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Opinion: 5 ways for banks to improve their online banking services

Posted in News

By Trent Mankelow

The online banking industry has revolutionized how people manage their finances. First introduced to New Zealand in 1997 by ASB, since then it's taken off. 56% of New Zealanders now use online banking at least weekly (the highest out of the 13 countries covered in the World Internet Project).

Despite its popularity, online banking may have reached the saturation point in New Zealand. It's fundamentally the same as it was in 1997, and I believe it's time for a shake-up. So here's what I think New Zealand banks need to do to innovate:

1. Help people manage their finances

Why can't I see a simple graph of my spending when I log in to online banking? Why doesn't the bank make an attempt to automatically categorise my expenses, so that I can see where I might be overspending?

Simple functionality like this can help me manage my finances as an individual, but there is also an opportunity to raise the financial literacy of New Zealanders as a whole.

The banks don't even need to show much leadership; they could just facilitate conversations between their customers. For example, online tools like Mint and Wesabe have thousands of people sharing tips on how to save money on groceries or pay off the mortgage more quickly. Why do we need to rely on third parties? Why can't the banks do this kind of thing?

2. Ensure that functionality is easy to find

According to Forrester, "Financial-services executives rate usability as the most important contributor to the success of a bank or brokerage site." But as more and more banking services go online - foreign exchange, term deposits, signing up for new accounts - it's getting harder and harder to find stuff. BNZ have given up completely and have a top-level category called 'Other Services'.

I believe that this issue arises because banks are very project-driven. Individual project managers are focused on delivering their project on time and within budget. Project managers are awarded by getting products to market, not on the customer experience of what they implement. Because the funding model is so project-centred, little thought is given to how the project fits into the broader context of online banking or how it contributes to a holistic customer experience.

3. Focus on analytics

There are 6 people at Trade Me who focus full-time on analytics - looking at how customers are using, trying to identify content holes and process bottle necks. We consult with most of New Zealand's banks, and I don't know of a single person whose job it is to look at how people actually use online banking - how to make the experience better.

4. Cross-sell, up-sell

Over time, carefully tracking how people use online banking results in powerful insights into customer needs and behaviour, product and campaign effectiveness, and even purchasing or service trends. This information can help banks to better understand, target, and service various user segments, and identify up-sell and cross-sell opportunities.

When carefully targeted, customers don't perceive links to additional products or services as a sales pitch; they see them as useful links. For example, if I am constantly maxing out my credit card, and one day I see a link to increase my limit, I'm not going to get annoyed. I'm going to be pleased, and the bank is going to get more business from me.

5. Appoint a Customer Experience Officer

"Banks need to think of themselves as purveyors of customer experiences, and they need to master cross-channel distribution -- the integration of clicks and bricks. The experience has to be superlative, whether it takes place inside a bank branch, at an ATM, on the phone, or on the Web." - Bob Steele

A customer doesn't just interact with a bank online. You might deal with a branch to sort out your mortgage, get a text alert when your balance is running low, phone the call centre when you want to ask about something in a statement.

To create a superlative customer experience across all these interactions, there is no avoiding it - there needs to be one person who is responsible for the overall customer experience. Call centre, IVR, ATM, online banking, public site, branch - one person. We only know of one brave organisation in New Zealand who has done this.

After a long period of strong growth in the number of users of online banking services, the market is entering its next phase. The banks have no choice but to innovate, and the key success factor is going to be the customer experience.


* Trent Mankelow is the director and co-founder of Wellington-based Optimal Usability, a consultancy advising companies on website and electronic device usability.

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A fair criticism. But don't

A fair criticism. But don't expect the banks to talk customer service nor customer satisfaction. With all the old platforms they have they will be another 10 years catching up and by then there is more new stuff.

I am with TSB and

I am with TSB and based on my experience this is the only bank whose online services are matched to face to face and over the telephone transactions. They absolutely deserve their first position!

Hi Viking. Good point. However,

Hi Viking. Good point.

However, Kiwibank had an opportunity to start completely from scratch, and they still make a number of these mistakes. In my opinion (and I have to be careful here, because they are a client) they rushed the implementation of a lot of their sysems and processes, which meant that they didn't maximise their advantage of having no legacy systems to deal with.

Out of the box systems almost never result in a great customer experience.

Good stuff Trent - I've

Good stuff Trent - I've been waiting for the day when the banks provide analysis of transactions in their online services too. The first bank who offers it gets my business. They could also set it up to export data to accounting programs pre-coded.

Silas you are right. TSB

Silas you are right. TSB is certainly on the ball as far as I am concerned. Never need to use a chequebook since I joined their internet banking, they send an alert email when my deposit drops past a predetermined point and are only too keen to help.

I am with national bank,

I am with national bank, and you cannot even view your transaction history back more than 3 months!! That is terrible. The other major thing I would like to point out is all banks are all missing any sort of API or ability for a website to securely download transactions via say CSV. Other companies like nzpost also fall foul of this and have no method of calculating shipping costs on the fly via an API, I can only hope they learn from people like twitter or most US companies who are well ahead with this stuff (not sure about US banks however). This all makes it very difficult for financial software to integrate and remove manual data entry which electronic banking was supposed to solve. I agree with some of the above comments in that the software they use is very very old, and they are completely unresponsive to customer feedback.

James Not only that with


Not only that with national, If you get emailed bank statements (not guaranteed to be delivered) you a) get no discount and b) get charged if you ask for a paper copy, add on to this ridiculous charges for setting up an AP or a manual payment, they just dont get it.


Set up charges get up

Set up charges get up my nose. I do all the work on line and I get charged$1,50. How does that work?

Do you work for National

Do you work for National bank ?
I have accounts with you and your online banking is the most primitive of any I have seen. A family member quit and went to Westpac for this reason.

Do you work for Kiwibank ?
Pretty decent really but....
No secure email ?
Far too many issues, downtimes, what do you run your banking systems on Windows ?

Nice article Trent !

I just add here that IRD is trying to improve its online image, looks very very basic at this stage.
Ugly user interface, hard to navigate mess, who designed this ?
You did not pay for it did you ?