OPTIMIZING SELF-SERVICE BANKING (March 2017)

Branches and Online Channels

Account Management, Customer Service, and Sales

Terminals, Devices, and Technological Innovations

Key Finding from a Previous Phoenix SYNERGISTICS Research Survey:

According to the 2014 Phoenix SYNERGISTICS study, The Era of Self-Service Banking, most consumers felt that branch automation should make it easier for branch staff to serve customers, while fewer felt branch automation should make the branch more self-service for customers.  Have these attitudes shifted over the past two years?

  F251 Prop Graphic

Highlights of the Study

This study examines the consumer experience with self-service banking, including in-branch options and online and mobile banking.  Consumer reaction to various technological innovations is evaluated as well.

National Internet Survey – The survey will include 1,000 online interviews with consumers age 18 or older.

Key Dates

December 23, 2016 – Charter fee/Intro pricing ends.

December 23, 2016 – Final acceptance of comments on questionnaire.

March 2017 – Project Report available.

Strategic Questions

  • What is the general day-to-day approach of consumers to self-service activities? Which types of activities do consumers have experience with – such as using self-checkouts at retail stores, placing orders at self-service kiosks in restaurants, or checking in for airline flights using computers or mobile devices?
  • What is the role of ATMs in self-service banking and financial activities? How widespread has ATM deposit making become?  Will consumers adopt advanced activities and functions at ATMs or other self-service terminals?  Are advanced functions regarded as appropriate for regularly-used ATMs or for specialized terminals?
  • Are consumers receptive to real-time videoconferencing with bank representatives? Is there a preference for doing this on certain devices?  Is this a potential account acquisition channel?
  • What will be the impact of consumer usage of self-service activities on branch automation and configuration strategies? How will branch traffic patterns change in response to wider adoption of self-service alternatives?
  • How do customers view their own comfort level in using automated or self-service technology for financial activities? Are there segments who will not adopt self-service devices or functions?  What perceived disadvantages exist that might be barriers to adoption of self-service – such as distrust of technology, a desire for human interaction for some activities, or a reluctance to assume responsibility for decisions or actions?
  • Is there a relationship between online and mobile financial activities and the broader adoption of self-service financial activities? Do certain activities – such as mobile RDC or mobile access to ATMs – enhance or compete with terminal or kiosk-based self-service activities?
  • Is an orientation to or usage of certain self-service devices and systems a basis for segmenting and targeting consumers?  Can behavioral, attitudinal, or demographic traits be used to identify and distinguish these segments?

Research Issues

  • How far along the road to self-service banking are consumers?  Self-service alternatives such as ATMs, kiosks, tablets, and mobile phones have been available for a number of years.  Now, these self-service devices are appearing in branches allowing consumers to conduct transactions easily and quickly so that branch personnel are free to focus on sales of financial products and services.  Videoconferencing terminals located in branches also allow customers to interact with sales specialists in remote locations.  This can be particularly valuable for more complex financial products and services.
  • With all of these new developments, consumers can now perform multiple activities using self-service devices from depositing checks to applying for products and services.  However, for some activities, consumers may use self-service devices along with assisted self-service and full-service alternatives.  Understanding this process is essential in channel integration and branch configuration strategies.
  • Consumers’ willingness to adopt self-service banking may be a result of an overall orientation to self-service in other locations and industries such as grocery stores and airline ticketing.  It may also stem from their desire for time and place convenience.  Whatever the motivation, self-service banking is becoming an essential element as providers develop and implement banking systems and services for the future. [F251]

THE EXPANDING MOBILE PAYMENTS MARKET (Dec 2016)

Mobile Bill Pay, mPOS, and P2P

Fraud and Security Issues

Challenges and Opportunities

Key Finding from the Phoenix SYNERGISTICS Report:

More than half of mobile phone users find some appeal in the concept of biometrics as a means of completing a purchase or transaction.

A89 Prop Graphic

Highlights of the Study

This study examines consumer experience with various mobile payment activities – mobile bill pay, mPOS, and P2P.  Consumer reaction to fraud and security issues as related to mobile payments is also assessed.

