Online Banking Powerful Retention Tool

Marketing studies like the one commissioned by Fiserv, which develops online bill paying systems, showing that using the Internet to pay bills, do automatic deductions and send electronic checks reduced customer turnover for banks by up to 95 percent in some cases. The 2008 study concluded that customers who made five or more payments online a month were 95 percent less likely “to churn,” while consumers who didn’t bank online were 43 percent more likely to leave.

Bankers are emboldened by new statistics which show fewer consumers are switching banks in spite of higher fees. Just 7 percent of them estimated to be moving their primary account to a different institution in 2011, down from 12 percent last year, according to surveys by Javelin Strategy and Research.