Web-only Banks Lag on Customer Service

Banks that have both a virtual and physical presence do a better job of servicing their customers on the Internet, according to a new study conducted by Atlanta-based Speer & Associates Inc.

The survey ranked 41 on-line banking sites on their levels of interactivity. The two that scored highest were Detroit-based Comerica Inc. and New York-based American Express Co.

Unlike most institutions, Comerica and American Express were doing targeted on-line marketing with their customers. Meanwhile, the majority of the other institutions had Web sites with lower functionality that merely allowed users to make enquiries and transactions.

However, even Comerica and American Express fell short of the standard set by other industries, which integrate external marketing data with internal customer database knowledge and Web site usage information, according to study author George Albright, chairman of Speer & Associates.

“Without better use of the interactive marketing capabilities enabled by the Internet, financial institutions are missing the principal opportunity presented by the Web,” said Albright in a statement. “As this occurs, sales opportunities will be squandered. But more importantly, customer relationships will be lost to more aggressive firms with highly developed Internet marketing capabilities.”

He added that leading Internet firms in other industries improve their Web sites as often as once a month.

“The financial services industry cannot keep pace with customer expectations or exploit marketing opportunities on the Web by maintaining traditional development timetables and marketing information system priorities,” he said. “Transactional services are not the endgame.”

Banks have been slower to move on-line than other industries, and slower than other types of financial institutions, said Mark Macklin, an analyst at Cambridge, Mass.-based Forrester Research Inc.

“They have the old way of banking,” he said. “The culture internally remains the same. You still have people making decisions who may get the Internet but they don’t necessarily know how to implement the Internet.”

By comparison, he said, San Francisco-based brokerage firm Charles Schwab Corp. updates its Web site at least once a quarter — and usually more frequently than that.

The two Web sites that ranked highest in the Speer survey pride themselves on updating their Web sites frequently.

“We’re constantly improving it,” said American Express representative Desiree Fish. “American Express, in creating a Web site, created it to be a destination site — and that entails everything from travel to shopping to bill paying and checking membership rewards.”

American Express launched its Membership Banking Web site last July, she added.