World Telecommunication Day 1999 |
Internet experts talk about ''Web years,'' which are sort of the opposite of ''dog years.'' While a dog year is said to be equal to several human years, a Web year is said to be equal to three months in human time. The market development of on-line banking is proceeding at the hyperspeed pace of Web time.
More than 700 banks in Europe have added transactional capacity to their Web sites in the past six months, according to Paris-based BlueSky International Marketing. Added to the existing 450 sites where customers do things like pay bills, transfer funds and check account balances, this makes more than 1,200 European banks with advanced interactivity.
Being able to pay the phone bill on a bank's Web site is perhaps something Europeans - especially those in Switzerland, Germany, Scandinavia and Britain - are taking for granted. Not being able to offer transaction-based services puts a bank at a serious disadvantage, say researchers at BlueSky, which recently studied nearly 2,000 European on-line banks.
Account interactivity is not enough, however, says Suzan Nolan, president of BlueSky. ''The bar has been raised.'' she says. ''Banks have to work harder to find competitive advantage and use Internet technologies to enhance their marketing and customer-service strategies.''
The growth in on-line banking, especially the boom taking place in Germany, is attributed to smaller and regional banks getting on line to remain competitive. Says Ms. Nolan: ''We are seeing a highly local use of the global Internet.''
What that means is that the savings and loans, particularly in Germany, are concentrating on their traditional customer base locally at the city or village level, and using the Internet as an electronic branch rather than as a medium to develop a global or even national market for new customers.
With so many banks developing Internet branches, a strong brand or corporate identity is essential. ''The Internet is a big blue sea, and only a few towers really stand up out of the depths above the rest,'' says Michael Bornhausser, chief operating officer of Pixelpark MMK AG, a Basel-based Internet consulting company.
Mr. Bornhausser says that it is especially crucial for traditional brick-and-mortar banks to establish their brands against the new, direct banks - like Egg in Britain or NetBank in the United States - that do not have a physical infrastructure and may not even be from the banking sector.
IBM Corp. is also stressing the importance of branding and corporate identity.
IBM and Interbrand, a London-based branding consultancy, recently completed research studying the top banking brands against a benchmark series of 100 criteria for on-line banking excellence defined by IBM. The top-scoring banks have clear, well-structured Web sites that create a strong, consistent ''brand experience,'' according to the researchers.
''IBM's research does not suggest that larger banks have advantages, rather it is those who can differentiate themselves, which could very well be a smaller bank or even a non-bank,'' says Keith Gold, marketing manager for IBM's Europe, Middle East and Africa finance unit.
Since announcing the results of the research, the computing company has been meeting with finance-sector managers at ''the board level'' and not the information technology management level.
''It's a marketing issue,'' says Mr. Gold, ''not so much a technology-only issue anymore.''
To give an indication of how fast this market is moving, UBS AG in Switzerland, a country of about 6 million people, is signing up 2,000 new on-line customers a week.
Marcel Ospel, chief executive officer of UBS, said at a corporate presentation in August that the bank's share of the telebanking market (which includes on-line and phone banking) is greater than its share of the overall Swiss banking market.
Valerie Thompson
Top 10 Bank Brands on the Web
1 Citibank (United States)
2 ForeningsSparbanken (Sweden)
3 Meritanordbanken (Finland/Sweden)
4 SEB (Sweden)
5 UBS (Switzerland)
6 Wells Fargo (United States)
7 Net Bank (United States)
8 Egg (Britain)
9 Credit Suisse Group (Switzerland)
10 Commerzbank (Germany)
Source: IBM/Interbrand
study