Online banking transactions are now nearly three times faster than interacting with a branch teller, and have become the preferred transaction method among banking customers in the US, according to research published today.

The 2006 Retail Banking Satisfaction Study from J.D. Power and Associates reveals that transaction times have the greatest impact on US customers' overall satisfaction with their banks.

Average online transactions take just 2.8 minutes to complete, compared to 7.7 minutes of combined wait and transaction time in a high street branch.

Overall, in-person branch transactions are conducted most frequently and are next highest in satisfaction, followed by ATM and online transactions.

"Banks certainly face a challenge in today's extremely competitive market in that customers crave the convenience of banking online, yet still require a personal touch," said Jeff Taylor, director of the banking practice at J.D. Power.

"While customers appreciate the convenience of banking online, those who visit the branch less often tend to demonstrate lower satisfaction levels."

The study also found that, while bank products are viewed as a commodity to many customers, products that once helped attract new customers, such as a free current account, are now widely offered and expected from customers.

Some 90 per cent of banking customers indicated that a free current account is essential, and 94 per cent of banks offer free online banking and free debit cards.

"As it becomes increasingly difficult for banks to differentiate themselves from their competitors, they constantly have to find opportunities to be innovative in attracting the attention of potential customers," said Taylor. " Online products and services represent a clear opportunity to do this."

The 2006 Retail Banking Satisfaction Study was based on responses from 12,904 households regarding their experiences with their primary banking provider. The study was conducted in October 2005.