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e-banking in the old days...

In the old days - especially in the 80s before Internet - e-banking was seen as a supplementary channel - in addition to branches and contact centres. Today it is the main channel for almost all  services - both for the customer in his private role and in employee roles of so called corporate customers. All banks have not yet adjusted their strategies accordingly.

The importance for the adjustment is accentuated by the huge success of Internet as service channel in virtually all sectors and the need for banks to be embedded in these services with e-id, e-signing of contracts, realtime e-commerce payments, e-rfps, e-offers, e-orders, e-invoicing, e-accounting, document presentment and fronting of archiving services here.

A big challenge is the fact that the user experience not only digital natives but also immigrants rapidly are gaining is coming from global players with excellent tools - like Itunes, Spotifies and Facebooks. It is far from easy to live up to all these expectations in e-bank portals on the back of decades old legacy systems. Actually it may be better to not even try - but to focus on bringing in more value instead - in the 3rd generation-connecting-customers-e-banking domain - without going for all bells and whistles in the interface.

Internet has certainly changed the scene:

- 25% (1,7 bn) of world population use it

- 4 bn have mobile phones - most soon connecting to Internet

- 100% of 16-34y segment use Internet, 97% in 35-44, 91% in 45-54, 70% in 55-64 and 33% in > 65 - usage is growing very fast here (figures from Finland - not that different elsewhere)

- 82% are using Internet for product information, 54% buy goods (clearly higher elsewhere)

So it is the main channel for everything - and should naturally be so for banks - but not only in the form of the multi-service customized and personalized bank portal - but embedded all over the e-commerce and e-government space -  where old and new banking services are needed. We have the right to demand this - as it improves services, lowers costs and saves tax payers money.

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Comments: (5)

A Finextra member
A Finextra member 01 October, 2009, 08:20Be the first to give this comment the thumbs up 0 likes

I fully agree with you, online banking services should be interconnected to any other e-commerce facility. For example payment initiated in the webshop and executed in the online banking is a good alternative to the VPOS in several countries now.

On the other hand I think online banking should live up to the expectations set up by user interfaces of iPhone, Facebook, Youtube etc. Especially the younger generation will complain if they have to use an old text-and-tables style online banking app.

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 01 October, 2009, 16:35Be the first to give this comment the thumbs up 0 likes

01/10/2009 08:20:42 József Nyíri, IND Group - Budapest added:

Thank you József,

Glad to read that you agree on using e-banking tools for "connecting-customers" in e-commerce. E-commerce-payments and e-id have been huge success stories in several countries.

I do agree that the ambition must be to adopt features from the social web as  much as possible - but as it is very difficult, if not impossible, to keep up speed with those who can start from a clean slate when banks are tied to decade old legacy systems. Thus a must to compensate by bringing in new dimensions of value from extended payments, trust services like e-id and order-in-chaos domains. Young customers will still complain - but the thing that can be done is to tell them what can be done and what cannot - at any sort of decent cost. Customers pay every cent of the costs anyway - and should be told that banks take responsibility for keeping them as low as possible in relation to the value delivered.

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 01 October, 2009, 16:51Be the first to give this comment the thumbs up 0 likes

As Internet usage is already at 100% in sub 44 groups and the habit will stick when they get older - and the > 65 are moving in with gusto now it is logical that also e-banking is moving towards 100%. 

http://boharald.blogspot.com/2009/10/internet-users-by-age-group-in-finland.html

A Finextra member
A Finextra member 06 October, 2009, 11:17Be the first to give this comment the thumbs up 0 likes

Bo,

Completely agree that all customers - retail, corporate and government - want to do everything through one channel. At the moment they're not quite agreed on which channel that is. I don't think that the channel is the same for all three and the problem for banks is the increased costs of maintaining multiple channels, particularly related to bank-specific software and security solutions.

I wrote a review of electronic banking last year (http://www.experianpayments.com/industry-hub/electronic_full-service_banking.html) which looks back at historical solutions. I think that new ways of communicating do provide an opportunity for banks' services to be more integrated into their customers (business) applications.

It would be good to realise the cost benefits you describe, it's just a question of how we get there.

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 06 October, 2009, 18:32Be the first to give this comment the thumbs up 0 likes

Thank you Jonathan,

Impressive paper - I will read it as soon as I find the time. I do agree that there will be changes. Large enterprises have quite different needs from the SME-segment where basic banking is much like it is for the consumer - with the difference that they also need to send - not only receive e-invoices. Automated accounting and cash management services should also be offered.

Bo Harald

Bo Harald

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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