The previous chart shows that all banks have a non-negligible number of customers willing to change their bank when provided with better condi-tions elsewhere. Though this question concerned exclusively the realm of Mobile Banking, the responses that it generated have significance for banks in general.
It is sometimes argued that survey participants generally respond on these lines to such a question, for it is in their own interest to do so. More-over, it is claimed, they do not take such drastic measures when actually confronted with a price-hike. This argument, though undoubtedly valid to a certain extent, might prove to be misleading in this context. First, low cus-tomer loyalty must be taken seriously especially while designing products for a saturated market characterised by high competition. Secondly, many of Mobile Banking users have an affluent background and often own more than one bank account. Therefore, it is easier for them to shift their transac-tions from one bank to another without any noteworthy hassles.
An example for this phenomenon can be found at First Direct, a direct bank in England. This bank provides free-of-charge SMS service with bal-ance details and list of transactions 2 times a week. A survey amongst its
Price-sensitivity of customers acoss bank-groups
0%
10%
20%
30%
40%
Big banks Direct banks Savings banks
Cooperatives Others
new customers revealed that every 8th new customer (nearly 12%) changed to First Direct because of this service, see [Karsch, 2004, p. 71].
9.1.4 Customer Response to Service Offers
Having elicited the customer perception of Mobile Banking and issues closely related to it, we may now turn our attention to the utility of individ-ual mobile financial services. In this section we present the results of our survey on the degree of utility that customers perceive in individual Mobile Banking services. In order to estimate the perceived utility, we asked sur-vey participants about their enthusiasm (or lack of it) for particular ser-vices. We further examined their willingness, quantified in monetary units, to pay for those services. For this purpose, the participants were provided with a list of 17 services bundled into three groups, namely: Mobile Ac-counting, Mobile Brokerage and Mobile Financial Information.
The enthusiasm for using a service could be rated by the participant on a scale of 1 to 6 keeping in mind the perceived utility to him or her:
1 = very much willing, 2 = willing,
3 = unsure/rather willing, 4 = unsure/rather unwilling, 5 = unwilling,
6 = not at all.
The results are presented here mostly in the form of opinion blocks in order to have a better overview.
The opinion blocks are based on the average rating86 received by a service:
Admiration: average rating better than 2;
Goodwill: average rating between 2 and 3;
Scepticism: average rating between 3 and 5; and Rejection: average rating below 5
86 The average rating of a service is calculated by summing up individual ratings given by all members of a group of participants and dividing it by the number of participants in that group.
The participants were further asked to quantify their willingness to pay for each of these services by choosing one of the payment options. The pay-ment is to be regarded as a kind of surcharge paid for availing a service via mobile devices. It is thus in addition to any charges that the bank might be collecting for providing a particular service without mobile devices.
The payment options were: “none”, “up to €0.25”, “up to €0.5” and
“above €0.5”.87 Alternatively, the participants could opt for a monthly fee.
The cumulated monthly fee for all such services that the participants chose to pay for using this option could be stated later. Paying a monthly fee for a service did not mean that the participant had then to choose this option for all other services as well.
The participant was, therefore, free to choose his ideal bundle of services for which he would be willing to pay a monthly fee and others that he might want to pay for only when used or still others that he wished to use but not pay for.
It is to be noted that the number of respondents belonging to a group of par-ticipants, who evaluated a particular service, may sometimes be lower than the total number of participants in that group. This is the case, when not all mem-bers of that group responded to the request to evaluate a particular service.
Owing to space-constraints and in order to preserve the readability of the findings not all aspects can be illuminated here in their full scope. For this reason, we present here only main highlights of our findings.
9.1.4.1 Services in Mobile Accounting
Of the eight services identified in section 6.2.1 as belonging to Mobile Ac-counting, five were put to vote. Leaving out three services (“money transfer to sub-accounts”, “changing operative accounts” and “cheque book re-quests”) was considered to be a justified trade-off to keep the questionnaire compact, as these services – to the best of our knowledge – anyway do not play a very significant role in day-to-day banking in Germany. Services put to vote were:
1. Money remittances & transfer (Mobile Remittance) 2. Standing orders for bill payments
87 It was made clear that the upper limit was not meant to exceed 1 euro.
3. Subscribing standard insurance policies (e.g. travel insurance) 4. Access administration (e.g. ordering new PIN/TAN)
5. Card management (e.g. blocking lost cards)
In the following, we present the customer response to individual services.
The 304 “Mobile Accounting Admirers” (those who had earlier named Mobile Accounting as one of their favourite applications) accounted for 67% of all participants.
Money Remittance and Transfer (Mobile Remittance)
The facility to remit money via mobile devices enjoyed high preference amongst all groups of survey participants. It reached an average rating of 2.67 (“goodwill”) amongst all participants and of 1.67 (“admiration”) amongst existing users of Mobile Banking. 65% of 55 existing users evalu-ated this service with a utility rating of 1 (“very much willing”).
A staggering 74% of all participants rated it with a rating of 3 or better, 37% of them with 1. Even more amazingly, 72% of all participants from the group of top management and self-employed rated this service with a rating of 2 or better (“admiration”). Of all participants, 17% voted with
“rejection” (rating 6), a further 9% with “scepticism” (ratings 4 and 5). The chart below illustrates the ratings given to this service by Mobile Account-ing Admirers of whom only 4% rejected mobile remittances while another 5% were sceptical.
This shows that banks should keep the preferences of Mobile Accounting Admirers in sight when determining technical and pricing issues related to this service.
The willingness to pay extra for being able to remit money via mobile devices was in the best case subdued. The chart below illustrates the will-ingness amongst some selected groups of participants. 53% of all partici-pants and 57% of all students rejected to pay for being able to remit money via mobile devices. On the other hand, 47% of existing users signalled their willingness to pay a monthly fee for the same, as against 42% existing us-ers that rejected any extra payment. Also, 35% of Mobile Accounting Ad-mirers showed their willingness to pay a monthly fee.