 

National Internet Survey – 1,008 consumers age 18 or older.

Key Dates

 

December 2016 – Project Report available.

Strategic Questions

  • How widespread is usage of mobile bill payment?  Which access methods – biller sites/apps or FI sites/apps – are most used?  Do financial institutions face barriers in expanding usage of this service?
  • What is the consumer experience with mobile payments at the point of sale?  At which locations are these types of mobile payments most prevalent?  Are problems being encountered?
  • Have mobile P2P payments gained acceptance among consumers?  Which providers are prominent in this space?  Is there potential for wider adoption?  Are consumers willing to pay fees for immediate funds availability?
  • What experience have consumers had with mobile apps or scanners used by merchants for processing card payments?  Are these devices seen as being secure for payment transactions?
  • Are there benefits or advantages that providers should emphasize to encourage adoption of mobile payments and purchases?  What barriers or objections are impeding growth of this market?
  • What is the “next step” in innovative mobile payments capabilities?  How do consumers respond to biometric identification technology?  Will “wearables” have a place in the mobile payments space?
  • Which demographic or behavioral segments should providers focus on to increase and expand mobile payments activity?

Research Issues

  • According to the Pew Research Center, seven in ten U.S. consumers own a smartphone, representing a wide potential user base for mobile payments. Competition in mobile payments continues to be intense as new players and new services are announced on a regular basis.  Yet even with all the activity and potential in terms of user base, the market is experiencing growing pains.
  • Mobile payments can include a number of activities – mobile bill payment, mobile payment at the point of sale (mPOS), and person to person (P2P) mobile payments.  Mobile payments at the point of sale has seen a great deal of activity. The advent of Apple Pay was one of the most dramatic developments in this space.  Samsung Pay and Android Pay are now available for use by consumers. However, usage of these payment services has met with some difficulty and has not lived up to expectations.  For a number of years, P2P payment services were aggressively marketed, but activity appears to have declined. Mobile bill payment, an outgrowth of PC bill payment, has significant potential and may serve as a catalyst or first step for other types of mobile payments.  In addition, banks may be able to capture new or incremental online bill payment volume, particularly among millennial consumers who have an affinity for smartphones and apps.
  • The mobile payments market is also complex with a growing list of services and systems.  PayPal is a notable player and a major factor in the market. Projections regarding mobile payment users and transaction volume are wide and far ranging.  Some industry observers suggest that the innovators or early adopters have largely been captured and that for the remaining consumers mobile payments is a low priority.  Underlying all of this are consumers’ concerns regarding privacy, financial security, and fraud prevention. In this project, Phoenix SYNERGISTICS will evaluate the current status of mobile payments including mobile bill payment, mPOS, and P2P to assist providers in competing in this expanding market opportunity. [A89]

THE MOBILE BANKING REVOLUTION (Oct 2016)

Transactions, Sales, and Service

Apps and Alerts

Impact on Other Channels

Key Finding from the SYNERGISTICS Report:

Most users still view mobile banking as a secondary or emergency banking method.

A88 Prop Graphic

Highlights of the Study

This study examines consumer experience with mobile banking.  It also assesses consumer reaction to various apps and alerts and the impact of increasing mobile banking usage on other channels.

 

National Internet Survey – 1,008 consumers age 18 or older.

Key Dates

 

October 2016 – Project Report available.

Strategic Questions

  • What types of mobile banking and financial activities are currently conducted by consumers – including accessing account information, transactions, customer service, and account opening?  Is there potential for expanding any activities?  What types of accounts are accessed by mobile phone?  How strong is potential adoption among nonusers
  • What priority do consumers assign to mobile phones as a channel for conducting banking or financial activities – primary, secondary, or emergency only?  How satisfied are users with the mobile services of their financial institutions?  To what extent has mobile activity displaced other channels – such as branch visits, online banking by PC, and ATM usage?
  • Is mobile remote deposit capture becoming a significant deposit making channel in the consumer market?  What is the potential for adoption among nonusers?  How does experience with mobile RDC drive perception of value?
  • What is the relative usage of and preference for apps or browsers when conducting mobile activities and what are the reasons for these preferences?  What types of apps have been downloaded for financial activities and which are wanted?  Would the availability of apps impact the potential adoption of mobile banking?
  • Are mobile alerts – such as for balance information or payment due dates – an important relationship tactic?  Which types of alerts do mobile banking customers currently receive and which are wanted?
  • Which features or benefits are perceived to be important and should be emphasized in marketing communications to expand adoption and increase usage of mobile banking?  What specific concerns or disadvantages are barriers to adoption among nonusers?
  • How should the consumer market be segmented and targeted – in terms of behavioral, attitudinal, or demographic variables – for implementing strategies and tactics to expand and increase usage of mobile banking?

