Feb 092012
 

ComScore recently released its 2011 State of Online and Mobile Banking report.  The report is based on analysis of the top 10 Banks but contains many insights relevant to Community Bank and Credit Union executives.  You may also wish to read Ron Shevlin’s take on the same study.

The following seven items are of most interest:

1. Online customer engagement is anemic.  Not only is the customers’ stated interest in products unremarkable, but the use of such products & services is dangerously closer to zero.

ComScore 2011OnlineMobile Engagement ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Customer Engagement

 

2. Cross-sale of services is weak.  That includes revenue-generating services such as Identify Theft protection and Credit Score Monitoring, as well as support services such as Online Chat, Alerts, and Instant Messaging (see graphic above).

 

3. PFM usage betrays industry excitement.  Personal Financial Management (PFM), a tool touted by many as the preferred engagement tool, suffers from low level of interest (just 19% of customers) and even weaker usage metrics (just 8% of consumers) or less than half of those who say they have an interest!  (see graphic above).

This, despite the fact that on average, more than half of consumers are aware of the service.

ComScore 2011OnlineMobile PFMawareness ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - PFM Awareness

 

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4.  BillPay penetration and usage are weak.  BillPay – a core service that is said to enhance “stickiness” has penetration of less than 60% of customer base and just 21% customers establishing automatic / recurring bill pay.

ComScore 2011OnlineMobile BillPay ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - BillPay

 

5.  Email continues to be an effective communication tool.  The survey reveals that 48% of consumers report that they received some sort of email correspondence from their primary Financial Institution in the last six months.  Unfortunately, these communications have little or nothing to do with cross-sale activity, as just 8% of Consumers reported communication regarding any type of cross-sale activity.

ComScore 2011OnlineMobile emailComm ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Email Communication Type

As a result, only 17% of consumers responded to the email communication by visiting the Bank’s website to check for other products, just 4% shopped for a new credit card, checking or savings account and 6% opened a new account.  Interestingly, new accounts were offset by 3% of consumers who chose to close their accounts following email communication.

ComScore 2011OnlineMobile emailActions ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Email Actions

 

6.  Banks lag other industries in the utilization of Social Media.  Just 18% of Customers are aware of their Bank’s presence in any Social Media service.

ComScore 2011OnlineMobile SMawareness ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - SM Awareness

Unsurprisingly, most Customers that do visit their Bank’s social media site do so on Facebook.  In fact, Facebook visits are growing aggressively, increasing 30% in just 12 months to 81 million customer visits.

ComScore 2011OnlineMobile SMchannel ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - SM Channel

Not surprisingly, the main reasons why Customers visit their Bank’s social media properties is to receive Offers – be they retail discounts, credit card offers or online shopping offers.

ComScore 2011OnlineMobile SMreason ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - SM Attraction for Consumers

Having perused some of these properties, we conclude that most Customers will be disappointed not only with offers – their primary reason for visiting – but also by the lack of any kind of banking insights that an individual may be seeking.   These factors may go a long way toward explaining why Banks struggle to engage consumes through social media.

 

7.  Mobile offers attractive platform, although it is still emerging and unproven.    Mobile usage for financial services is in its embryonic stage yet already 16% of mobile users reported some type of financial transaction.  And 14% reported at least one Banking transaction in the past month via their mobile device.

ComScore 2011OnlineMobile MobileUsage ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Mobile Usage

Interestingly, Consumers utilizing mobile channels tend to be younger (not surprising) but what is very surprising is that they also tend to me much more affluent.  However, we do not believe that these two demographic classes are necessarily the same (eg. we do not believe that the more affluent consumers are represented by the younger generations).

ComScore 2011OnlineMobile MobileDemog ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Mobile Customer Demographics

The findings reveal that 41% of mobile users are 35 years old or older (eg. Gen X +) and that 31% of the same mobile-using consumer base has household income of $100,000 or more.  It stands to reason that the more affluent consumers will tend to be outside of the Gen Y category, especially given the recent research that indicates that 60% of non-student Gen Y population relies on their parents to subsidize their living expenses.  Another study suggests that the vast majority of Gen Y are either unemployed or otherwise underemployed based on their Facebook profile information.

However, true value of mobile channel is still far away given that most of activity today is focused on rudimentary, transaction centric activities.

ComScore 2011OnlineMobile MobileActivities ComScores 2011 State of Online & Mobile Banking Raise Red Flags

ComScore - 2011 State of Online and Mobile Banking - Mobile Activities

Utilization of mobile banking offerings significantly lags behind awareness of such services.  More concerning, is that none of the activities are even tangentially related a deepening of the customer relationships, much less any meaningful effort to cross-sell products and/or services.  Today, mobile banking is not much more than yet another “dumb” screen.

 

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Serge Milman

Serge Milman is the Principal Partner of San Francisco, CA based SFO Consultants which provides Strategy, Finance and Operations Management Consulting services. He is also the Principal of Optirate – a blog dedicated to growth and profitability strategies for Banks and Credit Unions. Serge can be reached at info@SFOconsultants.com.
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