Online Banking: Who's logging on?
In September 2001, a Nielsen NetRatings report placed Australia at the forefront of the global race for online banking acceptance. According to the research, Australia topped the world when it came to online banking adoption rates, with take-up increasing by 50 percent across the market.
While this is good news for banks still waiting to see a return on their investments in online infrastructure, it is even better news for customers, as the increased competition drives continual improvements in online offerings and service levels.
Adir Shiffman, founding director of commercial Web site analysts Global Reviews, points out that the last 12 months have seen a dramatic increase in functionality offered by most online banks.
"Most of the banks have made significant improvements to their online services, and as a result we are seeing a wider demographic of users," Shiffman says. "What we have seen proves that as they make services more usable, the uptake of customers improves."
Improved it has, with banks across the spectrum reporting significant increases in the sheer size and level of activity of their online customer base. Whilst scaling up its services throughout 2001, St George experienced a three-fold increase in its user base. Similarly, Suncorp Metway is reporting a 25 percent increase in users since the launch of its latest version in September of the same year.
Detailing Westpac's online experience, Kevin Powell, head of personal banking for e-business, sums up how the industry has changed through the last year.
"Twelve months ago, all you could do was see your balances, but now we offer an entire branch online," Powell says. "In fact [customers] now have far more access to our investment products."
It is this diversification of services that is leading to a shift in terms of the online customer base. According to many in the industry, the initial trend of high-value customers migrating online has been overtaken by a wave of high-volume customers seeking highly functional sites.
Alexandra Harry, personal bank Internet manager with St George, points out that although online banking was initially marketed towards a younger audience, increasingly functional sites are attracting 'mum and dad' customers.
"Young people, students and so forth, only really need an ATM machine, because their banking requirements are not very complex - they don't need to log on to do very much," Harry explains. "We are finding a big increase in the 'nesters' - people who have just moved out of home, or have just bought a house and have bills to pay."
While many suggest an increasing incidence of branch closures and staff cuts by most Australian banks is forcing customers to use alternative mediums - such as the telephone and Internet - to conduct their banking, Andrew Watts, head of remote banking at Bendigo bank, has witnessed a diversification of online customers, saying that functionality and flexibility are encouraging people online.
"I couldn't pin down a particular demographic," Watts says. "We have a whole range of customers using services. Eighty-four percent of our transactions are now done outside of our branches and a growing amount of those are going on online."
Why didn't you include Adelaide Bank (http://www.adelaidebank.com.au)? It provides a good range of services with the exception of not being able to credit someone else's account quickly.