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Experiment proves banks cannot take digital first for granted

Experiment finds majority of banking customers do not fully understand online statements

Karl Flinders
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Published: 05 Feb 2015 11:13

An experiment sponsored by a pressure group calling for banks and businesses to give consumers a choice in how they receive their statements and bills found that less than half of people understand online statements.

The group, Keep Me Posted, sponsored a behavioural study which compared the responses and attitudes of two groups of people in a test scenario – one group was sent information by post and the other group received the same information online.

It found that despite people thinking they can better manage their finances online, this is not always the case.

The finding that 75% of people were able to correctly assess their financial health using a paper statement, in contrast to only 48% through online statements, re-affirms the importance of traditional services in banking as online banking takes a grip on the industry. 

“The behavioural tests found that there is a disconnect between people’s perception and reality when it comes to the effectiveness of online statements versus paper statements. While many respondents said receiving information in an electronic format helped them manage their finances better, the result of the behavioural experiment found the opposite was true,” said the Keep Me Posted report.

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The results revealed that consumers who received statements and other financial information by post were better able to understand the information given, act on that information and make better financial decisions as a result than those who received the same information electronically.

Wider research, carried out by YouGov and London Economics, revealed that 90% of people who received bills by post were able to spot better ways to manage their finances, compared with 77% of those who received online statements.

Multi-channel communications

Services offered by traditional banks, including in-branch consultancy and detailed services, will remain valuable, while challenger banks, as well as IT companies offering financial services, must balance their service delivery to attract customers.

Digital challenger banks cannot take for granted that everyone prefers a digital-only service and must have a multi-channel approach. 

Receiving paper correspondence may help people manage their finances better

Judith Donovan, Keep Me Posted

The pace of change in consumer preferences is so fast that the use of computers to bank online is already in decline as smartphones take over. Mobile is the most dominant form of banking in the world and is enabling competitors to eat into banks' business without being noticed, according to a study of 80,000 people.

According to the research from Bain & Company, mobile accounted for about a third of transactions in 13 out of the 22 countries surveyed. The study showed mobile banking is taking over online banking via a computer, which decreased by 3% in 2013.

“People’s understanding of the information they receive has important implications on their ability to manage their money effectively,” said Judith Donovan, chair of the Keep Me Posted campaign. “The findings confirm that receiving paper correspondence may help people manage their finances better. It can help them avoid going overdrawn inadvertently or spending beyond their means.”

Hannah Poulton, head of multi-channel communications for Principality Building Society, said the financial industry is complex and communication is important to customers. 

“The evidence that people seem able to make better financial decisions if they have access to paper statements is compelling, and we hope that Principality’s commitment to retaining paper-based communications for those who prefer them will help our members continue to manage their money better and keep their finances on a sound footing.”

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