Research Issues

  • The mobile banking revolution is under way.  The rapid adoption of smartphones and tablets is a primary factor in the rapid acceleration of mobile banking.  Financial institutions are caught up in a frenzy of activity promoting their mobile banking programs.  In the midst of all this activity, there are a number of unanswered questions and issues that need to be evaluated.
  • Consumers can perform a vast array of informational, transactional, customer service, and sales activities with their mobile devices.  It is important to assess the types of activities currently performed as well as those that they would like to do. Usage of mobile bill payment also needs to be measured. Consumers have the option of conducting mobile banking via apps or browser-based platforms.  What additional mobile apps are attractive to consumers? Is mobile RDC a valuable service? Alerts can be provided for a number of purposes. Mobile banking is growing but consumers may not be abandoning PC banking.  Mobile banking may be used in conjunction with PC banking, with mobile banking serving primarily as an emergency or secondary method.  It is important for providers to evaluate the relationship of these online channels to each other and to other channels such as branches.  Privacy and security remain important concerns in the mobile space.
  • There is no doubt that mobile banking is a major component of online banking strategies. The role it will play is still emerging.  This report will provide up-to-date information to help providers compete in the mobile banking revolution. [A88]

OMNI-CHANNEL STRATEGIES FOR FINANCIAL SERVICES (May 2016)

Integrating Traditional and Digital Channels

Account Management, Service, Sales

Branches, ATMs, Mobile and Online

Key Finding from the Report:

Results from SYNERGISTICS 2014 study, Maximizing Online and Mobile Banking, found that PC banking is being used by many consumers alongside traditional channels such as branches and ATMs.  Mobile and tablet banking continue to grow in popularity.

F242 Prop Graphic

Highlights of the Study

This new study evaluates consumer usage of various channels – from traditional branches and ATMs to online and mobile methods. It will assist providers in maximizing their omni-channel programs.

 

National Online Survey – 1,000 consumers age 18 or older.

Key Dates

February 26, 2016 – Charter fee/Intro pricing ends.

February 26, 2016 – Final acceptance of comments on questionnaire.

May 2016 – Project Report available.

Strategic Questions

  • What is the current channel usage profile of consumers for accessing their financial accounts and services for information and conducting transactions? Are there patterns of usage in terms of dominant versus secondary channels?  Does this vary by type of activity?
  • Are consumers satisfied with the channels available from their main provider for accessing their accounts and services? What problems or issues should be addressed that may be impacting customer satisfaction?
  • What is the evolving position of the branch in relation to other channel alternatives? Is it becoming complementary or supplementary?  In what situations may the branch still have a dominant role?
  • Are there strategies for reinvigorating the position of ATMs as a channel with innovations such as ATM receipts by email and mobile access? Is usage of the ATM the primary branch activity for some segments of consumers?
  • How do online banking activities – by PC, mobile phone, or tablet – impact and interrelate with other channels, particularly the branch? To what extent are mobile and tablet banking primary online channels for some customers?
  • How are various channels used for account acquisition? To what extent are consumers reactive or proactive in obtaining information? How does the preferred application method vary with type of product?  How do channel patterns vary in terms of customer service and problem resolution?
  • How do consumers’ channel usage patterns relate to other behavioral and demographic indicators that may be useful for segmentation and targeting?  Is the number or variety of access methods used reflective of financial complexity and attractiveness.

