Net users a different breed when it comes to financial services
BERKELEY, Calif.-The attitudes of consumers who use the Internet is divided between those who do business with Web-only bank sites and those who make use of traditional bank Web sites, according to a new survey done by the Stern Marketing Group here. Nearly 40% of 207 online consumers polled that use Internet-only banks say they are a good place to buy stocks and mutual funds, yet only 19% who visit a brick and mortar bank that also has a Web site say its a good place to buy such investments. That judgment is not affected by whether or not those consumers bank through the Web or in a local branch. This is the first indication, says the Stern Group, that Web banks are solving a persistent brand image problem, namely that banks are no place to buy investment products. More than half of the respondents said they would buy their next financial product online, and 75% said they preferred to obtain all financial information in one place, including stocks, mutuals, mortgages, auto loans, insurance and financial planning. "Net banks... avoid the same old bank images we grew up with and cut high-profile deals with other Internet investment entities. Traditional banks need to follow this lead," said Charlene Stern, president of the Stern Group. The Net banks appear to be making inroads in selling themselves to investors, the survey found, and these findings should sober bankers on the Net-only or traditional choice. "The entire industry must change or resign itself to having its lunch eaten by Schwab, Merrill Lynch, E*Trade and the newest `screen-scraper' challengers," said Stern.