Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

No Competitive Edge’ from Internet Banking

02.10.2002


Research conducted by University of Ulster financial services researcher Mark Durkin into the uptake of Internet-based banking has found that banks are embracing the innovation in order not to be put at a competitive disadvantage - rather than for any sustainable competitive advantage Internet banking might provide in its own right.



The research study conducted with banks in Ireland, Sweden, the UK and the United States, found that managing customer relationships vai the internet is the greatest challenge for banks, and re-emphasised the view that a balanced delivery channel mix is what is required, rather than a wholesale migration towards Internet banking.

Banks throughout Europe had anticipated significant cost savings through such a migration , but costs have actually risen - because customers choose to adopt all available delivery platforms rather than choosing the Internet over others.


"While the growth of Internet banking is clearly increasing, there will always be a role for the traditional bank branch. The challenge is to manage the total delivery mix, and offer alternative service packages for different customer segments. Such an offer will likely be made on the basis of customer profitability", said Mr Durkin.

Senior bank executives across Europe and America were in agreement that new technological interfaces such as interactive television and mobile phone commerce, made access to Internet banking more possible - but they remained unsure about customers` actual preferences.

Mr Durklin’s research proposes that the extent to which the Internet is embraced by bank customers through whatever interface will be a function of customer confidence and product complexity.

Early indications from ongoing research conducted with bank customers in Northern Ireland shows that it is younger customers who will adopt the Internet most readily for their banking. As age and the complexity of financial needs increase, there is a decline in the adoption levels of Internet banking and an increase in the need for face to face interaction. Customers feel that the branch will remain as the most important interface in the foreseeable future.

Mr Durkin said: "Irish banks are behind in customer adoption of Internet Banking compared to other parts of Europe and the United States but in many ways that is no bad thing as we can learn from the mistakes of others. That said, banks here must be aware of the need for the value proposition offered online to be perceived as important by prospective customers and this requires customer education."

The extensive and community based branch networks offered by branches here make an ideal platform for such education to take place. Recent research in the USA found that a key reason for Internet bank customers opting out of the service was that it did not offer any real value, so offering value and educating customers as to what such benefits are is crucial.

Mark, a former chair of the Chartered Institute of Marketing (CIM) in Northern Ireland, said:

"It is important that banks take a more global perspective in learning what is feasible in the area of Internet banking and apply the lessons to their own circumstances. Internet banking is not a panacea."

David Young | alfa
Further information:
http://www.ulst.ac.uk

More articles from Business and Finance:

nachricht Corporate coworking as a driver of innovation
22.11.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: New proton record: Researchers measure magnetic moment with greatest possible precision

High-precision measurement of the g-factor eleven times more precise than before / Results indicate a strong similarity between protons and antiprotons

The magnetic moment of an individual proton is inconceivably small, but can still be quantified. The basis for undertaking this measurement was laid over ten...

Im Focus: Frictional Heat Powers Hydrothermal Activity on Enceladus

Computer simulation shows how the icy moon heats water in a porous rock core

Heat from the friction of rocks caused by tidal forces could be the “engine” for the hydrothermal activity on Saturn's moon Enceladus. This presupposes that...

Im Focus: Nanoparticles help with malaria diagnosis – new rapid test in development

The WHO reports an estimated 429,000 malaria deaths each year. The disease mostly affects tropical and subtropical regions and in particular the African continent. The Fraunhofer Institute for Silicate Research ISC teamed up with the Fraunhofer Institute for Molecular Biology and Applied Ecology IME and the Institute of Tropical Medicine at the University of Tübingen for a new test method to detect malaria parasites in blood. The idea of the research project “NanoFRET” is to develop a highly sensitive and reliable rapid diagnostic test so that patient treatment can begin as early as possible.

Malaria is caused by parasites transmitted by mosquito bite. The most dangerous form of malaria is malaria tropica. