Large investments in emerging services like mobile and online do not always translate into higher customer satisfaction or even high financial performance, says Javelin Strategy and Research in a recent report.
The firm also released a new competitive benchmark service, Outperform, which is a result of analyzing over 20 leading financial institutions. It provides insights to improve each banks’ return on investment on emerging bank services—mobile and online banking services.
“The banking industry is increasingly a ‘have-and-have-nots’ realm in which institutions that invest wisely in particular emerging capabilities are increasingly solidifying their dominating position,” says Jim Van Dyke, CEO and founder of Javelin. “Banks need to continually assess their investments to ensure they are carefully choosing the best technologies that create real customer value and higher financial performance beyond the latest fads.”
Online banking adoption has been growing rapidly at many large financial institutions and rippling through to the smaller tiers. Over 70% of Wells Fargo customers frequently log in online, and 65% do so at Bank of America.
While online banking has been viewed as an advanced service, one would expect these banks to capture large numbers of early adopters. Yet, Wells Fargo has fewer customers who consider themselves early adopters of technology or new services, at similar levels to community banks’ customer technology profile.
Bank of America and J.P. Morgan Chase have the highest proportion of customers rating themselves as early adopters (27% and 24% respectively). Understanding customers’ current stance toward new technology is vital when choosing particular capabilities that will result in greater loyalty toward high-value financial services and higher return on investment.
Javelin’s research found little overall correlation between customer satisfaction and technology adoption on a bank-by-bank comparison. For example, two large banks that are both mobile leaders investing in mobile technologies have varying levels of satisfaction. USAA, with all its mobile services, achieved high customer satisfaction scores with 90% of its customers citing “satisfied” or “very satisfied”, while Bank of America achieved only a 67% satisfaction score.
Javelin’s newest benchmark service—Outperform—reveals insights into how wise investments in emerging services can result in higher satisfaction and a stronger, competitive position. It helps U.S. retail banks assess their competitive position of emerging bank services such as mobile banking, online banking, mobile deposit, smartphones, and tablets. Outperform benchmarks over 20 leading financial institutions by surveying over 10,000 bank customers and providing insights and strategic direction to improve the banks’ return on investment.