Interactive Banking: Dollars and Sense

Increasingly integrated in our everyday lives, the Internet has transformed the way Canadians connect, interact and consume. Canvassing the nation, Ipsos delves into the `who, what and why' of Internet and technology usage and attitudes among Canadians. For a recent issue of the 2012 Ipsos Canadian Inter@ctive Trends Report, we took a look at Canadians' use of smartphones and tablets and their evolving habits with those two devices as well as Internet Canadians' online banking behaviours in the context of those new devices.

Once again our recent wave of Canadian Inter@ctive Trends Report looks at Online Financial Services such as web banking, mobile banking, online investments, and insurance. Online channel usage continues to grow in both retail banking and insurance. However, this growth is still driven mainly by routine transactions and information gathering activities (such as bill payments, account updates, price quotes, and product information), and about relatively simple commodity products and services (such as home and auto insurance) rather than more complex ones (such as claims, loan application, investment or life insurance purchase). This continues to reflect consumers' desire for the reassurance of a face-to-face or voice-to-voice interaction when conducting transactions that have a high emotional element or perceived downside risk to them.

Confidence in electronic transfers continues to grow, albeit slowly, probably reflecting the continued integration of technology into daily life and the increasing normality of using electronic channels for commercial transactions.

Adoption of new technology-based banking capabilities, despite their obvious benefits and convenience, will continue to be a slow process. A majority of respondents indicate that they have either never heard of, or have never used Interac e-Transfer, despite the capability being first introduced almost 10 years ago in 2003! Moving to the much newer mobile banking arena, we're therefore not surprised to see that only a small percentage of respondents have used mobile banking through a smartphone. And although growth is expected in this number in future waves, do not expect exponential growth, particularly since the penetration of smartphones among online adults in Canada is currently only 36%.

Technology-driven services - such as proactive email or text alerts - receive positive acceptance, particularly for those that help avoid negative consequences (for example alerts in the event of an unusual credit card charge) rather than those which are beneficial (for example an unusually large deposit). Financial institutions should continue to create technology-driven, value-added services for their customers as a means to foster engagement and enhance the customer experience.

Some key findings...

Taking a look at the data in our recent wave of the Canadian Inter@ctive Trends Report, we uncovered some fascinating points that would no doubt be of interest to banking and financial institutions. Here's a snapshot of some of these findings, taken from our recent study:

• Past three month online banking activities has grown in the past year among online Canadians.
• While still niche, mobile banking adoption is growing.
• Overall satisfaction rates with online banking at one's primary financial institution continues to decline.
• Online Canadians are increasingly paying their bills directly at the website of the companies with whom they have accounts.
• The above finding appears to be coming at the expense of paying bills through an online bank, which has declined significantly in the last year.
• Confidence in the security and privacy of online banking is at an all-time high.
• Significant interest is shown in a system that would email or text a customer if an unusual charge was made on their debit/credit card.

The above is based on the findings of an Ipsos syndicated study, The Ipsos Canadian Inter@ctive Trends Report, fielded April 30 - May 4, 2012 and released in 2012-Issue 2. This online survey of 843 Canadian adults was conducted via the Ipsos Online Panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted probability sample of this size, with a 100% response rate, would have an estimated margin of error of +/- 3.4 percentage points, 19 times out of 20.

The Ipsos Canadian Inter@ctive Trends Report has been tracking online behaviour and identifying trends since 1995, and is the longest running and most comprehensive, authoritative study of the Internet in Canada. Click here to learn more about the report, or to subscribe.