High-street banks have come under relentless criticism this year over the level of their customer service, from interest rates and the closure of counters, to the security of new Internet services.
Against this background, design and brand identity consultancy Elmwood commissioned a survey of 1,000 consumers nationwide to assess their attitudes to banking.
Despite the huge online investments made by offline banking brands, the survey, carried out by BMRB, shows that 42 per cent of respondents prefer a traditional face-to-face relationship, and that one in six have serious concerns about security issues.
Of those respondents who enjoy a satisfactory relationship with their bank, 70 per cent of women, and 50 per cent of men, have no interest in banking online. Elmwood believes this shows that customers want a personal service, and that despite the continuing development of e-commerce and advances in technology, online transactions are still perceived as carrying an element of risk.
The survey reveals that banking brands should be making a greater effort to reassure their customers, and that this should be reflected not only in customer relations, but also in corporate branding and literature.
As regards the WAP revolution, an overwhelming 70 per cent of respondents say that even if they had access to the required technology, they would not use a mobile phone to do their banking. Also, consumers are aware that as an emerging technology, WAP cannot yet compete with full Internet connection.
Although people may be prepared to dabble with WAP to check out Madonna’s latest album, apart from a few early adopters, the same does not apply to banking.
Not surprisingly, the new online banking brands also scored low in gaining consumer confidence and recognition. For example, 61 per cent of respondents said they would be happy to buy a mortgage from the Halifax, yet only ten per cent would consider using IF, Halifax’s online mortgage service.
Forty-four per cent of respondents would buy a mortgage from Barclay’s, yet only 14 per cent would have approached B2. Less than one in ten would buy a mortgage from Marbles, while 13 per cent would go with Smile, 19 per cent with Goldfish, and 23 per cent with Egg.
The evident distrust of Internet security and the penetration of Internet usage among the banking population are not the only issues at play. Introducing a new brand into the market is challenge enough – but introducing a new brand in a relatively new medium, such as the Internet, raises the stakes even higher for the brand owner.
But brand names may also be causing a take-up problem with brands such as IF and B2. Elmwood believes consumers want reliability and good service, and are unlikely to be swayed by flashy TV ads and trendy appeal.
Although one in two customers felt their bank was more concerned with making profit than giving value for money and good service, respondents did reveal a willingness to buy a host of new products from their chosen banking brand.
For example, 61 per cent would be happy to buy RAC or AA-type car insurance cover from their bank. Also, complete bank-branded moving packages, which include transferring or arranging mortgages, electricity gas and water supplies, home insurance, security systems and home removal services, received the thumbs up from 61 per cent of those surveyed.
Surprisingly, almost half of the survey group would consider buying a foreign holiday from their bank, while 40 per cent would seriously consider purchasing a bank-branded mobile phone. One in three would also consider buying a bank-branded computer.
The fact that people are willing to buy a greater range of products from their bank reveals that despite some basic dissatisfaction, they are still willing to trust the brand.
That banking brands have this level of trust, enabling them to stretch their product portfolio, will be welcome news to bank marketers, who are not gaining an online foothold as quickly as they might have hoped. However, the bad news is that Elmwood’s survey also reveals that the customer is more than willing to consider other companies for their banking needs.
Consumers have become used to the idea of banking with brands such as Sainsbury’s, so it is not surprising that 71 per cent of respondents said they would be happy to bank with the Post Office, 41 per cent with telecom giant BT, and over a quarter with Microsoft or Orange. Brands such as Gap or Rover were less popular, with only 13 per cent prepared to trust them with their money.
Factfile is edited by Julia Day. Jayne Barrett, Elmwood head of corporate consulting, contributed