Branch Banking Now Trails Online Banking

Internet-banking-in-CanadaCanadians are slowly becoming less attached to branches.

In the last year, 80% of bank customers visited a branch while 86% used online banking. Two years ago, the numbers were reversed at 84% and 80% respectively.

This data comes from a new J.D. Power and Associates report released Thursday. The study finds that one in five bank customers have not made a branch visit in the past year, with many preferring to do business with e-banks like ING Direct, PC Financial and Manulife Bank.

J.D. Power also reports that customer satisfaction has dropped by a significant five percentage points at the major banks. That, and the online banking shift, should have major banks slightly concerned.

For financial institutions trying to woo tech-savvy customers, their website is becoming as important as their branches.

JD-powerLubo Li, a Senior Director at J.D. Power and Associates, covers Canada’s financial services sector. His research finds three key factors that clients look for in an online banking site (in this order):

1) Appearance of the website

  • e.g., aesthetics, a professional look, etc.

2) Ease of navigation

  • e.g., the intuitiveness of the user interface and number of clicks required to access key functions

3) Range of services

  • e.g., the breadth of products and services available on the same website

ING-DirectThe top-ranked online banking site in Canada is currently, according to J.D. Power. “Nobody is even close to ING,” says Li. ING’s website scored 879 out of 1,000 with respondents. The top-ranking Big 5 bank website was TD Canada Trust, with a score of 820.

“ING is doing a phenomenal job delivering a superior customer experience,” Li says, adding that major banks could learn something from Canada’s #1 online bank brand. ING’s site is upbeat, clutter-free and highly intuitive in terms of navigation.

Interestingly, overall customer satisfaction with online banking sites fell this year by eight percentage points. Li partly attributes that to people having “higher expectations” for websites nowadays. So if your homepage looks like a build-it-yourself website template from 1998, it could be hurting you more than you realize.

Report details: About 12,000 people were polled for this J.D. Powers’ survey. More…

Rob McLister, CMT

  1. TD is forcing customers to online banking by charging for paper statements and upping fees on in-branch transactions. Assuming other banks are doing the same, that might help explain why satisfaction with banks is falling.

  2. Wishful thinking folks.
    Take a look at the customer satisfaction numbers for Rogers and BCE. Bank numbers are far superior.
    Here’s an important pair of figures: residential mortgages with chartered banks = $850 billion, total residential mortgages = $1.1 trillion.

  3. This doesn’t surprise me at all. The web is growing with more ferocity every single day and people just don’t have the time to stop by their local branch as they once did.

  4. And your point is?
    If you think the next generation will be loyal to big banks like our parents were, you’re smoking the wrong stuff. They’ll be loyal to their wallets and nothing else.

  5. Branches are rarely open outside normal working hours, so what do they expect?
    Sure retirees will stroll in during the day, but busy two-income families are going to do whatever is most convenient (and doesn’t have a service charge)!

  6. TD also recently increased their minimum account balances in order to have the monthly fee waived. It’s now $1500, up from $1000, to have the $3.95 waived.
    Also, seniors were hit – TD changed their free banking rules.
    Little things – but I went from being a proud TD customer to an angry one.

  7. Just wait until banks here eventually catch up to some of the advancements seen elsewhere in the world. I saw a commercial for a US bank where you can take a picture of a cheque and deposit it into your account via the smartphone app. More of this and there will be very little reason to visit a bank.

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