Outline the key ways in which Consumers’ Behaviour differs when banking online and offline

Table of Contents

• Offline/Online Banking – What is it?
• Who’s Driving Online Banking?
• What are the Key Differences in Offline/Online Behaviour?
• Who is using Online Banking?
• Where is Online Banking Going?
• Can the banks operate equally?
• Conclusion – So what is the impact of this on the Consumer?
• Appendix
• Case Examples
• Example 1 – Savings Account Application.
• Example 2 – Online Credit Card Application.
• Example 3 – RaboDirect.ie.
• Example 4 – An independent third party.

Offline/Online Banking – What is it?

Put simply, it’s banking through the traditional bricks and mortar banking and banking on the World Wide Web. The world is changing, and it would appear that it is changing quickly. But why? Is it simply because we’re evolving faster online than expected? Or is it because we’re being forced online to stay out of the banks?

I would define the two different styles of banking as follow:

• Offline Banking:
  • In branch banking;
  • Telephone banking.
• Online Banking:
  • Online accounts, such as Banking365 (BOI);
  • RaboDirect.ie.

In this short paper I aim to explore several Consumer Behaviour Decisions/Theories which ask why people are shunning the traditional style of banking and are now moving to the web. For the purpose of this assignment I have interviewed several people and will be using both mine and their experiences to back up the points herein.

Who’s Driving Online Banking?

For this there are several theories. I would hypothesise that the Banks themselves are the biggest protagonists in the shift from the traditional to the digital. That is obvious in itself. However, what I think is not so obvious is that I believe they are using both direct and indirect means to force customers out of the branches and on to the computers. I think it may be fair to say that some banks are downgrading their services so much so as to make the experience in the bank so poor, that people will make the decision to migrate to online banking themselves. In essence, I believe banks are now making it increasingly difficult to stay in their branches. Example 4 in the Appendix would serve to reinforce this believe.

When I recently asked one person what they made of their most recent experience in a bank, I was met with this reply:

“You mean like the blank faces behind glass screens, with eyes devoid of sparkle, looking out at the winding queues? As you’re greeted with a heavy sigh, slumped shoulders and absolutely no eye contact whatsoever?

“Yes, a wonderful service. Mind you, I haven’t been in the IRBC at all. I’d say all those staff are literally laughing all the way to the *ahem* bank!”

Thus, with that in mind, one must ask oneself two questions:

i.            Why would I keep going back into a bank when I’m clearly just a bank account number?

ii.            Why are those staff members so unmotivated?

Both questions will inevitably lead to the customer doing the same thing. Ringing up the online bank services and setting themselves up online.

So, who is driving customers to online banking, and why? It’s the banks, clearly. And they’re doing it for one reason; to save money. But how are they doing it? I am of the opinion that they are doing this through direct and indirect methods. They are directly advertising the benefits of being online, hence the direct marketing bit. I also believe, however, that they are leaving their frontline staff in such a demoralised state that the customers in the queue are left with no recourse than to ask themselves the two questions, above.

Figure 1: An interviewee recalls a recent visit to a bank.

The banks themselves are also limiting exactly what the cashier and customer care representative can do for you. I recall one occasion where a bank clerk was going through a queue in a bank and asking the customers in the queue what their business was. Those who did not answer with “I’m looking for Currency Exchange” or “I wish to discuss a private matter” were met with “Did you know you can take care of that in our ATM’s” or “Did you know you can do that online? You can call up to register for banking 365.”. I asked myself at the time, does that clerk realise that they are slowly outsourcing their job?

Figure 2: A personal example of a recent experience in a bank.

It is, at the moment, in the banks interest to drive their customers to online banking. One could almost posit that the banks are diverting their budget for advertising in traditional banking to their advertising and marketing budget for online banking. If one was to observe the increase in services offered online, and the decrease in services offered offline, this of course makes sense. In addition to this, the major banks in Ireland are also continually decreasing their workforce and branch numbers.

What are the Key Differences in Offline/Online Behaviour?

Here are what I believe to be the key differences in the consumer mindset when it comes to Offline Banking -V- Online banking and how we perceive the experience:

Offline Banking	Online Banking
Very little control;Little satisfaction; The opening hours are very limited and inflexible; The personal interaction experience is gone; Frustrating experience.	High rate of control;Ease of access; 24/7 service; No queuing; Very little interaction with Bank Employees.

