It appears that despite mortgage troubles and skyrocketing credit card rates, surprisingly enough, customers are not totally immune to the so-called “charms” of the banking industry. The banks’ most potent weapon? Online banking.
A survey among the top online banks including Bank of America, Chase, ING Direct, and Wells Fargo among others, show that monthly enrollment in online banking increased by 27% over the last 13-month period of Feb. 2008 to Feb. 2009 (Source SeekingAlpha).
The economic downturn which was strongly felt during the later part of last year proved to be a boon for these banks’ internet banking business. Bank clients needed a reliable refuge for their hard-earned money, and found what they were looking for – and more – from online banks.
Results of a study by comScore, Inc. further reveal that not only were more bank customers exploring the world of electronic banking, about 71% of them were in fact, very satisfied with their experience (Source Finextra).
Convenience plus Rewards
Given the disturbing news of a less-than-stable banking industry, people wanted to have the means to keep a closer watch on their finances. Online banking allows 24/7 access to one’s account, an account statement that can be accessed anywhere, and some extra incentives to boot.
Last year, banks put out all the stops in their efforts to acquire more internet banking customers. From cash bonuses ranging from $50 to $200, to gift items, to high interest rates and rewards points, customers were showered with a steady stream of incentives and reasons to switch banks.
Tie-up with Other Online Services
Ultimately however, the banks that provided for the more useful online services won out. Already, online bankers are given the benefit of free online bill pay, free check card, and free transfers to other accounts.
The same survey showed that more than 60% of the online banking population expressed interest in free identity theft services, 52% wished to avail of free credit score monitoring, and 37% felt that they would benefit from the addition personal finance management tools.
A forerunner in the internet banking industry, Bank of America has managed to convince many consumers to give their online services a try, and has even turned 17 million of them to be quality online bankers, or those who log in to the bank’s site at least twice every month. One of the reasons for BofA’s success in this department is credited to their innovative promos and customer incentive programs that are offered with online banking service. One such program is the Add It Up, which allows internet clients to earn cash back by shopping from any of the retailer online shops found on the bank’s site.
On the banks’ side, upgrading their electronic banking service and stepping up customer acquisition efforts would allow them to get the additional client and deposit base, without necessarily spending more on operational costs. In a growing competitive banking environment, banks benefit a lot from clients going via the online route by doing away with teller interaction and costly paper handling.
Banks Going Green
In celebration of earth day just a few days back, Wells Fargo emphasized just how much the average consumer can contribute to the environment by transacting via the internet and opting for paperless statements.
Working out estimates using the Environmental Defense paper calculator, the banks revealed that Wells Fargo customers who no longer receive paper statements since 2006 have jointly contributed to save about 60,000 trees. That’s one more good reason to do banking online (source BusinessWire).
Clearly, online banking is not only making happy customers of those who use the service, or of the top banks who are making good business from it. It is also helping to preserve our environment for future generations.