At Forrester we strive to tell clients something they don't already know. If our insights happen to fly in the face of conventional wisdom -- well, so much the better.

For example: Most online consumers who don't already bank online say they never will. Many banks take them at their word. But we're convinced that these customers' concerns are just a smoke screen that will dissipate over time. In "Online Banking 2004: Understanding The Mindset Of Holdouts, Fence-Sitters, And Quitters," Cathy Graeber shows how banks can boost adoption of the online channel.

Cathy uncovered another dangerous self-deception in account-to-account transfers. Banks have assumed that they'll hold onto balances if they make it difficult for customers to move money out. But innovators like ETRADE make account-to-account transfers easy -- and now these firms lure tens of millions of dollars away from the largest banks every month. In "ETRADE Wins On Multiple Fronts With Free Account-To-Account Transfers," Cathy explains why most big banks will continue to lose balances.

Banks didn't see these deposit balance losses coming, because they haven't been measuring what matters most to customers. In "Bank Customer Satisfaction: A Poor Predictor Of Future Purchase Intention," Ron Shevlin shows that customer advocacy is the best predictor of real customer loyalty. One bank gets it: "ING Direct Lets Customers Grade The Bank" shows how the fast-growing thrift measures its success. Big banks, on the other hand, don't get it, and as a result, only 30% of the average bank's customers will consider it for future deposit or credit product purchase (see the figure above).

Where else is conventional wisdom wrong?

Banks are creating fraud hotlines and helping consumers report identity theft to law enforcement and credit bureaus. But banks fail to recognize their own role in identity theft. In "Financial Institutions Are Unwitting Contributors To Identity Theft," Jonathan Penn describes what banks should do to secure customers' accounts.

Big banks also don't believe that Gen Yers are worth much marketing effort. But in "Why Banks Can't Afford To Ignore Gen Yers," we show that banks are missing an opportunity to attract customers who cost less to serve today and have the potential to be more profitable and loyal customers in the future.


Got feedback?

As always, we're eager to hear from you. Do you have topics to recommend, data you need, or technologies you want assessed? Drop me a line at billdoyle@forrester.com so we can connect.


Bill Doyle
Financial Services Research Director

Research Referenced In This Issue Bank Customer Satisfaction: A Poor Predictor Of Future Purchase Intention (35238) E*TRADE Wins On Multiple Fronts With Free Account-To-Account Transfers (35113) Earning The Loyalty Of Banking Customers (34613)    Financial Institutions Are Unwitting Contributors To Identity Theft (35333) How Consumers Pay For Financial Advice (35259) How Investors Choose Direct Brokerages (35395) ING Direct Lets Customers Grade The Bank (35239) JP Morgan Chase Insources Megadeal (35485) Online Banking 2004: Understanding The Mindset Of Holdouts, Fence-Sitters, And Quitters (34622) Online Bill Pay 2004: Understanding The Mindset Of Holdouts, Fence-Sitters, And Quitters (34469) Profiling IT In The Financial Services Industry (35346)

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