European "online banks could do better"

European banks' online offerings could do better – that's the findings of a recent study into internet banking. It seems the banks are afraid of destabilising their classic economic model based on bricks and mortar branches by developing value-added online services.

Banks' online banking services have succeeded in winning the trust of European web users but huge progress remains to be made, according to the study on internet banking, conducted by the Novemetrie Institute and European Financial Management & Marketing Association (EFMA) in association with Capgemini, HP and Microsoft.

The study interviewed 30 directors of European banks and over 1,000 European users of online financial services. The main conclusion: the interviewees attributed a greater level of satisfaction with internet sites – 57 per cent – than with of physical branches (35 per cent) and phone banking (29 per cent). They put that down to ease of access, pricing frameworks and even the quality of the advice and knowledge of the customer's financial profile.

On the other hand, certain weak points have come to light, such as dialogue by email with banking advisers. "Around three-quarters of the interviewees don't know the email address of their head of customer service and only three per cent of the sample regularly communicate with their banker by electronic messaging," the study said.

EFMA's Patrick Desmarès said that "banks are still in the Stone Age when it comes to email. It's an inherent catastrophe – customers don't know who to address their emails to and banks are reluctant to give out the email for customer services."

For the bankers, the internet has become "one distribution channels among many, without the specificity or products and services innovation; it's a subset of the global offering," the study says.

It's purely on that point that users get critical, however – the online offers lack valued-added services, according to them.

"Banks have put an array of basic services online but have they done everything it's possible to do?" said Desmarès.

"Users are frustrated to see that they haven't gone very far, which leaves them confused when you think of the huge sums invested, among others, in CRM software. Banks haven't used the internet to transform their economic model; they've only seen it as a way to cut costs."

The study itself doesn't stop there: "The development [of value-added] services would cruelly pose the question of the role of branches and those who work there."

The report also questions whether the banks' directors are afraid of unbalancing their economic model – which is largely based at the moment on their physical presence.

Estelle Dumout writes for ZDNet France