Research Issues

  • Today, consumers can interact with their financial services providers using a multitude of channels.  There are the traditional channels associated with financial activity including the branch, telephone, mail and ATMs.  Online PC methods are among the most popular ways for consumers to conduct financial activities. The mobile channel is growing in acceptance particularly among millennials. Social media, video and financial apps add new dimension to the expanding array of channels and services.
  • Consumers often use a mix of channels for simple transactions, customer service activities, and for shopping and obtaining financial products and services.  Consumers may read about a financial product online, text or email someone to find out about the product, and then purchase the product in person at the branch.
  • As a result, providers are faced with the challenge of developing integrated omni-channel strategies in order to meet the needs of today’s consumers who expect to perform financial activities when, where, and how it is most convenient for them.  Information content and the consumer’s experience need to be consistent across channels.  Channel usage may vary based on the type of financial product.  In order to develop a comprehensive omni-channel strategy, it is essential to examine consumer behavior, needs, and expectations. [F242]

RESHAPING THE ROLE OF THE BRANCH (Mar 2016)

From Transactions to Sales

Approaches to Staffing

Branch Size and Functions

Key Finding from the Report:

Results from SYNERGISTICS 2014 study, The Era of Self-Service Banking, found that tellers and other personnel are widely used during branch visits.  However, ATMs are also being used extensively at branches.  Are consumers ready to accept ATMs as a replacement for tellers at branches?

F241 Prop Graphic

Highlights of the Study

This study evaluates branch usage patterns, improvements and innovations, as well as the role of branches going forward.  It will assist providers in identifying strategies for positioning, redesigning and configuring branches.
National Internet Survey – 1,000 consumers age 18 or older.

Key Dates

December 18, 2015 – Charter fee/Intro pricing ends.
December 18, 2015 – Final acceptance of comments on questionnaire.
March 2016 – Project Report available.

Strategic Questions

  • What is the position of the branch as a consumer contact point in terms of frequency of overall monthly visits? How does this vary between inside visits, drive-up visits, and other purposes?  How important are convenient branches as a provider selection factor?  What types of activities are performed at branches?  How important is the role of branches in initial account acquisition and further cross-selling?
  • Has consumer branch usage increased, decreased, or stayed the same in the past five and one year periods? How have other channels – such as ATMs, online banking, and mobile banking – impacted branch activity?
  • What are the reasons or motivations some consumers use branches instead of other available – and potentially more convenient – channels? In contrast, why do some consumers choose not to use branches?
  • How do consumers view automation and technology in branches – as a means for branch staff to provide better customer service or as an option for customers to perform self-service?  Do customers in general desire future improvements in branch technology?
  • What role do or can alternative facilities play in meeting consumers’ needs for branch contact?   How widespread is usage of in-store branches and online direct banks?   What is the potential for self-service kiosks?  Does video conference capability expand the appeal of kiosks?
  • How wide is overall satisfaction with branches among consumers? How important are specific aspects such as transaction speed and accuracy, number and convenience of locations, hours of operation, and staff competence and friendliness? What features, services, or staffing capabilities would consumers see as being improvements at their primary branch?
  • Which consumer identifiers – such as demographic variables, behavioral patterns, or attitudinal traits – are most useful in designing and implementing branch configuration strategies?

Research Issues

  • Branches will remain the heart of delivery systems for many financial institutions. However, it is inescapable that this facility needs to be reshaped for the future.  Consumer branch behavior is changing as check usage declines and usage of remote banking alternatives such as online and mobile banking and remote deposit capture grow.  In this new digital age, providers are faced with the dilemma of how to make branches more efficient and cost-effective, while at the same time improving the customer experience by offering financial advice and consultations.
  • New branch redesigns are emphasizing the advisory, customer service, and sales roles these facilities play in the financial behavior of consumers.  Even technology addicts come to branches when they want to make important financial decisions or open more complex products.  Many providers are employing universal staffing so that one representative can serve the varying needs of customers from advice and sales to transactions.  As an aid in enhancing service at the branch some providers are encouraging customers to make appointments with a banker using their mobile phone.
  • There is also an increasing emphasis on moving routine teller transactions to self-service options such as automated deposit terminals, cash recyclers, videoconference terminals, and enhanced ATMs that perform a variety of new functions from cashing checks to the penny to issuing cards.  What is the reaction of consumers to these self-service or automated options at the branch?  The function or role of the branch is not the only aspect that is evolving – branches are also becoming smaller in size.  Will consumers accept smaller branches with fewer staff and more automation?  This survey will explore consumer reaction to new approaches to branch staffing, function, and size to assist providers in designing cost-effective and efficient branch facilities. [F241]