Bank Of Ireland also actively promotes their online services and their sites. As with any business, they are keeping up with web 2.0, but I think their long term strategy is to hold on to key locations and funnel customers through to their various sites. They are successfully taking advantage of the new founded innovative customer. Perception of service has led customers to expect more, and their expectations are being disappointed. The customer therefore now has no problem with becoming their own champion and finding their own answers.

The different brochures and advertisements are not telling people to call into a branch, but to go online or download the latest app. We are no longer able to be the 9-5 Monday to Friday society and this change reflects our new lifestyle.

So what’s the marketing strategy behind this? Simple, let the customers feel empowered. Get them the app, get them registered, get them doing everything for themselves. And why? It streamlines your business and, in theory, makes it easier to run and operate.

Who is using Online Banking?

Having conducted research into this from people across a wide age group, it would appear that it attracts nearly everyone. Those in their late teens to their later years are getting online. It seems to be growing alongside the rise of social media and with the evolution of the Internet. The gap between the elderly and the young online is closing. There are many attributing factors to coincide with this rise, of course. The biggest factor being that we are now, as a nation, becoming more PC friendly, and less tolerant of waiting. With this in mind the obvious conclusion is that we no longer like to wait for someone else, especially if we can take care of matters ourselves.

Where is Online Banking Going?

Online banking is managing to eliminate, one by one, the services offered in a branch. I have recently been able to open a savings account, successfully, and apply for another Credit Card online. Although there all still some kinks in the system, I believe that banks will attempt to follow the RaboDirect route and make traditional banking a thing of the past.

To aid this assignment I set myself three tasks to understand this further:

i.            To open a savings account online;

ii.            To apply for a credit card online;

iii.            To open a RaboDirect.ie account.

Having recently been in a bank I decided that I was not going to put myself through the offline process again. Please see the appendix, under “Case Examples” for full cases.

Can the banks operate equally?

I would say no, they can’t. I would also say that all signs point towards them not wanting to operate a business model that allows people to do their business as easily offline as they can online. If one considers the banks own advertising, then we can see that they are constantly trying to get people to operate with a mouse and not with their feet. Simply put, in a world were the accountants are running the show, it makes fiscal sense. It no longer makes sense financially to provide the best customer service.

However, as one of my interviewees pointed out, there may be one saving grace.

Figure 3: Some people may just like the human interaction. If banks get rid of this, could they be cutting their long term sustainability?

As I stated at the start of this assignment we are now, as a people, evolving faster than we have done in the past. We are as likely to want a return to traditional banking as quickly as we are changing to online banking.

Conclusion – So what is the impact of this on the Consumer?

To conclude my input on this assignment I am going to suggest that the age of traditional banking is coming to an end. It is a simple fact that the experience has changed. It has been changed by the banks. It has been changed by our need for quick, efficient and effective service. It has been changed by our “I want it now” mentality. Change is natural, it happens with everything, but it happens faster now.

To quote another person I recently interviewed “If you could lodge cheques/bank drafts through some sort of serial ID process online, would that eliminate your need to go into a branch?” they responded with:

“Well, I also pay my bills through 365Online. It makes life handier than queuing all day. Not having to go to the bank is good simply because there’s not enough staff, and the one’s that are there don’t wanna be there.”

So, is it a case of us thinking that the banks don’t want us in there? We are very sensitive beings after all, subconsciously of course, and if we get the impression we’re not wanted we’ll go with that. And I think that may in fact suit the banks.

However, the reason the banks started increasing their online banking resources was to meet the demands that we, their customers, were demanding of them. We are no longer a 9-5 society, we are 24/7. We are switched on all the time. We sleep with our phones by our pillows. We wake up for emails. We need it now, tomorrow is no good. We are the now generation. We are the product of digital marketing and being able to literally have everything at our fingertips.

You may have noticed the lack of academic articles backing up this assignment. The reason I chose not to include any is simply due to the fact that there are none recent enough. This in itself shows the rapid rate of change in the subject matter.

