Consumers Want More from Online Banking

More than 80 percent of the US consumers polled rate their online banking experience higher than their traditional brick-and-mortar banking experience, according to an Internet survey by Frederick Schneiders Research. The survey, which was sponsored by eFunds, also found that 13 percent of respondents do all of their banking online.

While the survey found the majority of users are satisfied with their online banking experience, it also found that some users consider the process of opening and funding new accounts inconvenient and time consuming. Twenty percent of all respondents said they have started the process of opening an online checking account and then stopped. Many financial services companies report their account abandonment rate to be as high as 70 to 85 percent. The eFunds survey found that more than half stopped because too many forms had to be completed and mailed or faxed, and that the method of depositing funds was too inconvenient.

“This survey shows that Internet users are embracing online banking,” said Kim Anderson. “But the results also show they want online financial services companies to provide more services and, given the high abandonment rate of new accounts, make the account opening and initial funding process easier to accomplish.”

More than 80 percent of respondents said they are likely to use a service that would allow them to transfer funds electronically to an online account from accounts at other financial institutions, and nearly 80 percent rated such a service as convenient.

Nearly one-quarter (24 percent) of current online checking account holders initially funded their accounts by mailing in a check from another institution, the study found. Another 24 percent funded it with a direct deposit of a paycheck, and 14 percent initialized their online account by transferring funds from a separate traditional account within the same institution.

The survey also found the majority of consumers are concerned with the security of the Internet. Nearly 85 percent of respondents are concerned with the security of online transactions, such as credit card purchases on the Web. More than 90 percent are concerned with the security of their personal information on the Internet, such as submitting a Social Security number or other identifying information.

Additional findings from the survey include:

• 90 percent of respondents have online accounts at institutions that also have traditional branches, while 7 percent have accounts at banks exclusive to the Web
• Nearly 60 percent of those who currently have an online checking account have had it for less than one year
• On a scale of 1-10, with 10 being positive and 0 being negative, respondents rated the ability to see account balance and transaction history online very high at 9.2. The convenience of not having to go to a financial institution received an 8.7. Respondents gave an 8.1 to paying bills online, and lack of face-to-face contact with bank personnel was rated a 6.5.
• More than 80 percent of the respondents have purchased something via the Internet.

For the survey, Frederick Schneiders Research polled 444 respondents from an opt-in list of those with online bank accounts or those who expressed an interest in online banking. The margin of error is +/- 5 percent.