A 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 24 hours
a day, seven days a week are no longer the prime motivators for banks pushing
forward their Internet banking services,” says 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.
He recently released the results of a survey sent to 1,182 U.S. and Canadian
banks, credit unions and depository institutions to find out what motivated
a bank manager, executive or strategist to add or improve a bank’s Internet
products and services.
Tillquist and UBC graduate Commerce student Stan Chan found that the adoption
of Internet banking practices was a consequence of competition and what Tilquist
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.
“The interesting implication here is that with our current climate of competition,
Canadian banks are poised to widen the gap in electronic services compared to
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 Canadians are rapid adopters of electronic banking services
— well ahead of Americans in the use of everything from debit cards to online
banking.
He also points out that the range of Internet banking services varies throughout
the industry.
“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 advanced financial transactions including bill presentation and
payment, insurance services, equity and bond trading,” he says.
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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