Financial institutions offer a variety of services and features to help improve their customers’ banking experience. But which of these features actually play a deciding role in which bank or credit union consumers choose to do business with? According to the most recent NTRS study, about two-thirds of consumers consider online banking a critical service that their bank must offer (64%), yet over half still require that their financial institution provide free ATMs (56%) and branches (52%) in the areas where they live or work.
In line with that, 9 in 10 consumers use financial institutions that have branches within driving distance of where they live or work and only 12% of consumers’ primary bank or credit union don’t have any physical branches in their area. Online banking, free ATM transactions in the area, better rates than other banks with branches in the area, and online bill paying are among the top reasons a consumer would consider using a financial institution that does not have branches or offices near them.
Unsurprisingly, as credit card fraud and data breaches become more prominent , security features such as the ability to quickly lock and unlock a debit card if lost or stolen, and the ability to manage and customize security alerts are also taken into account when consumers commit to a bank or credit union. Likely related to monitoring accounts, having access to credit scores without impacting their credit report is desirable to half of consumers (50%), but not nearly considered as critical (24%). Similarly, call centers with available live agents and online customer service via email or chat are desirable features for consumers deciding on a financial institution to use.
For younger consumers, the ability to transfer funds to other banks/people is important to about half (52%), yet only 14% use Zelle and 3% use Popmoney, the Person to Person (P2P) services mainly affiliated with banks. The latest results of the NTRS study corroborate that while PayPal is the largest P2P service, Venmo is the second most widely used, especially among millennials . This indicates that financial institutions need to better promote their P2P services to their customers, much like the Personal Finance Management (PFM) tools that are offered by banks but underutilized by customers. Six in ten consumers are unsure whether their bank even offers a PFM tool and 60% of the 18% who are aware of the PFM tool offered by their bank, don’t use it because they believe they do not need it.
While most of the online services offered by financial institutions are in fact features considered critical by consumers, consumers still value the traditional presence of local branches in their area. However, there are signs that this is slowly changing if banks and credit unions are willing to meet consumers’ needs when it comes to banking with a financial institution that doesn’t have a branch in their area. Banks and credit unions also have an opportunity to increase their customer’s awareness of the innovative services they offer and elaborate on how they can benefit from these services.
About the Study: The National Technology Readiness Survey is conducted by Rockbridge Associates, Inc. and A. Parasuraman, and has tracked technology and e-commerce trends since 1999. The survey is co-sponsored by the Center for Excellence in Service at the Robert H. Smith School of Business. The most recent wave is based on an online survey wave of 1,053 U.S. adults sampled at random from a consumer research panel in May 2018.
Written by: Wisaam Nubani, Research Analyst and Hilary Ross-Rojas, Research Director