Appendix

Case Examples

Example 1 – Savings Account Application

I logged into my account, as normal (a 3 click process) and set about finding the relevant tab to use. This was quite simple and very straightforward. I had my account set up and ready to go in minutes. Overall, this was a good experience. There was only interaction with the site, there was no person to person interaction.

Example 2 – Online Credit Card Application

Again, I logged into my account and found the relevant tab. After a few bits of clicking I was logged out and taken to the main Bank of Ireland site to apply for the “Clear Credit Card”. Here I had to answer a lot of questions, all on different pages. I was getting quite bored at this point and had it not been for this assignment I would have given up, and I certainly wouldn’t have gone into the bank looking for the application form. Finally, I got to the end. I was informed I would receive a phone and letter in relation to my application. The phone call came a week later and the letter has yet to arrive.

The phone call really made the whole experience. I missed the call, as I was in work. I was advised by the voicemail the representative left to call 1890-365-100 and ask for “Margaret”. This was ambiguous to say the least. I decided to return the call on my lunch break. I had to sift through the automated menu. There was no help number for phoning Margaret back. There was no “If you missed a call from Margaret, please press 9”. I kept on hitting numbers until I got to a person, a real person. Finally, I asked someone about Margaret, 15 minutes later. Strangely, they knew her. I was transferred.

At this point I must stress that I don’t even want this card anymore, but I’m stubborn, so I persevere. At last, the elusive Margaret. So what’s the news? The application has been approved, but I’ll have to give up my current card and transfer the balance to this one. What are the benefits of that, I ask. Well, it’s a lower credit limit and higher repayment rates, but somehow that is better for me and I should go for it. This is not making sense to me, so I ask again. All Margaret can tell me is that it’s better and that I should go for it. I don’t argue, I don’t point out the obvious flaw in her argument, I simply say Thank You, politely decline the offer, and carry on.

This sort of sums up Bank of Ireland at the moment. The way they are operating is not really better for us, but they’ll tell us it is, and expect us to believe them.

Example 3 – RaboDirect.ie

This was very straight forward, the only issue I have at the moment is that I have to send in supporting documentation to finalise the opening of my account. Unfortunately I have not done this as yet. The reasons for this are simple, I have to do a bit of offline work, and I haven’t been able to allot the time for this. It is unfortunate that I still have to rely on the 9-5 clock of other businesses to help me with this.

Example 4 – An independent third party

The following is an exact extract from an interviewee. It centres around their experience applying for a savings account and a credit card.

“I went into permanent TSB in Liffey Valley shopping centre looking to find out information on getting a credit card for myself and to lodge a cheque. I proceeded to the cash desks first to lodge the cheque, it was a few minutes wait as there was only one person on. That was a quick transaction and was fine, but when I moved to the customer service desk there was no one to be seen. I waited for a few minutes and nothing so I walked back over to the cash desks but that employee had gone as well so I waited for another few minutes by the customer desk. A lady came out of an office, who had seen me waiting from the beginning, and said she would be with me in a few minutes and went off. When she came back she invited me into the office to talk about the information. I asked if I could get info on getting a credit card. She asked if I had full time employment, I said no, I have part time employment. She asked how long I have been working there, and what my wage was a month. I answered, only since April as I was let go in my previous job, and I would get roughly €800 a month. According to what she looked up on the computer, I would need to be making a minimum of €1000, I would need to be in that job for at least 2 years, and have all my wages going into that account for the 2 years also. I am currently getting the wages into a different account but wanted to swap it over, but was told that I wouldn’t be able to qualify for a credit card at all and that was the end of the conversation, she just apologised. There was no effort to make sure I still swap my money into there account or anything.

 

“On a separate day, I wanted to check if my cheque had cleared but the queue was very long at each of the machines as well as the cash desks. I waited at one of the machines and checked my balance but it hadn’t cleared yet. I wanted to find out when it would, as I needed the money but the queues were way too long so I left. Later that day I phoned up the help line and they transferred me to an operator, he was quite helpful and efficient and gave me the information I needed. He also asked if i needed help with anything else.

