October 20th, 2009

Survey: Online Banking vs. Brick and Mortar

To go along with the introduction of our Internet Bank search filter, which lets you filter your search to find banks that only offer traditional banking locations, we’ve decided to compare consumer preference for online banking with that of traditional branch-based banking, and to try and determine what it takes to convince someone to take their banking online.

MyBankTracker Introduces User Surveys

In addition, we are using this opportunity to premiere our Survey tool, which helps us gather data to better serve you with information targeted at your banking needs. Please take a few seconds to answer the questions concerning online banking and give us some insight into the preferences of our users.

A New Way to Bank

Online banking has blown up over the last few years, and with it, the number of banks that operate strictly as online institutions. Rather than bother with constructing brick and mortar branches that each require their own staff and maintenance, banks are following the trends of consumers who do almost all of their banking online and benefiting from the reduced overhead costs that come with traditional banking methods.

Can You Put a Price on Service?

However, for some people, rates aren’t everything. While it is nice to get an extra 0.5% APY on your CD, who much does it take to make you willing to give up the ability to walk into a bank and talk with a customer service representative at your local branch?

It turns out that it might not be much. According to numbers released in 2005 by Forbes and the American Customer Satisfaction Index, customer satisfaction is closely related to the amount of internet banking options customers have.

Customer Satisfaction and Online Banking

Customer Satisfaction	Online Banking	Traditional Banking
Overall	77%	75%
Retail Banking	80%	72.6%
Online Bill Pay	80%	72%
Likelihood of Purchasing Additional Banking Products	63%	54%

Forbes 2005 (PDF)

As you can see, customer satisfaction is overall higher with online banks; for some reason people prefer to do their banking online. Will this trend, coupled with the fact that online banks are generally able to offer higher rates, spell the end of brick and mortar banking as we know it?