CU Employee Community Chair

Top KPIs for Online Banking

For most people, the phrase Key Performance Indicators rings a bell; but they’re probably not so sure how they apply in a mobile or online banking set up.

Despite web analytics not being new to banks, establishing the right KPIs for banking platforms has proven to be daunting even to web analysts. And since most banks have multi-channel solutions for its clientele, identifying the right metrics could even get harder.

Banks create websites and applications to cater for certain specific user-needs; KPIs as performance measurement tools try to evaluate the functionality of those platforms and gauge whether they are performing their intended purpose or not.

Perhaps, this is the reason why it is always advisable to create a mobile or an online banking platform after identifying the KPIs against which they will operate. If not, they can also be incorporated when optimizing any such platforms.

It is important to involve all stakeholders when identifying the KPIs for banking platforms; the stakeholders may include the team managing the mobile and online banking tools, and the conversion optimization specialist, among other key players.

There are hundreds of key performance indicators to choose from – and that is why a number of organizations find it difficult to choose the right ones.

Banks, especially, operate in a sector with numerous KPIs relating to cash flows, costs, investment, debt, customer service, and so on.

Thankfully, if you’re operating in the online banking sector, you won’t have to worry about identifying the best KPIs for your organization – in this post, we will share with you some of the best KPIs for online banking.

1. Active Clients

This KPI helps banks to evaluate the number of customers who download and use the application regularly. A careful analysis of the active users of a platform needs to be done to enable the organization to boost user-experience and ultimately, grow the number of active users of the application. The evaluation of active users can be conducted on a daily, weekly, or monthly basis – however, the more frequent the analysis, the better.

2. Applications Launch and Load Time

The time it takes users to launch an application is very critical – the process should be as seamless as possible. An application should be able to launch, load, and transact with minimal trouble. Most online users are never that patient and if the application is not fast enough, uninstallation is almost always inevitable for them.

3. Goal Abandonment Rate

This KPI directly relates to the launch and load time one; if it takes users a lot of time to access and transact on a platform, they are highly likely to abandonment that task. Measuring the rate at which tasks are completed or not can help detect a serious underlying issue with an application.

4. Task Completion Rate

This indicator helps to measure the user experience of a banking application; it helps organizations to gauge the rate at which the application solves the needs of its users. Are users achieving their intended tasks? At what rate is that happening? These are some of the questions that need to be answered and if it takes them longer to complete their tasks, there could be a problem that needs to identified and resolved; it could relate to anything from procedural issues, to user interface. Whatever it is, this KPI should help you debunk it.

5. Application Functionality

A banking application should be as versatile as possible – it should contain nearly everything that can be done over the counter or offline. By analyzing the functionality of an application, you can be able to know the services that miss on the platform, and act accordingly.

6. Net Promoter Score (NPS)

Analyzing an NPS is one of the best ways to understand the long-term growth of an organization. To determine this KPI, it is necessary to conduct surveys and get as much feedback from your customers as you possibly can. The feedback should help you know how likely they are to recommend your online banking system to others. Use the data derived from this KPI to put in place corrective measures should there be a need.

7. Retention Rate

In its simplest form, retention is a result of happy customers; and this means repeat business. Despite being a KPI that’s applicable to most sectors including banking, critics say it is geared towards benefiting the owners of a company rather than the customers. The customer retention rate can be measure using many parameters including repeat purchases and satisfaction scores.

8. New Lead Generation

The percentage of lead generation is another key performance measurement tool. Banks are better off having cross-selling and upselling opportunities that can be exploited within an application. This KPI should assist organizations to gauge how effective an in-app lead generation is.

9. Comparison of the Online and Other Platforms

This KPI helps organizations to understand the percentage of customers and the number of transactions done online as compared to other platforms such as the offline ones. If customers prefer the online platform, it would be better to offer most transactions online since offline platforms cost way more to maintain.

10. Return on Investment of the Online Platform

This is perhaps the holy grail of all KPIs. The KPI shows a comparison between the total amount of resources channelled to the platform and the returns thereafter. In this case, returns will be realized in the form of upselling and cross-selling, cost reduction due to providing some of the banking services online and therefore promoting self-service, as well as opportunity cost resulting from higher engagement with customers on an easy-to-use online platform.

