: The concept of touch and feel in handling money is gradually taking a back seat, courtesy the digitised form of banking. The recent times have seen a phenomenal interest by Indian consumers towards the banking and financial websites. Almost 19.7 million internet users in India visited business and finance sites in June this year, representing a 45% increase from the previous year, according to a study by comScore Media Metrix service.
With India emerging as a vibrant global financial centre, online finance is beginning to attract significantly more attention and drive more transactions than ever before in this market. Seeing this significant shift, Monish Shah, director, Deloitte India explains that the general level of financial literacy in India is increasing.
As financial products are getting complex, consumers are visiting banking and finance websites to seek more information. Another survey by Deloitte reveals that though the number of online transactions are increasing, most of the customers visit these websites to seek information. Only 27% of them are comfortable buying financial products online. Among all products offered, the most popular products bought online are credit cards followed by general insurance. Also, 60-70% customers across all age groups still prefer to take loans from branches. But undoubtedly online banking as a channel is becoming more favourable as 11-14% customers are willing to take loans online.
Though both the concepts go hand in hand, consumers have reacted differently to internet and mobile banking. Over the past two years, there have been only 5% registered users of mobile banking and only .05 % of the total are active users.
The growth of mobile banking in India is stagnant in India, unlike internet banking. And the reason is obvious. Shah from Deloitte says, “Online services are cheaper for banks as compared to mobile banking. In online banking-stakeholders are fewer, hence it is easy to get return on investment (ROI).” A mobile banking model involves coordination and integration among the telecom operators, banks and the regulations by RBI. This is not the case in internet banking- where bank takes the soul charge.
Sanjeev Patel, head and executive vice-president, direct banking channels, HDFC Bank agrees, “The transactions in mobile banking are relatively minuscule as compared to other established channels such as internet and ATM. Thus standalone costs for the mobile banking transactions are fairly high.” But analysts believe that pushing volume transactions both on online banking and mobile banking is the only way out for banks to derive revenues.
Nearly all of the top 10 most visited business or finance sites witnessed double-digit traffic growth in the past year as more Indians turned to the Web for financial information. ICICI Bank led as the top banking website in India with 4.7 million visitors, an increase of 40% from the previous year. HDFC Group followed as the second most visited site with 3.5 million visitors (up 58%) with the State Bank of India grabbing the third spot with nearly 3 million visitors (up 84%).
Further analysis of the most-visited online banks revealed that the top three received a significant portion of site traffic from markets outside of India . ICICI Bank saw 12.3 % of its traffic originate from other markets, with the US accounting for 5.4% of overall visitation to the site, the UK at 2.5% and Canada with 1.0%, leading as the three largest markets for visitation outside of India. HDFC Group received nearly 6% of its traffic from other markets (top three: US 1.5%, UK 0.7% and Singapore 0.3%). While State Bank of India received 6% of its traffic from other markets (top three: US 2.3%, UK 0.5% and Singapore 0.3%).
“With the top banks attracting a significant number of visitors from countries outside of India, these visitors, most likely non-resident Indians, represent an important segment for banks to address when developing and executing their digital strategies,” says Will Hodgman, comScore executive vice president for the Asia-Pacific region.
In the bigger picture, out of the total internet users in the US, online banking users constitute 50%, followed by 40% in Europe and less than 15% in India. The comScore survey reports that males accounted for 72% of visitors to the business/finance category, driving 78% of total page views and 78% of total minutes spent at the category, with the highest skews among males age 25-34. In June 2010, 19.7 million people age 15 and older visited a business/finance site from a home or work location in India , an increase of 45% from the previous year.
On the other hand, data from Deloitte reveals that the most frequent users of internet banking are customers earning less than 15 lakhs per annum. Customers with high income levels do not prefer internet banking. This could possibly be due to security concerns, low content quality of the bank’s website, preference for personal attention, etc.
Private banks fare much better than their PSU and foreign counterparts in terms of comfort level of their customers to use the bank’s website for utility bill payments. At an average, only 60% of total PSU bank customers are comfortable using this feature online as compared to 86% for private bank customers and 75% for foreign banks.
“With half of India’s online population visiting a business or finance-related site during the month, there is an opportunity to reach and engage financial consumers in a way that was not possible before,” concludes Hodgman. Thus, it is the right time for banks to explore and make online functions easier for consumers in the digitised world. This would further result in increased online transactions and higher revenues for the banks.
courtesy;Financial Express
