An article in Online Media Daily reports on a research study which found that people who bank online spent more than double the average online shopper’s expenditures during the previous six months. The article concludes that
…an uptick in online banking rates might thus help revive e-commerce”
(Note: It’s not clear if the authors of the study came to that conclusion, or just the author of the article).
My take: A ridiculous conclusion.
Consumers over 30 (if not 40) start off online by surfing the Web, then buying something, and then accessing bank accounts. Younger consumers — for whom online behavior is innate, not acquired — conduct their lives online, and already have sky-high eCommerce and online banking adoption rates.
But even if online banking adoption did lead to eCommerce activity, did it not occur to the study authors that online banking customers might be more affluent than other consumers, and that that might be the reason why they spend more online?
The article goes on to imply that banks’ lack of home page personalization is an obstacle to online banking adoption. According to another study from another researcher, banks were “behind the curve” in home page personalization, product and service promotions, and online recruitment.
That might be true — but that has nothing to do with online banking adoption. Inertia (in other words, 30 to 40 years of banking offline) and security fears are today’s predominant hurdles that keep non-online bankers from becoming online bankers. How in the world could personalizing the bank’s public site home page drive online banking adoption?
Unfortunately, the article buries the most important study among the ones it cites. That being a study conducted by IBM and Kana Software that found that financial institutions — not just banks, but insurers and investment firms — are failing to provide adequate online self-service. According to this study, 95% of financial Web sites fail to answer questions about topics like check cancellation fees, making insurance claims, and buying and selling stocks.
Personally, I find the 95% number suspiciously high. But if it’s 95% or 50%, the underlying implication is the critical point: That online banking (and other financial services) adoption is suffering because service functionality is lacking.
And that’s the best reason for a banking exec to be concerned about online banking adoption rates. Not because it might drive more eCommerce spending, but because it might drive high-cost service transactions to lower cost channels like the Web.
And because it improves the perceptions in the minds of customers that the bank is providing a high-quality, convenient customer experience. Which clearly is not common in today’s financial services world — despite the claims that financial firms make.
Technorati Tags: Marketing, Banking, Online banking, eCommerce
Ron, Thanks for taking the time to articulate the fallacies in this article. You see this kind of sensationalism all the time. Thank goodness alert bloggers who’ve actually worked in the real world, such as yourself, are beginning to “police” the overreaching press releases and resulting articles. We’ll all be better for it.
Thanks for the comment, Jim.
Sometimes I think I could blog on just the lousy market research that’s out there — but I might have to include some of my own, so I think I’ll pass on that idea.
I totally agree! Everybody repeat after me: correlation is not causation.
(My sweetie took Statistics when he went back to school several years ago, and I did a lot of looking over his shoulder. Damn useful. Everyone should take Statistics.)
Elaine: I’ve had a recurring — and frustrating — conversation over the past few years when discussing market research results. It goes like this:
Me: Just because these two things are correlated doesn’t mean
one is CAUSING the other, you know.
Other person: But it could, right?
[end of conversation]