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"I feel mobile banking is distinctly faster. That is, if we be mobile and walk down to the ATM."

"I feel mobile banking is distinctly faster. That is, if we be mobile and walk down to the ATM.". Customer Expectations of Internet Banking in South Africa. Jean-Paul Van Belle Simone Green University of Cape Town. Contents. Banking & the Internet e-Banking in SA Research methodology

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"I feel mobile banking is distinctly faster. That is, if we be mobile and walk down to the ATM."

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  1. "I feel mobile banking is distinctly faster. That is, if we be mobile and walk down to the ATM."

  2. Customer Expectations of Internet Banking in South Africa Jean-Paul Van Belle Simone Green University of Cape Town

  3. Contents • Banking & the Internet • e-Banking in SA • Research methodology • Sample demographics • Some findings • Conclusions

  4. How the Internet has changed banking • Convergence in industry • Innovative products • 24/7 • Disintermediation • Re-intermediation • Delivery channel mix • Empowered customers • Technology focus at the expense of current customers ? • Personalization online

  5. South African context • The digital divide: 1st 3rd world • 1 – 1 ½ million Internet users • Most South Africans don’t have bank accounts • Note: 10 million cell-phones • SA banks are early technology adopters • first ATMs • telephone banking (tone-dial based) • cell-phone banking (WAP-based) • 9 Internet Banks but only 1 “profitable” • 1% penetration rate for M-banking

  6. Current state and drivers of the South African banking industry • Change “drivers”: • technology: “clicks”  “bricks” • consolidation: to achieve economies of scale • globalisation • Change “enablers”: • client sophistication • new information technologies • the Internet • Pressing issues: • service quality • client focus • profit performance

  7. (A NZ bank gave a customer access to the account of another person with the same name. Doug Myers is one of NZ wealthiest men!)

  8. Research Methodology:Approach • H0: “a gap exists between expectations of Internet banking customers, and the satisfaction of these expectations by South African banking institutions” • Subjective & empirical • Qualitative • 10 structured interviews • stratified according to gender, (private) banking relationship, dial-up corporate access, bank. • Quantitative: • web-based questionnaire

  9. Research Methodology:“User Expectations” • Basic functionality, convenience and speed of website • Service levels both online and offline • Integration across banking channels • Cost of transactions • Quality of information on the website • Actual website usability • Personal contact independent of the Internet banking channel • Added value for the end user in terms of the service offering

  10. Sample demographics

  11. General Opinions • People stay because “it’s too much trouble to switch” (42%) • Price sensitivity: 65% will move if offered a better fee structure • Banks meet financial expectations (60%) except for 30-39 year olds (only 35%; p<5%) • People want to be able to open bank accounts on the Internet (86%) • Financial advice required (♀)

  12. Perceived advantages of Internet banking

  13. Perceived problems with Internet Banking

  14. Use, usability and safety • Use • inter-account transfers (62%) • payments (61%) • statements (48%) • checking balances (44%) • Ease of Use • 62% want to be able to customize their banking site. • 55% happy with Internet service, in terms of feedback, solving technical errors and rectifying problems • Safety • 77% considers Internet banking to be secure • Recent security issues!

  15. Qualitative feedback (1) • Improve usability: • Less graphics => greater speed • Simpler navigation • Better information display/layout • Less complex login procedure (safety?) • Improve functionality: • Integrated view of all accounts • Opening new accounts • Add new beneficiaries • More transactional history

  16. Qualitative feedback (2) • Channel Integration • E-mail communication • Improved call centers (with operators who are empowered to conduct transactions) • Interactive financial tools:“[I’d like to see] a management tool that helps me analyse my budgeted expenses against my income. A system that mails me warnings when funds are low and stop orders are likely to bounce. Something that lets me assess whether I can afford a new purchase. Banks make their money off interest and I am sick of them letting my overdraft and credit spiral. I want a partner that helps me control my money.” • “Treat us like individuals”

  17. The future of electronic banking • Transparency of service: “open access, open communication & open rates” • Integrated money management:convergence! • Retaining personalized service potential “death of personal relationships” • Future costspass on the cost savings to the customer

  18. Conclusions • “Gap between customer expectations and bank services”? => basic expectations are met: • security, functionality, service • … but more value could be added: • channel integration; speed; costs • navigation; customizability • financial advice & services; transparency • Future research: • larger sample; more qualitative research; age differentiations; Internet-specific popular products.

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