ONLINE BANKING: THE NEXT STEP (Jan 2016)

PC, Mobile, and Tablets

Enhancements and Apps

Personal Financial Management

Key Finding from the Report:

Results from SYNERGISTICS 2014 survey, Maximizing Online and Mobile Banking and Payments, revealed that one-third of Internet households only use PC banking, while an equal number use PC banking and Mobile or Tablet banking.  About one-fifth were found to use all three channels.  Has this picture changed and if so, how?

F239 Prop Graphic

Highlights of the Study

This study examines consumer usage of online banking via PC, mobile and tablets.  The potential for broadening usage of these services and consumer reaction to innovative applications are examined as well.
National Internet Survey – 1,000 consumers age 18 or older.

Key Dates

October 23, 2015 — Charter fee/Intro pricing ends.
October 23, 2015 — Final acceptance of comments on questionnaire.
January 2016 — Project Report available.

Strategic Questions

  • What opportunities exist to expand and enhance PC-based online financial activities – those done via desktop, notebook, or laptop computer?  Beyond account information and basic account transactions, is their further potential for functions related to customer education, account management, and marketing-related activities?
  • What is the role of mobile phones – particularly smartphones – in consumers’ online banking and financial activities?  Are consumers oriented to doing only certain activities on their mobile phones?  Should providers place emphasis on expanding mobile activities or widening the user base?
  • How much share have tablets captured of consumers’ online financial activities and will this continue to expand?  Do they have a position among users as computers, mobile devices, or as something unique?
  • How can financial institutions strengthen and expand customer relationships in the online environment?  What is the experience with and reaction to personal financial management (PFM) applications and tools?  Can apps and alerts create account”stickiness?”  What should be the role of social media?
  • What is the relative preference among consumers for online PC, mobile, and tablet financial activities?  What factors or perceptions drive these preferences?  How wide is multiple channel usage and does this ever impact the completion of a single online activity?
  • What are the relative advantages or benefits of online PC, mobile, and tablet financial activities that should be promoted to expand and increase activity?  Are there perceived problems or disadvantages that may represent barriers to wider usage or adoption among nonusers? Are there segments of consumers that will never move beyond using PCs for online financial activities?
  • Which traits or characteristics – behavioral, attitudinal, or demographic – best identify users of online PC, mobile, and tablet financial activities?  Can shifts in channel preferences over time due to segment preferences – such as younger consumers’ affinity for mobile phones – be anticipated and reacted to by financial providers?

Research Issues

  • Online banking and financial activities, particularly those done by computer, have reached a level of usage that can be described as “mainstream.”  Financial providers are faced with a challenge – and opportunity – in developing future strategies and tactics that will differentiate their online programs from those of competitors. Mobile banking, that is financial activities done via mobile phones, has achieved a notable level of usage but still has wide potential for expansion.  Given that the mobile phone user base is now widespread across virtually all customer segments, promoting the value-added utility of using these devices to access financial accounts and services is a priority for all providers.
  • Tablet banking – encompassing devices such as the iPad, Surface, and e-readers with Web browsing capability – has emerged as the newest innovation in online banking.  Previous research by SYNERGISTICS has already shown some impressive consumer adoption of tablet and e-reader usage for online banking and financial activities.  There is ongoing analysis as to whether this is regarded as a computer to consumers, a mobile device, or something in between.
  • In approaching their online strategies, providers must consider a number of issues. Will consumers have preferences for certain devices over others for specific activities – such as balance inquiries vs. bill payments vs. customer service?  Will apps designed specifically for mobile phones or tablets add utility to those devices in terms of ease of use and convenience?  Should PFM programs be integrated across all three types of devices?  Will the younger, affluent cohort that typically adopts channel innovations maintain this behavior as they move through their financial life cycles or will they establish more long term preferences?  Will widening concerns about financial security and privacy impact usage of all online channels?  To be successful, it is essential for providers to understand the overall consumer perspective on online banking and the attitudes toward and preferences for various devices. [F239]

