Banking on Self-Service

Banking on Self-Service

JUNE 29, 2007

What’s really driving online banking?

More than three-quarters of US and Canadian consumers polled said they were more likely to trade with organizations that offer self-service, according to a study conducted by BuzzBack Market Research for NCR Corporation. Over nine in 10 also said it would be valuable to combine mobile devices with the Internet and self-service kiosks or ATMs.

ATMs and kiosks now come in a variety of flavors, including Internet-enabled models and ticket-printing multifunctional banking machines. In other settings, these devices can help people check themselves in at the airport or renew their driver’s licenses without waiting in line.


Services that Consumers in the US and Canada Would Like Offered on Self-Service Kiosks, May 2007 (% of respondents)

ATM
makers have good reason to promote self-service technology, but the
study recognized that consumers felt some transactions were better made
in person, especially for banking.

For example, nearly
three-quarters of respondents said they would prefer to speak with
someone for investment advice or when purchasing insurance. Nearly 70%
said they preferred getting their mortgage advice in person.

Bill
Nuti of NCR said, "Proper deployment of self-service will allow
business to focus personal assistance where consumers find it most
valuable."

The flip side of that statement is that banks find
it more valuable to deliver some transactions at their branches.
Investment advice and sales, for instance, have more profit potential
than printing out balance statements.

Transactions
made at bank branches cost more to deliver than those made by remote
delivery systems like ATMs, phone banking and online banking. As such,
the push has been on for years by some banks to push less profitable
accounts to use remote channels more often.

eMarketer Senior
Analyst Lisa Phillips said, "Bricks-and-clicks are still the right mix,
although more and more banking will be done online as the boomer
population ages into its 70s in the next decade."

So how many people actually use self-service banking?

An Ipsos-Reid survey of US consumers commissioned by the American Bankers Association
(ABA) found that 35% of respondents ages 18 to 34 banked online more
often than they visited a bank branch. Another 33% said they mostly
used ATMs.

By contrast, people ages 35 to 54 preferred bank
branches to online banking, as did 47% of people older than 55. Just
13% of that age group preferred online banking. Retired people
overwhelmingly preferred to visit a bank branch.

Demographic Profile of US Consumers, by Banking Method Used Most Often, July 2006 (% of respondents)

Put another way, 67% of people ages 18 to 34 do not bank online, according to Mintel International Group. The Ipsos-Reid/ABA data showed 65% of this age group chose other venues for banking most often.

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