• by Tanya Gazdik , November 12, 2011

One way banks can improve their relationships with customers in strained financial times (especially in light of the recent Bank Transfer Day, which encouraged consumers to move their accounts away from big banks to community banks and credit unions) is by creating convenience and loyalty online.

According to Change Sciences Groups’ “Inside Online Banking 2011: Benchmarks and Best Practices,” PNC’s Virtual Wallet is hitting the mark in giving customers reasons to stick around.

Online banking has provided and continues to provide a better way to pay bills and manage money, according to the report. The problem is that most online banking implementations are still much harder to use than they need to be. Whether checking a balance, adding a payee, making a payment, or transferring funds, most online banking systems present a series of minor and sometimes major annoyances that all give consumers yet another reason to be angry at their bank.

The 86-page report reveals how top performing banks continuously optimize online banking to reduce annoyances and provide greater financial control, and highlights all the ways online banking currently falls short. Eleven sites were evaluated. Besides PNC Virtual Wallet, Ally Bank and Bank of America were deemed the top sites. The three poorest performers are Citibank, US Bank and Chase.

What all of the top three sites are doing that most of the others don't really attempt to do is provide people greater financial control within online banking, says Steve Ellis, the lead author of the report and a partner at Change Sciences Group.

“This means going beyond letting people pay bills through the bank's website -- that's been around for many years,” Ellis tells Marketing Daily. “What greater financial control is about is creating well-designed tools that help people manage their spending and saving. It also means actively working to smooth out the rough edges of the user interface to minimize annoyances. This last point is really where the bottom performers fall short.”

Had Bank of America not changed its mind about implementing a $5 per month debit card fee (which in part was the impetus for Bank Transfer Day) would its superior website and the conveniences it provides have stopped people from defecting? “In some cases it might have, if people didn't take it for granted,” Ellis says. “It is likely that people who did defect may return after they experience the online services of the bank they chose to switch to, large or small.

“The fact is that most bank sites just aren't up to par with the sites people are on most of the time (Facebook, Amazon, etc.) and have all kinds of annoyances that give people a real reason to feel bad about their bank,” Ellis adds. “The sites at the top of our ranking get that this is where people are coming from.”

The bar for what makes a good online banking customer experience has been raised over the last year. Leaders continue to add features that enhance financial control like calendar views of bill pay and tools to help manage spending and saving. The best sites don't simply implement what their online banking vendors provide but actively tweak vendor systems (sometimes overhauling whole processes) to enhance user experience.