New Survey Shows How Seamless Security Can Boost Customers’ Usage of Online Banking
By Leor Melamedov
Everyone must bank digitally, but many customers still have issues with ease and security
Lightico surveyed 1,329 Americans in July 2020 to assess their levels of ease and trust in their banks’ online banking. We found that despite the widespread usage of digital channels during the coronavirus era, many consumers continue to view in-person banking as the most secure channel. The findings suggest that banks that want to accelerate uptake of a wider variety of digital banking transactions will need to implement intuitive, complete, and digital processes that reduce consumer fear and confusion.
Customers Are Eager For Online Banking
Consumers have plenty of opportunities in their daily lives to engage in different online transactions. From ordering groceries to filing for insurance to booking appointments at government offices, completing activities online has never been so simple or prevalent. This is especially true in light of the coronavirus, which has led institutions, companies, and customers to see digital as the default rather than a nice-to-have alternative.
The coronavirus has all but made in-person banking a last resort for both customers and agents alike. Many banks have invested significant resources in transitioning to remote services, and are heavily advertising those options. Most obviously, the purpose of doing so is to safeguard the health of agents and customers, who continue to fear virus transmission even as governmental restrictions are lifted across the country.
At the same time, customers are in no rush to return to the physical branch, even once the threat of the virus fades away. 55% of customers say that they will visit their bank less often in the future, and 26% say they will try to avoid in-person banking altogether. These dramatic findings suggest that the coronavirus lockdowns enabled customers to grow more confident with online banking.
Banking customers are clamoring for online banking; an unbelievable 79% of respondents say they want their banks to serve them with “more all-digital processes” going forward.
It makes sense: Why should customers drag themselves to a physical branch, which requires them to be in a particular place within a limited time frame, when they can receive instant service from the comfort of their computer or mobile phone?
Yet Financial Digital Interactions Are Seen As Most Sensitive
At the same time, our survey found that consumers overwhelmingly consider online financial and banking transactions to be far more sensitive than other types of online transactions, such as online shopping, healthcare, and insurance.
This is the dominant perception across all income groups we surveyed, but particularly among higher-income individuals, of whom 70% say that they are the most sensitive type of online interaction. Considering that by and large, this is the group banks are most eager to court, banks must acknowledge and accommodate these sensitivities.
Furthermore, the fact that customers are more open to digital processes than ever before doesn’t mean they are fully relaxed with conducting all financial transactions online.
In-Person Banking Still Perceived As Most Secure
Consumers are torn: On the one hand, they would love to rely on remote banking transactions thanks to the significant convenience advantages they afford. On the other hand, in-person banking is still widely seen as the most secure.
30% of consumers say they fully trust (choosing “very secure”) the security of their data during in-person transactions at a bank, compared to just 19% who say the same about online transactions.
What this disparity suggests is that customers may be very comfortable and even prefer using digital tools for simple tasks, such as checking their bank balance or requesting a new credit card. But when it comes to more involved tasks, such as transferring large sums of money or taking out a loan, they may still choose in-person banking due to the greater perception of security.
Investing in Customers’ Peace of Mind
Banks that invest in digital infrastructure for more complex banking tasks may not be receiving the ROI they were hoping for.
If customers don’t feel that their online banking options are secure, they may postpone the transaction. They may also have an increased probability of switching over to a bank that they trust to provide the secure online banking experience they seek.
If customers continue to see in-person banking as the gold standard for security, they will “suck it up” and head over to the local branch when they need to conduct these higher-stakes, sensitive tasks.
Considering the cost and efficiency advantages of transitioning to online banking, this represents a missed opportunity for banks.
Banks that want their customers to feel comfortable with online banking for a wider range of activities will need to ensure security features are visible. For example, site seals, security logos such as an SSL certificate, and clear, contextual explanations of security guarantees before the activity will reassure customers that they are in good hands.
Ease is No Less Important Than Security
All the security features in the world won’t promote online banking if those features defeat the very purpose of digitization: convenience and ease-of-use. That’s why whenever possible, banks should incorporate low-touch security measures such as biometric fingerprints, facial recognition, and encrypted digital signatures.
Customers Need Easier and More Secure Online Banking
The coronavirus has accelerated long-standing digital trends in banking. But to ensure that customers trust online banking for all their needs, and not just rudimentary transactions, banks will need to ensure security measures are visible as well as non-intrusive. The most advanced automated and AI-based security features should be integrated seamlessly into customer journeys, ensuring online banking fulfills its original promise of ultimate convenience.
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The coronavirus has all but made in-person banking a last resort for both customers and agents alike. Many banks have invested significant resources in transitioning to remote services, and are heavily advertising those options. Most obviously, the purpose of doing so is to safeguard the health of agents and customers, who continue to fear virus transmission even as governmental restrictions are lifted across the country.
At the same time, customers are in no rush to return to the physical branch, even once the threat of the virus fades away. 55% of customers say that they will visit their bank less often in the future, and 26% say they will try to avoid in-person banking altogether. These dramatic findings suggest that the coronavirus lockdowns enabled customers to grow more confident with online banking.
Banking customers are clamoring for online banking; an unbelievable 79% of respondents say they want their banks to serve them with “more all-digital processes” going forward.
It makes sense: Why should customers drag themselves to a physical branch, which requires them to be in a particular place within a limited time frame, when they can receive instant service from the comfort of their computer or mobile phone?
At the same time, our survey found that consumers overwhelmingly consider online financial and banking transactions to be far more sensitive than other types of online transactions, such as online shopping, healthcare, and insurance.
This is the dominant perception across all income groups we surveyed, but particularly among higher-income individuals, of whom 70% say that they are the most sensitive type of online interaction. Considering that by and large, this is the group banks are most eager to court, banks must acknowledge and accommodate these sensitivities.
Furthermore, the fact that customers are more open to digital processes than ever before doesn’t mean they are fully relaxed with conducting all financial transactions online.
Consumers are torn: On the one hand, they would love to rely on remote banking transactions thanks to the significant convenience advantages they afford. On the other hand, in-person banking is still widely seen as the most secure.
30% of consumers say they fully trust (choosing “very secure”) the security of their data during in-person transactions at a bank, compared to just 19% who say the same about online transactions.
What this disparity suggests is that customers may be very comfortable and even prefer using digital tools for simple tasks, such as checking their bank balance or requesting a new credit card. But when it comes to more involved tasks, such as transferring large sums of money or taking out a loan, they may still choose in-person banking due to the greater perception of security.