Now that you’re familiar with some of the KPIs in the banking sector, let’s consider a few important things you need to understand when implementing performance measurement tools.

Why KPIs are Important to Mobile and Online banking?

The above KPIs play a far more important role than it may be portrayed by its users – some of these roles include:

  • CREATING A LEARNING CULTURE

    KPIs instill a learning atmosphere in organizations as they lead to conversations among the various levels of the organization to help improve the performance of their platforms.

  • GOAL MEASUREMENT

    These metrics help banks to know whether they are achieving their goals or not so as to undertake corrective measures if need be.

  • ENHANCING OPERATIONAL CONSISTENCY

    Individuals within organizations tend to shift their business goals and priorities all the time; however, KPIs don’t change and can act as guidance in case members depart from the objectives of certain processes.

  • IMPROVING STAFF MORALE

    If members in charge of the mobile and online banking platforms meet the set KPIs, they get motivated since they know they’ve achieved their targets. However, in the absence of these tools, it might be difficult to know whether employees are underperforming or not.

  • PROVIDING IMPORTANT FEEDBACK

    KPIs provide an insightful snapshot of the operations of the various platforms in a banking setup; information which can be used for decision-making purposes.

CONCLUSION

This document has the KPIs that we have seen credit unions and community banks use to measure the performance of their organizations. They may or may not apply as-is to your organizations and may need to be tweaked appropriately so that they are relevant to your environment and organization.

Most businesses tend to have their own unique challenges.

Take, for instance, McDonalds who found unique formula decades ago for his business which currently ranks among the best worldwide. The formula incorporated a marketing strategy that focused on emotion, experience, and value to generate profits that are above other industry players. Banks that follow this direction will be able to eliminate the irony out of their strategies and focus on the right KPIs to help them identify and eliminate unprofitable operations.

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Comments

  • CU Employee Community Chair

    Three quick thoughts to develop this topic of online banking analytics a bit further.

    1. A very common metric we see compared among credit unions is online/mobile banking penetration -- that is, the percentage of all members who've used online or mobile banking within a fixed period of time (sometimes last 30 days, sometimes last 90 days). I've actually found a more useful metric to be the percentage of members with a transaction account who use online or mobile banking. Let's face it. It's folks with transactions to monitor (in either their checking or their credit card accounts) who get the most value from habitual online and mobile banking use. Strategies that would seek to encourage pure savers or pure borrowers to be active online or mobile banking users are doubtful at best. Monitoring one's success in making online and mobile banking appealing to the transactor subset of members makes much greater sense, and aligns with initiatives that have a likelihood of moving the needle.
    2. Is there a practical reason to track mobile banking usage separate from browser-banking? It might be helpful to demonstrate that investments in mobile versus browser banking have proven worthwhile, but it's harder to justify further measurement as an indicator of member behavior. I'm one who sees both channels as having very similar efficiency value to the credit union and, truthfully, I'm agnostic whether 80% of members use online banking 80% of the time or 80% of members use mobile banking 80% of the time. That they're shifting activity from branches and the call center to either more-efficient channel is the significant issue to monitor, so lumping statistics for both together has very little downside, so far as practical insights go, as far as I'm concerned.
    3. How important is sourcing online and mobile banking data into one's data warehouse? I've found that using online transaction activity, tagged as such in our core system, is a pretty poor proxy for online banking engagement. Only 20 to 25 percent of regular online banking users do funds transfers, and as few as 10 or 15 percent use online banking for bill payments. That leaves a lot of member channel usage invisible, without the benefit of data from the online banking system documenting logon activity. Three other categories of data that, while sparse, contribute to engagement insights? Usage of scheduled transactions, savings goals, and budget tools. Of course, considering clickstream and other data, one can imagine exponentially more sophisticated data schemes arising from online and mobile banking usage -- but I'd urge folks to take the handful of access counts and feature engagement flags as a phase one data sourcing if trying for far more data means modeling and ETL programming delays.

    Are there still other considerations you'd add, when it comes to online banking analytics? Add to the discussion by clicking the "Comment" button below.

    Dale Davaz
    STCU Research & Development
    CULytics Community Chair

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