Big banks use IT to fight new online players

Online banking operations have been picking up customers at the expense of high street brands - but now the big banks are starting to fight back.

Sainsbury’s Bank claims the number of visitors to its website have doubled in the last year and points to research from NOP World Financial, which predicts that consumer spending on financial services online will jump by 27 per cent, with 4.2 million people making their financial arrangements online.

Sainsbury’s said the highest volume of visitors to its site comes between 13:00 and 14:00 in the UK. Four out of ten visits come between 17:00 and 09:00, and six per cent do their banking between 23:00 and 06:00.

The bank said it now sells around a third of its financial services products online, with the most popular purchases including loans, credit cards and car insurance.

Benjamin Ensor, senior financial services analyst at Forrester, said high street banks need to improve their customer service and differentiate their offerings if they are to fight off new entrants.

“Consumers are a little bit more sceptical about financial services firms. They need to create a step change in the customer experience - the banks have to raise their game a level by providing a better service or we will increasingly shop around,” he said.

But he said the big banks have been working on their back-end systems and customer databases to get a better understanding of their customers and using technologies such as descriptive analytics to get a better understanding of customers.

Some banks are getting close to a "real-time single view of the customer” he said, which means that they can offer targeted products when customers phone a call centre for example.