Innovation In Self-Service Channels Helps Customer Retention
TowerGroup says that self-service banking is alive and well in the United States and finds that self-service banking will undergo an explosion in both quantity and quality, relative to the kinds of transactions that consumers can perform unaided by bank staff. TowerGroup estimates that by 2010, retail banking customers in the U.S. will conduct nearly 60 billion self-service transactions every year -- an increase of nearly 50% over self-service transaction volumes forecasted for 2006.
Until recently, financial institutions' migration to self-service channels was driven by consumer demands for more banking options -- not by the banks themselves. Yet recent internal studies by financial institutions have found that the most profitable customers are those who use a variety of delivery channels, both attended and self-service. Further, banks are finding higher satisfaction rates among consumers who have greater choice in dictating where, when and how they do their banking.Despite the growth of self-services channels in the financial services arena, TowerGroup believes that banks still have a great deal to learn from other industries. Airlines and Internet retailers, in particular, are continuing to innovate in the self-service options they provide to their customers. Ultimately, broader adoption of self-service outside traditional banking channels will drive further acceptance of greater self-service functionality via channels like the ATM, interactive voice response (IVR), and online banking functionality.
A new TowerGroup report titled, "Customer Self-Service and Retail Banking in the US: Rising Expectations, Challenges, Opportunities" by Jerry Silva, research director for the Delivery Channels practices at TowerGroup, examines customer's attitudes about self-service in banking and their preferences regarding use of ATMs, IVR systems, and online banking. The report also describes self-service trends in other industries that will both drive and challenge retail banks' future reliance on self-service industry mechanisms.
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