Online Still Represents Lion's Share of Digital Investment

A report on the state of multi-channel banking by Forrester also found that many banks are unprepared to support multi-channel initiatives.

The online channel still represents the majority of most banks' digital investment, according to a new study from Forrester Research and the Consumer Banker's Association.

The report, titled "The State of North American Digital and Multichannel Banking 2013" polled 21 U.S. and Canadian retail banks and found that more than half indicated they are spending $10 million or more annually on their online presence alone. Mobile investment accounted for about one-third of the overall digital investment, Forrester found, with about half of the banks reporting planning to spend between $1 and $5 million on mobile investment. However, four respondents indicated they would spend between $10 and $25 million on the mobile channel.

Overall, topping the list of 2013 digital investment priorities are infrastructure upgrades, online sales and services upgrades, as well as mobile redesign. Online money movement also continues to rank high on the list of investment priorities for those polled as well as website redesigns.

The report also found that consumers are adopting digital channels at a rapid pace. In 2012, consumers in the U.S. who opened financial products reported that they opened 37% of those products online, 2% by mobile, and 40% in a branch, according to Forrester. Online sales have increased seven percentage points since 2010, with most of that increase coming out of mail sales, the firm said.

Digital channels are greatly impacting the way that banks service customers, the report found, with four of the top banking activities — paying a bill, viewing balances/transactions, viewing a statement, and transferring money — being conducted 60% of the time or more often via the Web. The only non-online-centric servicing activity is depositing a check; 69% of money deposits today occur via the branch, but Forrester said it expects this number to steadily decline with the mainstreaming of remote deposit capture.

Forrester also found that the overwhelming majority -- 88% -- of digital bankers use two or more channels to interact with their bank, and 46% use three or more channels in a given year. However, the study also found that current investments in multi-channel are not supporting capabilities to serve this kind of connected customer. While 20 of 21 banks surveyed indicated they have a digital strategy, only 3 out of 21 believe they have the budget needed to support multi-channel initiatives.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio