Ask the Experts: What Impacts Consumer Adoption of Online Banking Products?
In this edition of our “Ask the Experts” series, we catch up on the latest research concerning consumer adoption of online and mobile banking services with business experts from leading colleges and universities.
While banking was once characterized by quaint features such as the ability to stroll down to the neighborhood branch, where the tellers knew your name and might even give your child a lollypop, the combination of competition in the industry and advances in technology has fostered the simultaneous decline in face-to-face customer service and rise of electronic account management. We’re now seeing paper checks make way to prepaid cards, banks offering online-only services in greater numbers, and a rapidly growing market for mobile wallets, among a number of other notable changes to the tools of the trade.
That’s no big deal for those of us who’ve grown up in the Internet-age, but it’s fair to wonder how our parents, other older consumers, and segments of the population that have limited access to computers and smartphones will manage to make full use of these newfangled products and services. I mean, my dad just the other day asked me how to copy and paste something from an e-mail, how’s he supposed to digitize his payments?
Believe it or not, but Pei-Yu Chen and Mei Xue – a pair of researchers from Temple University and Boston College, respectively – have looked into just that. (Well, just to be clear, they’ve studied the adoption of mobile banking services by consumers in general, not just my dad). We at WalletHub recently caught up with them as well as a few other industry experts to get a better sense of the obstacles facing both the online banking industry and the consumers trying to operate within it.
You can check out their insights on the various issues listed below or simply jump to the Takeaways section for a quick synopsis:
- The Impact of Age and Tech Savvy on Online Banking Use
- Mobile Banking
- Digitized Federal Benefits
- Timetable for Adoption
Ask The Experts
So, what did we learn from these experts? Here’s the Cliff’s Notes version:
- Age negatively impacts adoption of online banking products and services: This is true whether you’re talking about online account management or a smartphone-based mobile wallet.
- Tech savvy increases a given consumer’s odds of and timetable for adoption of electronic banking: Without having to learn how to use the technology in question, the primary barrier to entry is a consumer’s perception of the value of the product.
- A number of other factors influence consumer adoption: Social factors such as word-of-mouth and proximity to early adopters, product reputation, and compatibility with existing products and services are important as well.
- It can take as long as 18 months for even early adopters to embrace a new product: Timetables vary based on the nature of the product as well as its reputation and value proposition.
- Digitized federal benefits shouldn’t present too many problems: While there will undoubtedly be a learning curve for many people, particularly those who were previously unbanked, it should be neither long lasting nor particularly rough.
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