The Washington Trust Co. is promoting it as an environmentalist move. Sign up for online bill payments, a new campaign says, and you will be reducing wood, water and energy consumption, greenhouse gas emissions and solid waste production.
Of course you also will save on stamps, help avoid late payments and have more control over your finances, notes Q3 2007 September Bill Pay Sweepstakes sponsor Digital Insight of Calabasas, Calif., an Intuit Inc. company. But to stress the green aspect, anyone who signs up for online bill payments this month is automatically entered in a “Go Green” sweepstakes, with a Toyota Prius hybrid car as the grand prize. For every payment or $10 or more made through Sept. 30, to a separate account, they get another entry.
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“The whole purpose [of the campaign] is to go green,” said Charlene Davenport, a spokeswoman for the bank. She noted that research shows if all United States’ households paid their bills electronically, they could save 18.5 million trees each year.
But getting more people to bank online is also good for Washington Trust, as it is for most banks, which find it a more cost-effective way to provide services while strengthening and deepening their relationships with customers.
Banks have aggressively promoted online services for years now, and for a while, their efforts were very successful. A recent report from comScore, however, a global Internet market research company in Reston, Va., shows online banking growth has slowed dramatically.
While the number of consumers banking online grew by 47 percent in 2004, statistics collected by comScore show, in 2005 it only grew by 27 percent, and last year, it grew by 9.5 percent.
A separate report in May by eMarketer showed a similar slowdown, predicting an increase of 9.5 percent this year, to about 80 million U.S. adult Internet users, slowing to a 6-percent increase in 2011 – with 101 million users by then.
Both reports attribute the slowdown to a maturing of the market. Still, that doesn’t mean that banks don’t want to continue growing online banking, both by getting existing users to do more, and by adding new users.
Betty Reiss, a spokeswoman for Bank of America, a pioneer in online banking and the largest online banking services provider, with more than 22 million online checking account holders, said the biggest reason for promoting online banking is to strengthen relationships.
“When you look at online banking customers and compare them with similar customers who aren’t banking online, online customers have a deeper relationship with the bank,” she said. “They have higher loan and deposit balances. They stay with the bank longer. And that’s the value that we see.”
Representatives of Bank Rhode Island and Webster Bank had similar views on the value of online banking.
John Spear, senior vice president of corporate Internet at Webster Bank, said efforts to increase the number of online bankers is spurred by wanting to increase retention, since online bankers tend to stay with a bank longer.
Like Washington Trust, Webster Bank is investing in a campaign to get more customers enrolled in online bill paying, Spear said, because it encourages retention by requiring a great deal of effort on the consumer’s part to enter information into the system.
The hope is that it prevents a consumer from banking somewhere else because of the time it would take to shift the information to a new bank.
Bank of America, Webster Bank and BankRI have similar methods of recruiting consumers into online banking as well. Each of the banks relies heavily on point persons at the branches to promote the online product to the consumers when they open an account.
And, so far, the strategy has worked. About 62 percent of BankRI’s customer base uses online banking, and about 60 percent of Bank of America’s and 42 percent of Webster Bank’s.
James V. DeRentis, chief business officer for BankRI, said he isn’t concerned about the slowdown in online banking growth because he thinks as more and more consumers are exposed to the electronic medium, more will naturally adopt it.
Reiss said at Bank of America, the view is that to keep growing, “you’ve got to have world-class capabilities and continue to listen to consumers.”
Bank of America, for example, was one of the first banks to offer online bill payments for free, and it was the first major bank to roll out a two-step authentication feature, called SiteKey, to maximize protection of online accounts, she said.
And Bank of America has taken the security feature one step further by partnering with Symantec Corp., developer of Norton Antivirus, to give bank customers a free trial of the antivirus software for their home computers, and a discount if they buy it, she said.
Citizens Bank also recently revved up its online security features by rolling out a “Safe with Citizens” feature that challenges anyone signing into their account from a computer the system doesn’t recognize.
“One of the greatest concerns people have is the safety of their accounts [when banking online],” said Glenn Morin, senior vice president of internet strategy at Citizens.
The bank is also researching new functionality that appeals to Generations X and Y specifically, because they are the largest new market for online banking.
“What we are looking to do is provide functionality appropriate to each segment,” Morin said. •
