Cause and Effect: If you build it, will they come?

by Jason Weinick July 23, 2014   Spotlight

This is an excerpt of an article original posted on Bank Systems & Technology.

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that customers who adopt digital banking and develop into active users also become more profitable.

Jason Weinick photo 2014Digital banking tools encourage customer behavioral changes that benefit banks. Offering remote deposit technology can allow financial institutions to create a more engaged experience for their customers and alter their banking behavior. For example, banks may find that customers that use Remote Deposit Capture (RDC) leads to increased deposits due to the convenience of the service and the fact that it incorporate familiar technology. A 2012 Javelin Strategy & Research study mentioned that more than one in four consumers found mobile deposit desirable or very desirable and about 80% of consumers who desired mobile RDC already actively used their mobile phones to take photos.

As customers rely on digital tools for one function, they are primed to move to another. Financial services can seize on this opportunity by actively cross-promoting their offerings to customers who might not be otherwise inclined to adopt new technologies.

Non-digital customers still matter—but the growth is clearly on the other side of the coin. Once a customer moves online, the more profitable they become. The opportunity then lies in keeping those customers engaged with a breadth and depth of online and mobile offerings supported by targeted marketing programs that drive adoption and active use.

For the full article on Bank Systems & Technology please click here.

Jason Weinick is Manager of Analytics with Digital Insight. In this role, he leads the initiative on client profitability analyses, providing banks and credit unions a valuable in-depth look into the value of the online channel. Jason’s background includes 15 years of experience within the financial services sector, focusing on consumer behavior, risk modeling, reporting and financial analysis.

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