Top Trends in Retail Online Banking

by Jacob Jegher, June 1, 2011
Industry Trends
North America

Abstract

Bank customers have started to demand that their banks’ online offerings keep up with the times.

The online banking space has stagnated for far too long. The evolution of the Internet has provided consumers with rich and interactive experiences online. Unfortunately, the banking industry has not kept pace with the evolution of the Internet, and customers have started to demand that their banks keep up with the times. For the most part, financial institutions recognize their online shortcomings. The question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer because financial institutions have just started to emerge from the impact of the financial crisis and are under extreme pressure to run sustainable businesses in the wake of increased regulatory pressures.

The good news is that next-generation online banking is on its way. A new report, Top Trends in Retail Online Banking, examines and analyzes the top trends in retail online banking. Some of these are in full swing; others are just emerging or expected to impact the space within the next three to five years.

"Online banking isn’t an alternative channel any more. It’s a mainstream channel," says Jacob Jegher, Senior Analyst with Celent’s Banking group and author of the report. "This channel, however, requires a lot of attention. If banks don’t act swiftly, they risk critical customer relationships and revenue. It’s important that banks harness technology but don’t use it as their best foot forward."

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

User Experience / Functionality Trends

5

 

Most Banks Are Still Dabbling with the Notion of PFM

5

 

The Only Channel Goes Mainstream But Needs to Get with the Times

9

 

The Tablet Will Act as a Catalyst to the Redesign of Online Banking

12

 

It’s Time to Overhaul Online Banking Bill Pay

13

Revenue Growth / Cost-Cutting Trends

16

 

Merchant-Funded Rewards Programs Are Being Integrated into Online Banking

16

 

Financial Technology Startups Are Teaming Up with Banks to Offer Innovation Online Services

17

 

Banks Employ Self-Service as a Way to Please Customers and Cut Costs

18

Relationships / Stickiness Trends

20

 

Data and Analytics Help Create the Path Towards Intelligence. Enter PFM.

20

 

Banks Still Don’t Get Social Media

20

 

Banking, Saving, and Shopping Are the Ultimate Online Banking Triple Play

21

Conclusion

24

Leveraging Celent’s Expertise

25

 

Support for Financial Institutions

25

 

Support for Vendors

25

Related Celent Research

26

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