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Paperless checking: new to online banking
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Off- or online, customer service still key
As consumers become more comfortable with managing their finances online, institutions will add more products and services to their lineup, in part to keep customers from chasing rates. And, while paperless checking may be unique to online institutions at this point, online banks are looking more like their brick-and-mortar counterparts.
"I think, in the online world, what catches people's
attention is product attributes, so in deposit accounts the rates
certainly get people's attention," says Joel Bosch, executive
vice president of retail banking at E-Loan. "To some degree,
(institutions) that come out with the very high teaser rates may
get more customers initially because of that than they otherwise
would. But switching banks is easy, and if you're not going to provide
consistent service, (rates) won't be sufficient. Increasingly, customers
are looking for the same level of service online as they get in
the branch."
The brick-and-click situation
What may work best for most consumers is a brick-and-click situation.
Eckenrode notes that some products, such as checking, savings and
credit card accounts, lend themselves very well to an online environment.
For other services such as mortgages, people seem to prefer to sit
down with someone to fill out an application. That said, the number
of people who refinance their mortgages online is growing. Eckenrode
suspects that those people already understand the mortgage process
and are driven by rates.
"We've done some surveys," Eckenrode says,
"that suggest that 85 percent of customers who are active online
banking users will visit a branch in any given month -- which really
points out that people are multichannel users. Citibank will tell
you that two-thirds of their online customers do not walk into a
branch or use a call center in any given month. So, they're much
more oriented toward self-service via the Web."
Eckenrode says this evolution of online banks, the products and services they provide, and the growing number of consumers who use them may alter the dynamics of online banking. While high-yield products will still be "an arrow in the quiver," convenience and service capabilities will be much more important in attracting customers.
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