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May 11, 2012

Big opportunity for banks to use Web to communicate, survey shows

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Africa|Capitec|Columinate|First National Bank|Africa|South Africa|Bank|Basic Banking Functions|Internet Banking|Internet Banking Facility|Internet Banking Offerings|Internet Banking Solution Providers|Investigated Online Banking|Online Transacting|Product|Retail Bank|Scope Internet Banking|Limits
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africa-company|capitec|columinate|first-national-bank|africa|south-africa|bank|basic-banking-functions|internet-banking|internet-banking-facility-industry-term|internet-banking-offerings|internet-banking-solution-providers|investigated-online-banking|online-transacting|product|retail-bank|scope-internet-banking|limits
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Banks in South Africa have a significant oppor- tunity to connect more closely with Internet banking users to facilitate communications and use of the full scope Internet banking and online transacting, says market research company Columinate cofounder and senior research specialist Henk Pretorius.

The company has released the results of its SITEsfaction survey of 1 353 users’ views of investigated online banking in South Africa.

“The survey results show that very few Internet banking customers currently use this electronic medium for more than basic banking functions and, with only 24% of users saying they use their Internet banking facility to communicate with their bank, this represents an opportunity for banks to find ways to better connect digitally with their customers,” says Pretorius.

Responses reflecting the overall satisfaction of customers with their Internet banking offerings revealed that there was room for improvement as the industry SITEisfaction score was an unexceptional 55. Against this backdrop, retail bank First National Bank (FNB) scored best on the SITEisfaction index with a score of 68.

However, while retail bank Capitec’s SITEisfaction score (70) actually trumped FNB’s, the number of Capitec customers included in the survey did not reach the mini- mum sample size to be included as a contender for the position of Internet banking SITEisfaction winner. That said, Columinate points to Capitec’s top score as a clear indicator that the bank is worth watching as a “rising star” among South Africa’s Internet banking solution providers.

“Regardless of the reasons for this reticence by customers to fully engage with their banks online, or use their Internet banking for anything more than basic functions, these issues could be limit- ing the ability of banks to capitalise on the full potential of their digital channels,” emphasises Pretorius.

In support of this deduction, he points to survey findings that a mere 28% of users say they log in to their Internet banking pages to obtain information on financial product offerings or account options. This figure drops even more when it comes to managing their bank accounts, with 27% saying they use Internet banking to apply for overdraft or withdrawal limits, 19% to issue electronic stop payment instructions, 17% to apply for a loan of any sort, and just 15% using Internet banking to manage their investment accounts online.

The research also looked at Internet Banking behaviours to contextualise the SITEisfaction scores and some interesting findings emerged. It found that basic transactional and nontransactional activities top the list of typical uses of Internet banking channels, with 88% of respondents indicating that they use Internet banking mainly for viewing balances and making bene- ficiary payments. Accessing bank statements (72%), making interaccount transfers (66%), and setting up recurring beneficiary payments (53%) were the next most popular Internet banking transactions.

Some 53% of users also indicated that they use Internet banking to buy their cellphone airtime, while a mere 5% of those surveyed make use of online share trading or foreign exchange services.

“Most users have yet to fully harness the potential of their online banking facilities,” he concludes.

Edited by: Martin Zhuwakinyu
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