5 Ways Mobile Banking is beating traditional Online Banking

We have been taking a look at the survey listed in the latest consumer report from Consumers Korea. We found that Consumer satisfaction with internet / mobile-only banks was higher in five categories, among them bank fees and interest rates, compared to online banking services from traditional banks. Let’s take a closer look.

From the report:

Internet-only banks like K Bank and Kakao Bank are rated higher in consumer satisfaction than online banking services provided by traditional financial institutions, but trust issues with the online services remain.

Wire Transfers and Cash Withdrawals

The widest gap in satisfaction was found to exist in wire transfers and cash withdrawals, with internet-only banks (IOB) earning a score of 4.04 out of 5, while their counterparts lagged behind with a 2.75 score.

AAZZUR, N26, and other Mobile Bank users can withdraw cash from ATMs with no extra fees, and they also allow deposits and wire transfers without surcharges.

Savings Accounts

For savings, IOBs received marks of 3.66, compared to 2.59 for online banking services.

According to the Korean report for example, interest rates for savings accounts at traditional banks hover around 2 percent, even after accounting for promotional offers. Meanwhile, Kakao Bank offers products with maximum 2.4 percent and 2.7 percent rates.

Self-Identification Methods (KYC)

For self-identification methods, IOBs received marks of 3.82, compared to 3.22 for online banking services.

Greater satisfaction with IOB self-identification methods is believed to stem from their reliance on automatic services that scan for ID and biometric data rather than the cumbersome traditional banking face-to-face interactions. 

Personal Information and Security

IOBs even outperformed their counterparts when it came to personal information and security, areas that had previously attracted the greatest amount of customer dissatisfaction.

Customer Complaints

Again, IOBs outperformed their counterparts in Consumer Satisfaction when it came to both solving customer complaints, and the number of issues per customer.

General Trust

However, the Korean survey found that more consumers trusted traditional banks than mobile or Internet-Only Banks, as 75.2 percent responded that they trusted the online banking services of brick-and-mortar institutions, while only 38.7 percent said the same for entities like Kakao Bank and K Bank. 

The participants named privacy concerns such as personal information leaks as the most important problem associated with IOBs, and additionally expressed concern that without meeting face-to-face, occurrences of transaction problems could become an issue.

A total of 700 Korean users of mobile and internet services from traditional banks between the ages of 20 and 59 took part in the survey.