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Most recently, she managed the Consumer Internet Services Division for Wells Fargo Bank. Before Wells Fargo, Graeber led the Interactive Banking Group for Bank of America. Q: Although online bill payment has more than doubled during the past four years, just 18% of online consumers actively use the service. How would you categorize the nonusers, and what is keeping them from paying their bills online? A: Forrester's research with online consumers has found three key barriers to online bill payment adoption. First, the nonadopters have security and privacy concerns. Almost half of online consumers cite these as the reasons they don't pay bills online. Second, nonadopters are happy with their bill payment behavior today-writing checks. Forty-six percent of nonadopters reported it was easier to write checks vs. pay bills online. The third barrier to using online bill payment is the fee charged by financial firms. Thirty-eight percent of nonadopters cited not wanting to pay a monthly fee as the reason they didn't use online bill payment. We also see that nonadopters have not been online for as long as active bill payment users, so they aren't as experienced with the online channel. From a demographic standpoint, nonadopters are also less affluent and higher percentages are women - compared to active online bill payers. Q: What steps can financial institutions take to win over holdouts, fence-sitters, and quitters? A: First and foremost, financial firms should reconsider the monthly fee. Those banks that have done that in the past couple of years have seen dramatic growth in the number of active online bill payers. Forrester did a study of its bank clients who had gone free vs. those who still charged a fee and found that the "free" bill payment banks had a 78% higher quarterly growth rate in active bill payers vs. the fee-based bill payment banks. Firms also need to address nonadopters' security concerns head-on, because they aren't going away. Financial firms need to offer an online security guarantee to quell those consumer fears. In terms of online bill payers who have quit using the service, our research with this group found that 4 in 10 would have continued using the service if the bank had offered the service for free. These bill payment quitters also reported they would have continued using the service if it was easier to use and the payment lead time was reduced. When online bill payment is too complex to use, the quitters reverted to their old bill payment behavior, writing checks. Q: With so many electronic payment options (e.g., recurring electronic debits, credit and check card payments) competing for consumers' attention, how can financial institutions effectively communicate their online bill payment services to customers? A: From talking with our clients, we see that the banks that are having the most success in growing online bill payment adoption are utilizing their branch staff to sell online bill payment. Examples of the tactics successful banks are employing include putting a lot of marketing effort into actively selling employees to use the product - knowing that makes them better sales people for online bill payment - and deploying online stations in branches that allow branch staff to integrate online banking and bill payment sales efforts into the new account opening process. The branch employee is able to walk the customer over to the online station and help him or her enroll in online services. Successful banks are also utilizing all customer touch points - statement envelopes, ATM and IVRU messaging, branch merchandising, and website home page advertising - to tout the features and benefits of online bill payment. Q: Several nonusers of online bill payment have cited the complexity of a financial institution's online bill payment service as a barrier to adoption. What enhancements can financial institutions incorporate to make their offering more user-friendly? A: Firms need to focus on enhancing the usability of their online bill payment service. That means using a navigation structure that's task oriented, condensing the amount of screens that a user must go through to schedule a payment. And context-sensitive help that will lead novice users through the task at hand is also critical. The last "to-do" I'd mention is to shortenthe lead time for payments. Both nonadopters and bill payment quitters cited frustration with having the money deducted from their account long before the payment was due. So it's critical that firms enhance their bill payment offering by showing individual biller payment lead times and offering same-day and next-day payment capabilities. Q: Recent Forrester research has shown that roughly 4 in 10 online consumers are interested in money management capabilities from their online banking service. What specific services are they looking for, and how can financial institutions take advantage of this opportunity? A: Forrester recently surveyed online consumers about their money management habits and interest in online money management tools. We asked consumers about their interest level in capabilities such as online check registers, budgeting, expense and income categorization, etc. We found very similar interest levels in all of these tools: 4 in 10 online consumers reported being interested or very interested. The interest level varied by consumer segment: we found that the younger the consumer, the higher the interest level. The Gen Y segment (18 to 28 years old) had the highest interest level on all the capabilities we asked about. Fifty-seven percent of this generation reported interest in the ability to create and track a budget online and receive alerts if they overspent in key budget categories. Interestingly, our research found that current Quicken and Money users had the strongest interest level in these money management tools being integrated into their bank's online banking service. Tops on their list - 54% were interested in automatic categorization of expense, followed by 49% of this segment expressing interest in graphical displays of budget versus expenses, or progress against savings goals. Printer Friendly Version Back to Top