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Opinion: 5 ways for banks to improve their online banking services
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 trademe.co.nz, 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.