comScore, Inc., a leader in measuring the digital world, released the 2010 addition of its annual State of Online Banking Report. The study, based on a survey of more than 2,500 U.S. Internet users and behavioral data from comScore’s 1 million person online consumer panel, found that bank and credit card institutions experienced a decline in customer satisfaction for the second consecutive year as the economic environment weighed down consumer sentiment. On the positive side, the study also found that 64 percent of Americans now utilize online bill pay, an increase of 19 percentage points versus the previous year.

“It is evident that the economic climate of the past year has affected not only consumers’ attitudes and perceptions of their financial institutions, but also how they are interacting with them,” said Marc Trudeau, comScore senior director. “As economic conditions begin to improve, it will be important for banks and other financial institutions to focus intently on improving customer satisfaction and brand loyalty in order to retain and grow market share. Those who are effective in doing so will be in the best position to take advantage of new opportunities in the market as the economy returns to form.”

Customer Satisfaction for Online Brokerages Improves as Financial Markets Rebound

In 2010, 70 percent of survey respondents reported being satisfied with their primary bank, a marginal decrease versus last year. Despite the tenuous macroeconomic environment, however, the U.S. equity markets’ considerable recovery in 2009 has actually driven a net increase in customer satisfaction among brokerage customers. Some 64 percent of respondents expressed satisfaction with their primary firm in 2010, up 6 percentage points versus year ago, helping brokerage firms surpass credit card institutions’ overall satisfaction level, which declined 2 points to 60 percent.

Consumers Put Additional Emphasis on Customer Service When Opening New Accounts

When opening a new checking or savings account, free checking continued to reign as the most important attribute with 67 percent of consumers selecting this feature, followed by low minimum balance (37 percent), proximity of branches/ATMs (36 percent) and bill pay (24 percent). While most attributes experienced a marginal decrease in importance versus year ago, quality of customer service surged 18 percentage points to 22 percent of respondents in 2010, indicating a fast-emerging point of differentiation among financial institutions.

Online Bill Pay Gains, but Still Has Not Reached Full Potential

In the past year, online bill pay has experienced substantial growth in consumer adoption with 64 percent of survey respondents reporting they use online bill pay, up 19 percentage points from the previous year. Automatic/recurring bill pay also witnessed significant growth in the past year with 52 percent of respondents now enrolled in the service, up 10 points from the previous year.

Yet even with attractive promotions and user-friendly online interfaces, 36 percent of survey respondents do not use online bill pay. Nearly one-third of the respondents cited security concerns as the main reason they do not pay bills online.

Mr. Trudeau added, “Fear and uncertainty about security are hindering the online banking community from further adoption of tools like automatic bill pay and keeping a significant segment of potential online banking customers offline. If financial institutions work to alleviate some of these concerns, there is still room to grow the online banking market.”

Additional Study Findings

Some additional findings from the study include:

- Customer satisfaction with bank Websites declined at all of the top five banks, despite significant investments in new applications, tools and bill functionality designed to help customers manage their personal finances.

- With increasing environmental awareness and financial incentives, 58 percent of respondents are now enrolled in paperless statements, up 5 points from last year. Of those with paperless accounts, 69 percent of respondents are enrolled in paperless options for their checking/saving, while paperless penetration rates are much lower for other financial products such as credit cards (47 percent), insurance (28 percent) and brokerage (16 percent).

- Only 30 percent of online bankers expressed interest in using online Personal Financial Management (PFM) sites. More importantly, only 10 percent are aware of specific online PFM sites and less than 4 percent currently use the tools.

The comScore 2010 State of Online Banking Report leverages behavioral data obtained via the comScore panel of 1 million U.S. Internet users as well as information gathered through a survey of more than 2,500 U.S. Internet users to provide an in-depth look at online banking today. The report provides comprehensive insights into service usage, consumer satisfaction, paperless banking and personal financial management.