MasterCard RPPS Home Page | RPPS Update Archives
Editorial Viewpoint New Light on Consumer Confidence Spotlight On Consolidated Credit Counseling Services, Inc. Spotlight On Huntington National Bank COVER STORY 2005 Customer Symposium Takes a Wide-Angle Look at Electronic... CASE STUDY PNC Bank Leverages MasterCard RPPS Connection As It... EMPLOYEE RECOGNITION Two Team Members Recognized for Exceptional... NEWS REPORT Consumer Marketing Program Drives Adoption of Online... WELCOME New Customers! INDUSTRY INSIGHTS Q&A with David Jones, Ph.D.		EDITORIAL VIEWPOINT - By Cathleen M. Conforti New Light on Consumer Confidence Thanks to multiple studies over the years, we all know that security concerns have a significant impact on consumer use of online bill payment and other online banking functions. A new MasterCard RPPS study, conducted by Harris Interactive, supports that finding, but it also introduces an important twist: security issues are about as likely to encourage use of the online channel as to discourage it. Among survey respondents who have online access but do not pay their bills online, just over half (51%) cited concerns about the security of their personal financial information as the reason for this behavior. Similarly, just under half (47%) of the respondents who pay bills online through their financial institution's Web site said they do so because they believe it is more secure, citing confidence in their financial institution's security measures.* This confidence tells us that financial institutions are taking a proactive stance not only in protecting their Web sites from fraudulent activity, but also in communicating their efforts to their customers. While consumers may be split over security concerns related to online bill payment, the survey results show that increasing numbers of Americans are relying on their financial institution's Web site for a secure, convenient place to handle their bill paying. As consumers become more familiar with the safety and reliability of electronic transactions, the number of bills paid online will continue to grow exponentially. By 2008, the number of consumer bills that will be paid online through a bank will more than double, according to the research firm Aite Group. A recent report by the firm predicts that between 2004 and 2008, banks' Web sites will increase their share of total consumer bill payments by 8 points—from 6% to 14%.† Despite the growth, a significant number of consumers still need to be educated by their financial institution about the security of online bill payment. Consumers need to understand that the majority of fraud does not occur online at all, but rather through traditional, paper-based channels. Indeed, according to Gwenn Bézard, a research director with Aite Group, the likelihood of consumers having their paper bills stolen from the mail is 10 times higher than the risk of fraud online for consumers viewing and paying bills via their bank Web site. That information, along with a related incentive, could help bring more consumers to the online channel. Survey respondents who do not currently pay their bills online through their financial institution's Web site were presented with a list of seven incentives designed to entice them to change their behavior. More than a third of these respondents (35%) chose zero-liability protection against any fraudulent activity with their account as the number one enticement. Interestingly, the second choice (17%) was the ability to make payments that are credited on the same day. Institutions can enhance customer security in a number of ways—from zero-liability protection to more robust authentication measures—but the most important component of the security system may well be communication with customers. Customers need to hear that measures are in place to protect them. It provides peace of mind, and as the survey shows, peace of mind is the first thing consumers want. Financial institutions can take this opportunity to demonstrate their advocacy for their customers' interests. As a recent study from Forrester Research, Inc., demonstrates, customer perceptions on this score are pretty low overall. When Forrester asked more than 5,000 U.S. consumers to rate their financial institutions on customer advocacy, only seven out of 34 institutions received a positive rating from a majority of respondents.‡ We believe that once the reluctant consumers understand the security measures their financial institutions have in place, they will join the millions of other consumers who are already taking advantage of the benefits online bill pay can offer. * If you would like to receive the results of the Harris Interactive study, please contact Jennifer Covello at 914-249-4853 or jennifer_covello@mastercard.com. † Aite Group, LLC, February 9, 2005, Consumer Bill Payments: New Entrants Are Back (report #20050209). ‡ Forrester Research, Inc., June 10, 2005, How Financial Firms Rank on Customer Advocacy: Consumers Rate 34 Top Firms on the Trait That Deepens Customer Relationships, by Bill Doyle with Bruce D. Temkin, Peter Hult, and Adele Sage. Printer Friendly Version Back to Top