 

 “In Ulster Bank in Liffey Valley, I asked for information on a credit card the same way as in Permanent TSB. Straight away I was brought into a room to discuss it. They have a set of forms to fill out to see if you qualify, he helped me fill out the forms, told me what extra paperwork I needed to put with it and when I brought the paperwork in he submitted them for me. I then received a letter in the post saying that I do qualify for a credit card and would I like to proceed in getting one. Not long after, I had my credit card ready to use.

 

 “I applied online for a savings account with Ulster Bank, it was very simple and easy to follow. There were lots of different types of savings accounts that you can set up, but they have all of them broken down into important bullet points on all of them and you can click to view all the details if you wish. It took 5 minutes to complete the application and submit it.

So, I’m going to be trying to sell some stuff online, just to test out different sales methods. I don’t expect it to be easy and I don’t expect to sell everything, but I’m gonna give it a go anyway.

What will I be selling, you ask? Or maybe you don’t ask, but I’m gonna tell anyway. Anything and everything, that’s what I’m gonna try sell. For a list of the items, see below:

Item 1: An old exercise bike.

Platform(s) used: Adverts.ie.

Asking price: €20. I have set this to be non negotiable.

Extra sales options: As of 21/11/2012, I have opted not to purchase any of the extras offered with Adverts.ie.

Status: Unsold.

Photo(s):

Description: Below is the description I added to the ad. I had a bit more in, but it seems the powers that be at Adverts.ie didn’t really like my view on An Post.

“This bike has been in my shed since a 21st party nearly 8 years ago. If it makes any difference, it was a good party! It has not been used since then. In that sense, it is untouched and could be described as very vintage. Ya may be into vintage stuff, I dunno, but you can describe it as that. I’d say it’s old school.

Mechanically, it’s flawless, except that it doesn’t work. Well, I say it doesn’t work, it might, and you might indeed be able to fix it, think of the saving you’d make?! I mean, a new one could cost you €200, this one could cost you €20? There are TEN €20 notes in €200, this costs you 1/10 of that, €20. You could buy an actual bike for the €180 you save, after you buy this, of course.

It’s also a little bit dirty, but if you really want I could give it a wipe down, that’s cool with me. In addition to that, one of the stickers on the side is hanging off and one of the leg cups is missing.

So, yeah, it’s €20. I can deliver it, within the Dublin/Meath/Kildare area.

To sum up; non working bike, lil bit dirty, €20, MASSIVE saving.

Short link: http://www.adverts.ie/2341373”

Item 2: CD/DVD racks.

Platform(s) used: Adverts.ie.

Asking price: €20. I am open to haggling on this to see if it gets more interest than the first item.

Extra sales options: As of 21/11/2012, I have opted not to purchase any of the extras offered with Adverts.ie.

Status: Unsold.

Photo(s):

Description: Below is the description I placed with this ad. It’s under review now:

“So I found more stuff in the shed that I wanna get rid of.

Here we have some real vintage stuff. 2, that’s right, 2 CD racks for the price of 1. Please note that these can also be used to hold DVD’s. Well, the grey, smaller one can, I’m not so sure the tall black one could. Although, if you were really stubborn about it you could probably prove me wrong and squeeze DVD’s in there.

The tall black rack is stand alone. You could put this in the corner of your room and it would stay there. Imagine it there, with your CD’s all organised, able to choose them whenever ya want, the luxury of it all.

The smaller grey one is meant to be screwed into a wardrobe or some such. I suppose you could screw it into a cabinet if you were really mad. It’s primarily for CD’s, but it could hold DVD’s no bother, again, if you’re a mad spoon altogether.

Who’d want this? Anyone really, who wouldn’t? People always have CD’s and DVD’s lying about. Now you could have them in one central location.

These two items must go together. I really think they’ve become attached to each other, kinda like puppies do. Ya know when someone separates puppies and they whine and ya feel really sad. Yeah, you know it. Don’t do it to these two!

So, to recap. 2 racks for sale, €20 for both.”

 

Item 3: .

Platform(s) used: Adverts.ie.

Asking price: €20. I am open to haggling on this to see if it gets more interest than the first item.

Extra sales options: I have opted to pay €3 to have this ad put at the top of the search results for 1 day.

Status: Unsold.