REVOLUTION IN PAYMENT CHOICE AT THE POINT OF SALE (Dec 2015)

Cards, Cash, and Checks

Mobile and Contactless

New Competitors

Key Finding from the Report:

Results from SYNERGISTICS 2014 study, Evaluating the Consumer Payments Market, found that more than seven in ten consumers view chip cards as an improvement over their current cards.  With chip/EMV cards now being rolled out by issuers, how has this perception changed, if at all?

F238 Prop Graphic

Highlights of the Study

This study examines consumer payment behavior at the point of sale. Current usage of various payment methods and consumer reaction to innovative payment options and technology are assessed.

National Internet Survey – 1,000 consumers age 18 or older.

Key Dates

September 25, 2015 — Charter fee/Intro pricing ends.

September 25, 2015 — Final acceptance of comments on questionnaire.

December 2015 — Project Report available.

Strategic Questions

  • Do attitudinal or perceptual factors influence payment choice? Do problems experienced at the point of sale – such as waiting time or confusion in using checkout terminals – have an impact?  Do consumers see advances in payment technology – such as chip cards or contactless mobile payments – as really being improvements?
  • What factors or motivations at the point of sale influence the choice of a payment method – including location, size of the purchase, available rewards, and security and privacy? Is cash still seen as most appropriate for certain purposes?  Do proprietary credit cards have an advantage over general-purpose cards in certain situations?
  • Are consumers adopting self-service modes of payment at the point of sale – such as self-checkout at retail stores, buying movie or event tickets at a self-service kiosk, or paying a restaurant check at an on-table terminal? What are the implications of this behavior for payment providers?
  • What is the consumer reaction to “real time” marketing messages and promotions delivered via mobile devices at the point of sale using GPS or location-based technology? What will be the role for “wearable” technology such as fitness trackers or smart watches?
  • How will consumers’ experiences with and perceptions of chip cards impact positioning and ongoing introduction of this product? How does this affect consumers’ usage of or receptivity to contactless payment cards or contactless mobile payments?
  • What are consumers’ perceptions of the relative security of various payment methods at the point of sale and how should providers address these concerns?
  • Does payment behavior at the point of sale vary among consumer segments?  Which groups – in terms of household demographics, current payment behavior, and other identifiers – have the most potential for adopting new payment methods and technologies?

Research Issues

  • A growing number of payment alternatives, technologies, and players are potentially bringing about an expanded array of choices for consumers when making a payment at the point of sale.  Contactless payments for debit and credit cards are gaining traction after somewhat limited availability for a number of years.  Paralleling this are ongoing developments in contactless payments made with mobile phones.  Many competing players and technologies are involved in mobile contactless payments, making it uncertain what systems may emerge and be widely adopted.  It is yet to be seen how the introduction of chip technology for all types of payment cards may impact contactless payment methods.
  • Cash, despite many proclamations of its demise, remains a very popular and preferred payment method among many consumers.  Recent news suggests that check writing at the point of sale may be a narrowing option, as many retailers and other organizations announce they will no longer accept checks.  Addressing the needs of small customer segments that prefer checks must be a priority for providers.
  • Banks have traditionally been the primary intermediary in the payments area and will certainly always have a role.  Any number of third parties – such as PayPal, Apple Pay and Google Wallet – could, however, be on the verge of taking a major role in the payments system. Recently, several retailers banded together to offer the mobile payment service CurrentC.  Clearly assessing consumers’ preferences for payment at the point of sale is critical to success in the increasingly competitive – and complex – payments market.  This study examines consumer payment behavior at the point of sale.  Experience with various payment options and reaction to innovative payment alternatives are examined. [F238]

CHIP CARDS: THE CONSUMER PERSPECTIVE (Sept 2015)

Awareness, Usage, and Appeal

Benefits and Barriers

Fraud and Security

Key Finding from the Report:

SYNERGISTICS survey results reveal that three-fourths of credit card users are aware of chip/EMV credit cards, representing an increase from 2012.

