Customers And Their Needs Essay
Internet usage and online transactions have picked momentum in all fields. According to the vice president of the Banking Group Advisory Services, Bob Landry, by the year 2010, 68% of the consumer payments will be electronically based and this is expected to grow to a 75% by the year 2017. Internet banking has emerged significantly mostly because of the development of technology that the banking industry had to respond to in order to effectively meet the changing needs of the customers.
Customers today do not want to transact through the branches and expect their banks to provide the convenience of online banking and thus the banking sector cannot choose to ignore this change in consumer attitude. Furthermore, internet banking provides numerable advantages to both the banks and the customers. One of the biggest advantages of internet banking provision to the financial organization, that is the bank, is the competitive edge it gives.
It is an additional service provided to the customer, and in the world of services one of the key differentiating points is the value additions done to it and additional things provided to the customer (Lancaster, G. and Reynolds, P. , 2005). It will thus help the bank to not
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Booz, Allen & Hamilton (1999) states that the cost of a transaction at a branch is roughly more than one dollar, providing the same through an ATM costs 25 cents while transacting through the internet costs just a penny, and there are expectations that these will further go down in the future. In addition, it reduced a lot of paperwork and thus the administrative costs also go down. Another significant advantage is that it allows banks an extended reach to the customer as internet is wide and global and thus a bank can have a customer in any part of the country, city or in fact the world.
Thus, it has a higher reach to its client base which enables it to attract a larger amount of customers. Combining this with the cost advantage, the bank can reach thousands of clients at one single time. Overall, it helps to reduce the operating costs of the banks which in turn enable them to offer better interest rates to customers and earn a higher profit margin themselves too. An important benefit to the bank is also the branding opportunity that such a service provides. Internet banking provision helps to develop and strengthen the relationship of the bank with its customers.
It provides them with a basis to have a continual, ongoing satisfactory relationship by providing the customer ease and value added service. It thus improves the perception of the quality of bank in the eyes of the customer which in turn leads to repeat purchases and higher brand loyalty. Last but not the least, it enables a bank to keep itself upgraded to the latest developments in the industry, and ensure that it has a portfolio of service for all kinds of customers, whether they prefer traditional banking or online banking.
The bank will not be in a state of myopia and perceived to be a modern, forward looking entity. Internet banking also has numerous advantages for the customer. The greatest advantage to a customer is that of convenience and ease provided by the online banking system. They do not have to stand in long queues at the bank branches, or travel to them and waste their time and energy since they can simply perform the same tasks sitting at the convenience of their homes. In addition, the same tasks will also take a lesser amount of time than it would to do it manually at a branch, thus reducing transaction time.
Also, customers can avoid the tiresome, confusing and time taking paperwork. The work can simply be done on the click of the mouse, saving them from the hassle of paperwork (Bora, 2010). Another significant advantage is the accessibility which means the customer can access his account and do a transaction at any time of the day even when the bank timings are off. It also provides the customer with a one stop solution since he can do almost everything from checking his bank statement to transferring money to other accounts to applying for a loan to paying his bills online.
If the customer is away from home and there is any sort of emergency, all of it can be handled online effectively with ease and reduced tension. One important advantage to be mentioned is that of cost savings. Banks charge fewer banking services charges when transactions are done online and thus customers can save money. Also, they offer higher interest rates due to low operating costs which the customer can benefit from (Mel, 2009). Having such numerous benefits for both the sides, there is no room left to doubt the efficacy of the internet banking provision.
All the financial institutions have taken various measures to improve the security of online banking and there is no doubt that the use of such services will increase in the future. Internet banking has come a long way and has shown remarkable progress over the years which it will continue to do in the coming future as well. BIBLIOGRAPHY Bora, C. , 2010. Advantages of Internet Banking Buzzle Articles, [Online]. Available at: http://www. buzzle. com/articles/advantages-of-internet-banking. html [Accessed 3 May 2010] Brent, W. , 2010. Evolving US Payment Systems and Bank Delivery Channels: Death of the Teller…
Again? (Part I). Mercator Advisory Group, [Online]. Available at: http://www. pr. com/press-release/208559 [Accessed 3 May 2010] Comptroller, 1999. Comptroller’s Handbook. Available at: http://www. occ. treas. gov/handbook/intbank. pdf [Accessed 3 May 2010] Lancaster, G. and Reynolds, P. , 2005. Management of Marketing. Oxford, UK Elsevier. Mel, C. , 2009. Benefits of Internet Banking. Articles Base, [Online]. Available at: http://www. articlesbase. com/finance-articles/benefits-of-internet-banking-1837521. html [Accessed 3 May 2010]