Finovate Blog

Looking at the research, one is tempted to conclude that e-service is
less important than traditional phone and branch service. Customers are
relatively satisfied with their phone and face-to-face experiences at
financial institutions. According to Forrester, the traditional channels
enjoy an average satisfaction rate of 80%, nearly four times the rate of
e-service options which were in the low-20% range. Only the much-maligned
IVR (automated phone) service was lower at 12% (see Table 6, below).
More recent research shows that the Web is gaining ground in all areas
except problem resolution, where only 25% of respondents are satisfied with
the service received (see Table 7, below).

However, even though satisfaction trails other methods, online users
overwhelmingly prefer electronic channels when dealing with their bank. In
research released just this month, Vividence, a customer-satisfaction
research company, found that three times as many users prefer electronic
channels…

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Since 1995, e-service has been an important component of online banking
satisfaction. However, many financial institutions chose to defer major
investment in service capabilities on the theory that users were not
demanding it.

While that may have been true three or four years ago, it’s not the
current reality. Today, mediocre service puts you at risk of losing
sales, cost saving opportunities, and ultimately customers. Luckily,
expectations are still relatively low, so you have an excellent
opportunity to impress your customers

Table 2
Online Self-Service Evolution

Phase

Period

Typical Capabilities

Primary Market Beta 1995 to 1998 Brochure and short FAQ Outliers Version 1.0 Novelty 1999 to 2001 Longer FAQ, email address, rudimentary Web-based
inquiry, site search with poor results Early adopters Version 2.0 Utilitarian 2002 to 2004 Extensive FAQs, good Web-based inquiry, live
chat in certain areas, site search with marginal results Early mainstream Version 3.0 Early mainstream 2004+ Deep…

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Making the case for improved online customer service is easy. Online banking
customers now prefer it almost 3-to-1 over telephone support (see Table 1,
below). Done right, e-service
can increase customer satisfaction, decrease support costs, and lead to
increased sales. What’s not to like?

The problem is that costs are front-loaded and benefits are difficult to
measure. Bottom line: You’ll spend hundreds of thousands or more in anticipation
of future, largely hidden, returns. That’s a tough sell in any environment, but
especially in the low-margin financial services arena.

What’s a banker to do? Start by demonstrating the reach of your website to
both online banking users and other bank customers. This requires an effort to
persuade non-online banking users to register so you can track them over time to
measure the entire impact of self-service.

Next, continually add self-service tools and content to improve the online
experience. You…

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