A84 Prop graphic

Highlights of the Study

This study examines the consumer reaction to chip/EMV cards including their perceived advantages and disadvantages.   Consumer reaction to contactless payments is also assessed.

National Internet Survey – 1,000 consumers age 18 or older.

Key Dates

September 2015 — Project Report available.

Strategic Questions

  • To what extent are consumers aware of the implementation of chip card/EMV technology in the United States?  To what extent have chip cards already been issued to credit and debit card users?  Are chip cards seen as an improvement for payment cards?
  • What benefits or valuable features do card users see in chip cards?  What concerns may represent barriers to usage?
  • How prevalent is experience with actual chip card transactions?  Are card users adapting to the process?
  • Do card users see utility or value in other potential applications for chip cards -– such as storing account numbers and information, storing a record of purchases, maintaining medical records, or storing insurance information?
  • How does the introduction of chip card technology interact with or impact contactless payments?  How widespread is current usage of contactless payments – for credit cards, debit cards, and mobile payments?
  • What is the perception of the relative security of “chip and PIN” versus “chip and signature?”
  • Which customer segments – in terms of demographic and behavioral variables – have adopted or will adopt chip cards most easily?  Which might be in need of additional information and consumer education to ease this process?

Research Issues

  • 2015 is shaping up to be the year of the chip card in the U.S. card and payments market.  Chip or EMV cards are now used extensively in Europe, Canada and around the world, but adoption in this country has been slow due to the existing magnetic stripe networks and infrastructure.
  • EMV, which stands for Europay, MasterCard and Visa, has become the global standard for chip cards.  Chip cards offer greater security and reduced fraud risks for consumers and merchants.  Chip technology permits a wide variety of applications in addition to payments, such as storing loyalty program participation, medical information, or insurance coverage.
  • Many questions need to be answered before chip card implementation is complete. Do consumers have concerns with regard to the security of a chip card?  Do consumers have a preference for chip and PIN or chip and signature based programs? What do consumers view as the advantages and disadvantages of chip cards? What features will be key in driving usage of these cards?  It is imperative that providers understand the consumer reaction to chip cards. [A84]

REDEFINING DIRECT BANKING (Aug 2015)

Product and Pricing Incentives

Benefits and Concerns

Provider Competition

Key Finding from the Report:

SYNERGISTICS survey results reveal that more than one-third of Internet households are customers of an Internet-based or direct bank, and more than one-quarter express interest in these cyber competitors.

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Highlights of the Study

This study examines direct banking and assesses the scope of these relationships. It also determines the competitive strength of Internet-only or direct banks.

National Internet Survey – 1,012 consumers age 18 or older.

Key Dates

August 2015 — Project Report available.

Strategic Questions

  • To what extent have households established relationships with online or Internet-based financial institutions?  With what types of providers do consumers have these relationships?  What is the customer perception of these providers – are they subsidiaries of traditional institutions or “pure” direct online institutions?
  • How frequently do customers access their accounts with online or Internet-based providers and what types of activities do they conduct?  Has this activity negatively impacted traditional channels?
  • Which access channels – other than the web – are customers using to interact with their online providers – including ATMs, mail, and mobile devices?  Do or would customers value a physical presence for their online providers via the “cafés” concept?
  • What motivations – particularly rewards or incentives – have been important in acquiring relationships in this market and can they be effective for further market expansion?  What barriers must be overcome to appeal to nonusers?
  • What is the potential among nonusers to establish online or Internet-based account relationships? Which perceived benefits or advantages should be promoted to drive future expansion?
  • Is attrition a factor providers should be concerned with in this market?  For what reason have customers ended relationships with online or Internet-based providers?  Would competitive rate competition by traditional providers impact this market?
  • Which types of customer segments – in terms of demographics or financial profile and behavior – are the primary user bases of direct banking?  Is there potential for expanding the market to other groups?