Photo(s):

Description: 

“This item would be perfect for multiple use. It could be used by paintball and air-soft enthusiasts as well as those with a keen interest in the outdoors. I suppose even a cyclist could use this. I cycle myself, I know how much of a pain a bag on your back can be as you fly through a red light and out into traffic.

There are loads of pouches and pockets that you could put your ammo in. You could also carry other bits and pieces in it, I dunno really, I’m not all that into air-soft. I like paintball, but not so much air-soft. I wouldn’t wear this to paintball though, ya’d look a bit stupid at paintball. Ya’d probably get away with it for air-soft though.

Alternatively you could use this for hiking/hill walking. Imagine all the water and snacks ya’d get into that? Ya could put them all into their own little compartments too, imagine the handiness. Go on, imagine it. Go get a nice warm cuppa, sit down, and imagine that. Although, in the time it’s taken you to do that then this will probably be gone.

I’m selling this because I don’t need it. I’ve never used it, although it has been taken out of its original packaging. By original packaging I mean the plastic bag in which it came. Ya don’t get much in the way of packaging for your €80. Yeah, €80. I bought this years ago when we all had money.

Anyway, it’s €20, preferably to someone in the Dublin/Meath/Kildare area so we can arrange delivery handy enough. If ya want me to post it then we’ll have to talk some more.

G’luck!”

Wrong! But you do have to make them think they’re right. That usually means some sort of manipulation. Although they may be wrong, ya have to make them, with subtlety, come around to your way of thinking. If you do that well enough then their memory of the experience is as follows:

The art of generating a satisfied customer is not in showing them they were wrong, but in making them believe they were right all along. At the end they should believe that they came up with the solution themselves. This does not negate the customer service role, but rather reinforces it.

Having worked in customer service in the past I can say that the customer is right about 50% of the time. This is mostly due to the fact that they jump in and complain straight away. It’s an offshoot of the “I NEED IT NOW!!!” mentality that is currently floating about. It’s people who don’t step back and take 5 minutes to consider all the facts at hand. Customers nowadays are masters at creating their own issues and then blaming the evil company behind it.

For this, I have a few examples (all real), and I would like you to ask yourself; was the customer right?

• A customer calls a customer service representative, threatens actual violence, representative invites him to the office.
• A customer walks into a shop, refuses to tell the cashier what they want/got, blames the company and apparently the fact that don’t hire people with telepathic powers.
• A customer sends an email in every half hour demanding that her issue is resolved, realises she was doing the wrong thing, blames the company.
• A customer spends 6 weeks demanding that the terms of her purchase are met, states the company is at fault, finally sends in a receipt after being asked to for 6 weeks. This customer purchased the product from another company, blames the company.
• A customer has a completely independent transaction issue with another company, emails in, blames the company.
• A customer puts €160 of Petrol into a Diesel truck, himself, blames the company.
• A customer emails in, states they can’t access the internet, they have no phone, needs a problem resolved, continues to email in, blames the company.

Now, next time ya head into a shop determined to rip the head off the nearest person with a name tag hop down off the righteous horse and think to yourself “Am I really right?”. Even if ya are right, relax, you’ll live longer.

Having considered the above, check out the links below. Remember, warnings on labels are there because somebody did the thing they’re telling you not to do. Think about that next time you’re waving a toilet brush at the power lines.

http://www.bored.com/crazywarnings/

“I like using the iPhone on the can in work, it’s the only break I get!” as a friend recently said to me. Why, I wondered? Because it was the only time he got to himself in work, that’s why. It’s not a new concept, it’s the new paper, it just looks a bit dodgy bringing a paper into the toilet in work.

How many times have you been sitting in the canteen and someone comes in and starts talking about work? Before ya know it your lunch has gone cold, your tea has gotten that horrible skin on the top of it and your 5 minutes late. That’s what has led to this; being social on the toilet. This can occasionally lead to:

We’re all go nowadays. We don’t switch off. We are accessible everywhere and at anytime. It’s not nice. It’s not handy. It is certainly not healthy. It used to be that you worked to live, or lived to work, whichever. But now? Now it’s everything, all the time. It’s why I go to places with no phone signal sometimes, just so I’m forced to switch off. Turns out that not been able to check Facebook can actually horrify you for a few seconds. After all, how will I inform the world that I’m out of reach at the moment?!