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Despite digital push, 90% Indians still prefer branches over online banking

Of the 48% who don't have a digital banking app, one-fourth feel electronic transactions are unsafe

IANS  |  New Delhi 

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While the has been pushing people to go online when it comes to banking, the branch still continues to dominate channels in India, with 94 per cent of retail customers having visited the branch/store at least once in the past 12 months, a new study revealed on Monday.

According to the 2017 Oracle JD Power 'Retail Study,' despite the impetus provided by demonetisation, digital is not yet a pervasive experience in

"Most relationships still begin and continue at the branch. However, there is great potential for banks to move more into the digital space. Only 51 per cent of retail customers have a reliable online experience with their main financial institution," said Gordon Shields, senior director, J.D. Power, a US-based global marketing information services firm.

The results was based on in-person interviews with 5,368 retail customers conducted between February and April 2017 across 14 states and included both private and public banks.

"In fact, overall customer satisfaction with in is lagging significantly behind other key markets at 672 index points, compared to the industry average score reported in other J.D. Power studies in China (806), the USA (793) and Australia (748)," Shields added.

The study measured overall satisfaction in five factors: account activities (39 per cent); account information (18 per cent); facility (17 per cent); product offerings (14 per cent) and fees (12 per cent).

While overall customer satisfaction with mobile is markedly higher (693) than with In-Person Branch interaction (676), only 9 per cent of retail customers use mobile for everyday transactions.

"Among the 48 per cent of customers who have yet to download a app, one-fourth state lack of security is a key reason for non-usage," Shields noted.

Nearly three-fourths (73 per cent) of customers believe their financial needs were not fully understood before they were offered new products, with only 7 per cent having had fees and pricing of products explained.

"As embarks on its digitisation agenda, results on ground exhibit a contrary reality," said Kiran Kumar Kesavarapu, APAC leader, industry innovation advisors-financial services Oracle.

"We believe the issue lies in customer engagement models that Indian banks employ today and related security uncertainties when transacting online. This can be addressed easily and quickly," Kesavarapu added.

Private banks outperformed public banks and were rated higher in overall satisfaction (680) than public banks (666).

Private customers are more likely to recommend their bank to friends and relatives (89 per cent) than public banks (86 per cent).

First Published: Mon, July 03 2017. 12:58 IST