Research Issues

  • Internet-only or direct banks are key competitors in today’s financial marketplace. These branchless institutions have gained a competitive advantage by providing better rates on savings and loan products. Many of these web-based institutions are able to offer better rates and reduced fees because there is no need to maintain costly physical branches or staff.
  • This coupled with the offering of incentives and bonus programs make direct banking attractive to consumers. Free checks, no ATM fees, and remote deposit capture are promoted as features of Internet-only banks. Consumers who become direct banking users may go beyond being attracted by bonus rates to purchasing other financial products and even establishing primary relationships.
  • While consumers may be attracted to the higher rates and low-cost banking options, they may struggle with the lack of physical locations for regular banking activities and customer service. Having a clear understanding of the consumer perspective on direct banking and Internet-based institutions is essential in order to compete effectively in the highly competitive financial marketplace. [A83]

CONCIERGE BANKING: CONSUMER VIEWPOINT (Aug 2015)

Relationship Enhancement

Appointment Banking

Personalized and Value-Added Services

Key Finding from the Report:

SYNERGISTICS survey results reveal that few consumers indicate contacting a personal banker or relationship manager when they visit the branch.  Does this point to opportunities in the area of concierge banking programs?

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Highlights of the Study

This report examines consumers’ usage of and response to the concept of concierge banking including appointment banking or banking on the go, value-added and specialty services, and the role of personal bankers.

National Internet Survey – 1,012 consumers age 18 or older.

Key Dates

August 2015 — Project Report available.

Strategic Questions

  • What is the environment for concierge banking in terms of frequency of branch contact by consumers for both routine and non-routine activities?  Which staff members are typically dealt with – including tellers, customer service representatives, and branch managers?  How extensive are personal banker relationships?
  • To what extent do consumers have value-added services, benefits, and features that come under the umbrella of concierge banking?  What special banking services or benefits do consumers have or see as valuable – such as live 24/7 customer service, better rates on savings and credit services, or access to special investment opportunities?  What types of value-added services are used or seen as valuable – such as travel upgrades and special rewards?
  • To what extent are banking customers involved with formally positioned programs such as concierge banking, private banking, or wealth management?  Are these programs tied to deposit or investment balances, credit card activity, or loan balances?  Are annual fees paid for these programs?  Do some customers perceive that they have special services or benefits as part of their regular banking relationship?
  • What is the potential for expanding formal concierge or private banking programs?  Are customers willing to meet conditions – such as maintaining deposit balances or spending a certain volume on a credit card – to be eligible for these programs?  Is there receptivity to annual fees?
  • What are the primary benefits of concierge banking programs that financial institutions should emphasize to expand the market – such as cost savings, a high degree of personal service, simplification of one’s financial affairs, and advice and recommendations based on a comprehensive financial picture?
  • What potential barriers must be overcome to effectively market concierge banking programs – such as perceptions that it is more cost effective to shop for financial services, it is risky to have most of one’s business with a single provider, it is better to get advice from multiple sources, and one will be subject to sales pressure to open new accounts or services?
  • Is concierge banking a “high end” service that should only be marketed to affluent customers?  Or is there sufficient receptivity in other demographic and behavioral segments to make them appropriate prospects in terms of future relationship growth and expansion?

Research Issues

  • What is concierge banking?  A number of financial services providers are reaching out to their customers with concierge banking programs.  In some instances, the programs are primarily for private bank clients.
  • Checking account packages that offer a wide variety of features are often labeled as concierge banking services. Delivery services or “banking on the go” programs can come under the concierge banking umbrella.  In these programs, the bank literally comes to the customer to open accounts or discuss loan and mortgage options.
  • Going beyond financial or banking services, some banks are using the term literally and are making dinner reservations, securing event tickets and reserving transportation for their customers.  Concierge banking encompasses value-added services that can engage customers and enhance the financial relationship.  What is the consumer perspective regarding concierge banking? What value-added services should be included?  What marketing objectives can concierge banking address?  All of these issues and others will be addressed in this report. [A82]