Computerworld - The good news for banks courting online customers is that consumers have greater confidence in banking on the Web compared with visiting a branch. They also like the convenience and the privacy online banking offers.
The bad news is that they can be fickle and unforgiving.
According to the 2005 Privacy Trust Survey for Online Banking conducted by Ponemon Institute, only one privacy breach would cause 57% of customers with a high level of trust in their banks to take their business to a competitor (see chart).
The Web-based study, sponsored by Watchfire Corp., asked more than 2,300 adult Internet users to indicate how confident they feel that their primary bank is committed to protecting the privacy of personal information. More than 70% of respondents strongly agree or agree that their bank or credit union is committed to protecting their personal information. The study was launched in February and completed in March.
More than 71% of respondents said their top reason for banking online is convenience. More than 59% of respondents who use online banking services state that they have more confidence in online banking than branch banking.
Combining convenience with confidence is an appealing offering from financial institutions. As our study showed, a majority of respondents (51%) do bank online. This is not surprising considering 58% reported that they spend from 10 to more than 20 hours each week online.
The most common Internet banking activity is viewing statements online (77%), followed by making payments on bank products such as credit cards or mortgages (51%). The least common activities are making a service request online or viewing statements online instead of having them mailed (i.e., it appears that most people like getting hard copies even though they view the same document online). Our research also showed that respondents who indicated they have a high level of trust in their banks are more likely to make payments online, transfer money and download account information into spreadsheets or accounting software such as Quicken.
Allay Consumers' Fears
Consistent with Ponemon Institute's other Privacy Trust studies, the biggest fear consumers have is identity theft (82%), followed by unauthorized access to their bank accounts and telemarketing abuse. Eighty percent of respondents said that the privacy of their personal information is very important or important to them.
Based on these findings, banks should address the online security of their Web sites and provide information about the measures customers can take to protect their financial assets. Banks should clearly communicate their commitment to protecting the privacy of their customers and provide information on how consumers can contact the bank with questions or concerns.
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