget their spending, and accomplish financial goals like paying down debt or saving for retirement.

PFM tools are a value-added benefit for consumers, and financial institutions that make them available through their online banking platforms have found that they are an effective way to increase loyalty by positioning the institution as the trusted source for financial planning and advice.

PFM tools also provide institutions with inexpensive new personalized marketing channels and cross-selling opportunities.

“With the right Internet banking solution—a user-friendly platform that satisfies today’s consumer expectations while allowing for easy deployment of tomorrow’s advanced technologies—financial institutions can alleviate the limitations they are experiencing with an outdated system, and improve their ability to retain and attract customers,” the white paper reports.

Visit the First Data’s website for more information.