A UBC Commerce professor has discovered that North American banks
and credit unions rate what their competitors are doing as one of
the most important factors in deciding whether to boost their Internet
products and services.
“Surprisingly, customer demand, increased service and availability
around the clock are no longer the prime motivators for banks pushing
forward their Internet banking services,” says Commerce Asst. Prof.
John Tillquist. “Instead banks are waiting to see what their competition
does before offering or enhancing the products and services they
have online.”
Improving customer service, increasing market reach and reducing
costs are now basic expectations of Internet banking services, says
Tillquist.
In a survey sent to 1,182 U.S. and Canadian banks, credit unions
and depository institutions, Tillquist and UBC graduate Commerce
student Stan Chan found that the adoption of Internet banking practices
was a consequence of competition and what he terms “operational
readiness.”
“Operational readiness includes such things as technical, operational
and internal skill to migrate a bank’s services and products onto
the Internet,” says Tillquist.
He discovered that many smaller U.S. banks and credit unions which
face significantly less competition than larger banks have not felt
the same pressure to offer Internet services or to boost what they
do offer online.
“So the interesting implication here is that with our current climate
of competition, Canadian banks are poised to widen the gap in electronic
services compared with their U.S. counterparts,” he says. “We are
actually better off than the U.S. in terms of what our banks offer
online.”
Tillquist says that Canadians are rapid adopters of electronic
banking services — well ahead of Americans in the use of everything
from debit cards to online banking.
The range of Internet banking services varies throughout the industry,
he says.
“A lot of the banks and credit unions provide simple information
outlets online — phone numbers, interest rates, products and services
— while the more leading-edge sites handle advance financial transactions
including bill presentation and payment, insurance services, equity
and bond trading and so forth.”
The survey had an 11 per cent response rate. Results are accurate
to 95 per cent, 19 times out of 20.
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