It seems like every day there's another reason to switch to online banking. A recent report by Javelin Strategy and Research and the Better Business Bureau found that banking online may protect you from identity theft. Now, a new report finds that paying your bills online could actually be more satisfying, too.
"Basically, the Web is a great device for making people's lives easier," says Larry Freed, president of ForeSee Results and author of the new report about online banking and customer satisfaction. "That's what online banking does."
Banking and Bill Paying
Convenience may be one reason that customer satisfaction with online banking is on the rise: Satisfaction with online banking services is up 5.5 percent since last year, according to the new report, which was jointly produced by ForeSee Results and Forbes.com. Additionally, those who pay their bills online are more satisfied not only with online banking in general, but with their banking institution in particular, the report finds.
Betty Reiss, a spokeswoman for Bank of America, says that the company's internal studies have yielded similar results. Customers who pay their bills online remain with the bank longer than those who do not, Reiss says.
"We have seen phenomenal growth in our [online] service," Reiss says. According to her figures, in January 2005, 6 million of Bank of America's 12.6 online banking customers were paying their bills online--compared with 3.4 million online bill payers out of 7.5 million online banking customers in January 2004.
Reiss attributes the growth to the convenience of online bill paying.
"What we've seen is somewhat of an evolutionary process," she says. Bank of America has found that most customers start online banking by using it to look at their account information; then they move to transferring funds between accounts, she says. Finally, "they'll try the online bill paying. Now, we're starting to see people more and more receiving their bills electronically," she says.
Security Risks: Perception vs. Reality
Fear of identity theft and concern for the security of their information prevent many customers from banking online. "Potential customers [of online banking] 'perceive' that there are privacy concerns, yet current online banking customers do not," the report states.
People who use online banking are generally satisfied with the level of security, Freed says. The problem for those who do not bank online is "more of an education issue than anything else," he says.
Reiss agrees. "We've seen that perception [of risk] decrease when people are actually online doing their banking. The system on our end is highly secure."