Nov 4, 2010

Canadian customers still keen on branches, Empathica survey finds

By Robin Arnfield, News Editor

For routing banking transactions, Canadian consumers’ preferred financial channel is the Internet. But customers vastly prefer to be able to talk to someone, preferably at a branch, when they have a problem with their accounts or if they need to make a major transaction, according to research by Mississauga, Ontario-based Empathica.

For its Q2 2010 Empathica Consumer Insights study, the customer experience management advisory firm surveyed 15,000 Americans and Canadians, asking them about their preferred banking channels, confidence in each channel and bank loyalty factors.

For routine transactions, 49.4% of Canadian consumers told Empathica that their preferred banking channel was the Internet. This was followed by branches at 25.9%, ATMs at 21.0%, and fixed-line telephone and mobile phone at 2.6 % and 1.1% respectively.

Yet, when a problem arose, consumer preference drastically shifted.

Consumers most often wanted to speak with a human being when they had an account issue. Empathica says that 66.9% of Canadians cited a desire to visit a branch with a banking problem, while 27.2% preferred using the phone. Only 5.5 would prefer to resolve  their issue online.

For a major transaction such as applying for a loan, 85.2% of Canadians would go to a branch, while 11.9% would go to the bank’s website, and just 2.4% would pick up the phone.

“Connecting with consumers in a one-on-one manner can drastically influence bank loyalty,” says Dr Gary Edwards, Empathica’s EVP of client services. “The importance of this is compounded during problem resolution. If you can quickly address a consumer’s concerns, they are more likely to be loyal to your bank than a consumer who never voiced any concerns at all.”

Edwards says that banks are understandably very concerned as to whether customers will recommend them to other consumers. “This leads to banks constantly carrying out customer satisfaction surveys to find out how good their clients’ experience is,” he tells Payments Business.

In one top five Canadian bank, for example, a routine call to a contact centre can lead several hours later to a third-party firm calling the customer to ask how their experience with the call centre was.

“The problem is that not all customer transactions are equal, and a client’s satisfaction rating for a routine online banking transaction is not going to have the same validity as their rating of a major product purchase, such as a mortgage,” Edwards says. “Trying to use the same criteria to rate all of a customer’s banking experiences in terms of satisfaction is not really a good idea. You cannot measure a customer’s satisfaction just by their experience of web banking, for example.”

Edwards comments that the banking “went away from branches for a while, and now we as an industry have gone back to branches. People still really like to visit the branch, especially when they have a problem and need to talk face to face with someone to sort it out. The branch is the place to go when you have a problem or want to make a major transaction or product purchase. You wouldn’t use web or mobile banking or mobile to get product advice.”

Edwards says that despite the very low levels of mobile banking usage indicated by Empathica’s survey, he still sees a future for the wireless channel. “Very few people in Canada and the US use mobile banking, but those who do, really trust the medium and like it,” he says.

One of the barriers to take-up of mobile banking is consumers’ concerns about privacy and security, Empathica found. “Internet banking went through the same hurdles with privacy and security concerns,” says Edwards. “The more mobile technology is developed, however, the more you’ll see consumers using their mobile device for banking. Right now it’s just not at a stage where consumers trust device security, but the mobile channel will certainly play an important role in the future.”








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