Surprising, but true – Internet-based activity is not the preserve of the young “digital native” generation alone. A 2008 survey says that Generation X (those born between 1965 and 1976) uses Internet banking significantly more than any other demographic segment, with two thirds of Internet users in this age group banking online.
Gen X users have also professed their preference for applications such as Facebook, to share, connect and be part of a larger community.
This is some irony in this, since online banking, as we know it today, offers minimal interactivity. Unlike in a branch, where the comfort of two way interaction facilitates the consummation of a variety of transactions, the one way street of e-banking has only managed to enable the more routine tasks, such as balance enquiry or funds transfer.
It’s not hard to put two and two together. A clear opportunity exists for banks that can transform today’s passive Internet banking offering into one that provides a more widespread and interactive customer experience.
It is therefore imperative that banks transform their online offering, such that it matches the new expectations of customers. Moreover, Internet banking must journey to popular online customer hangouts, rather than wait for customers to come to it.
There are clear indications that the shift towards a “next generation” online banking environment has already been set in motion. It is only a matter of time before these trends become the norm.
Leveraging of Social Networks
Forward thinking banks are leveraging existing social networks on external sites to increase their visibility among interested groups. They are also deploying social software technology on their own sites to engage the same communities in two way discussions. Thus, their Internet banking has assumed a more pervasive persona – customers are engaging with the bank, along with its products and services even when they’re not actually transacting online.
Heightened visibility apart, banks can gain tremendous customer insight from such unstructured, informal interactions. For example, a discussion on the uncertain financial future among a group of 18 to 25 year olds could be a signal to banks to offer long term investment products to a segment that was previously not considered a target. Going one step further, a positive buzz around a newly launched service can create valuable word-of-mouth advertising for the business.
Collaborating through Web 2.0
The collaborative aspect of Web 2.0 applications has enabled banks to draw customers inside their fold more than ever before. Traditional methods such as focus group discussions or market research suffer from the disadvantages of high cost, limited scope and potential to introduce bias. Feedback forms merely serve as a post-mortem. In contrast, Web 2.0 has the ability to carry a vast audience along right from the start, and continue to do so perpetually. Thus, an interested community of prospects and customers participate in co-creating products and services which can fulfil their expectations.
The pervasiveness of Web 2.0 enables delivery of e-banking across multiple online locations and web-based gadgets such as Yahoo!Widgets, Windows Live or the iPhone. This means next generation online banking customers will enjoy heightened access and convenience
A New York based firm of analysts found that 15% of the 70 banks tracked by them had adopted Web 2.0, a number of them having done so within the last 12 months.
Standard Chartered Bank employees connect with their colleagues through Facebook and use the platform to share knowledge, clarify questions and participate in discussions on ongoing company activities.
Bank of America, Wachovia Bank and Commonwealth Credit Union have built a presence within interactive media to create awareness and keep up a dialogue with interested communities. They have employed a variety of methods, ranging from creating YouTube communities to launching campaigns on Current TV, a channel in which viewers determine content.