(December 20 – 12:30 ET) – Canadian banks are failing to meet the needs of their online banking customers, according to a major study conducted by Gomez, the Internet quality measurement firm.

The State of Online Banking study, the first of its kind in Canada, examines the online banking trends and market dynamics of almost 9,000 online adult users across Canada. The study also identified distinct groups of banking customers and revealed that banks have an immediate near-term market opportunity among customers who plan to begin banking online within the next six months.

Banks are achieving an extremely low penetration rate for online transactions, the study revealed. Only 1% of respondents reported having obtained mortgages online, 2.4% of respondents reported they had applied for a loan online, and only 2.1% said they had purchased a GIC online.

“The study shows that a surprising number of institutions still require physical-world activities to fulfill certain basic requirements that could be more efficiently handled over the Internet,” said Don Rolfe, managing director for GomezCanada. “Banks will need to offer innovative features, increased breadth of products, pricing advantages, and higher customer service levels, in order to give their customers a compelling reason to move their banking relationships online.”

A majority of those surveyed — 54.9% — used the Internet to view account balances, while 44% had paid bills online and 38.5% has used the Internet to transfer funds.

The report further identifies three waves of future active Web bankers: banking shopper, innovation seeker and the latent adopter.

Gomez identifies the banking shopper as the greatest near term market opportunity for banks in the first wave. Members of this group intend to begin banking on line within the next six months, with many currently revealing that they are shopping for an Internet bank.
-IE Staff