'Net News Newsletter

Large Banks Overtake CUs for 1st Time in Satisfaction
Online banking services from large banks increased in consumer satisfaction by 5 points in 2011, overtaking credit unions for the first time. "But at the end of the day, credit unions are facing some challenges. Because of the consolidations that have taken place, large banks have become more focused on the customer than they were before. And as they deploy new channels, such as mobile channels, the bar is being raised for credit unions to keep up," said Larry Freed, CEO of ForeSee Results and author of the online banking satisfaction report. The report found that online banking satisfaction matters to financial institutions because consumers who are satisfied with their institution's online banking are 63% more likely to trust their institution and 56% more likely to be satisfied with their overall relationship with their financial institution. The institutions making increased investments in online banking today will reap the rewards of higher consumer satisfaction next year.
Source: CU Times, May 19, 2011

Relationships & Revenue At Risk Online
Consumers' rising demand for personalized online services puts relationships and revenue at risk for those institutions that don't meet their consumers' demands. "Bank customers have started to demand that their banks' online offerings keep up with the times," writes Jacob Jegher with research firm Celent. "This channel, however, requires a lot of attention. If banks don't act swiftly, they risk critical customer relationships and revenue..." Jegher continues. Personalized online experiences at other sites have increased consumer demand for online services personalized to their needs. Leading credit unions and banks are satisfying this consumer demand by launching different online banking templates for specific consumer segments. In addition, leading institutions put the control in their consumers' hand to determine where on the screen they want the different online banking modules.
Source: Celent, June 1, 2011

Big Life Changes Lead to Product Purchases
Banks and credit unions can increase their product sales by identifying and marketing to consumers who are experiencing a big life change like getting married, moving or retiring. For example, consumers who got married in the past year are 60% more likely to purchase a financial product than those who have not. Credit unions and banks can analyze their consumer spending data to find consumers who have purchased from a bridal boutique and put a large deposit on a reception hall to identify consumers who are likely about to get married. Armed with this information, financial institutions can upload the list of consumers to their online banking site to target these consumers with the perfect product offer for someone about to get married.
Source: Forrester Research, June 3, 2011

Smartphone Market Now Bigger Than Personal Computers
Smartphones sales have now surpassed sales of personal computers, but are banks and credit unions keeping up with their consumers? 101 million smartphones were shipped worldwide in Q4 2010 compared to only 92 million personal computers. Sales of smartphones grew 87% over the prior year, while sales of personal computers only grew 3%. The consumer shift to increasingly using their mobile phone to live their lives: manage their calendar, look up directions and pay their bills has huge implications for financial institutions' ability to satisfy their consumers. When institutions think about what their consumer experience is like on their website, they must think about the experience when accessed from an Android, iPhone and personal computer.
Source: Financial Times, February 8, 2011

Gen Y Differences Will Transform Payments
Members of Generation Y (born between 1979 and 1999) grew up in a fast moving mobile world that gives them very different payment preferences than other generations. Companies must adjust to ensure that they can serve Generation Y. Growing up in a world where news has always been real-time and their phone has always been in their pocket, members of Generation Y are predisposed to making payments differently than generations that have adopted real-time and mobile technologies later in life. Primary research conducted by Javelin Strategy & Research identified the key experiences that will be necessary for serving tomorrow's customers. They have found that companies should work towards creating consumer experiences that are: always-on, real-time, transparent, customer-controlled, integrated, safe and goal-fulfilling. Mobile bill pay is a great example. Mobile bill pay allows customers to be alerted they owe a payment, view their amount due and quickly pay their bill no matter where they're located without having to worry about security.
Source: Javelin Strategy & Research, May 24, 2011