Online banking has numerous advantages. Speed and convenience are two of the most crucial factors. Online banking allows users to access their accounts, read statements, make transactions, pay bills, and much more from the comfort of their own homes or on the road.
It’s no wonder, then, that in 2021, 76 percent of Filipinos used online banking. Despite the advantages, marketers in this industry face unique hurdles. The main concerns and challenges in the internet banking business are discussed in this blog.
The issues are critical not only for banks that provide online banking, but also for their consumers who rely on the institutions to function properly. These issues must be understood by online banking marketers in order to handle them effectively.
Let’s get started
Shifting Banking Habits
During the pandemic, online banking usage has increased dramatically. Since March 2020, enrolment in Philippine banks’ internet banking services has increased by 137 percent.
Online banking popularity increased as a result of the lockdown limitations; presently, up to 80% of customers prefer online banking over visiting the bank, and banks all over the world are closing their physical branches.
A rise in contactless solutions has accompanied this rise in digital banking usage, notwithstanding social distancing practices. In 2020, Mastercard predicted a 40% rise in global contactless transactions. The need for totally virtual, contactless banking solutions will continue to grow as consumers transition to digital and businesses begin to expand their ecommerce capabilities.
Furthermore, wearable payment device use has increased, with experts predicting that the market value of wearable payment technology would rise at a compound annual rate of 29.8% between 2021 and 2028.
Banks must keep their product offers current in light of the rising shift in digital banking habits. Marketers must ensure that consumers are aware of their bank’s comprehensive product offering as they add more online banking capabilities, boosting their online banking experience and exposing them to the numerous benefits that come with doing business online.
The inherent risks that are typically connected with banking online, one of the most major challenges for online banking marketers is security. Cyberattacks and fraudulent conduct are still a reality, despite the fact that financial systems are meant to be nearly impervious.
However, many users are unaware that their online behaviors are putting them at risk.
71 percent of fraudulent bank transactions are carried out through mobile browsers and apps. Fraudsters prey on the user’s lack of privacy awareness.
People are prone to online attacks like login credential theft and phishing, which could result in fraudulent financial transactions, due to issues including weak passwords and accessing unprotected networks.
Online banking marketing specialists must demonstrate and explain the security of their online banking systems, as well as educate clients on how to be more careful online by improving their privacy and security habits. Multi-factor authentication and the use of passwords are also good places to start.
We risk experiencing technology and service outages whenever we utilize the internet. If your internet is sluggish or unavailable, system stability and efficiency can limit your ability to access your accounts. Similarly, no matter how advanced the technology, bank systems are still vulnerable to both deliberate and unintentional outages.
Not only are users unable to make payments or perform transactions when the system is down, but there are also issues regarding data and fund security. Every year, downtime can cost firms up to 450 million pesos.
Customers should be reassured that their funds are not at jeopardy if technical faults arise, according to marketers. They should, however, ensure that planned system downtime, such as scheduled maintenance, is adequately communicated to customers so that they are aware of service interruptions.
Lack of Personal Relationship
Despite the fact that 73 percent of individuals use online banking at least once a month, more complicated consumer needs can be challenging to address with digital banking alone. The advantages of having a personal contact with your bank are often ignored, as bankers can often make negotiating difficult banking issues easier.
Customers may compare their alternatives and find solutions specific to their needs with an in-person banking relationship, which is not as easy to achieve with self-service.
A combination of online banking for day-to-day transactional needs and personal relationships with bank staff to assist customers in finding the correct solutions for their overall banking needs would be ideal.
Marketers may achieve this balance by letting clients know how to contact actual people while also making sure their digital banking experience is simplified and simple to grasp. This will assist clients in both the digital and physical banking environments be as informed as possible.
One of the most significant innovations in the finance business is online banking. Despite the numerous benefits for clients, we also discussed the significant problems that marketers confront in online banking.
However, we hope that we’ve shown how these difficulties may be transformed into opportunities to improve procedures and consumer involvement.
Consumer preferences are changing, and technology developments, as well as security and technological issues, are all important difficulties that online banking marketers must overcome in order to succeed. Demand is great, and when marketing obstacles are resolved and new customer needs are met, digital banking apps and challenger banks will only become more advanced and successful.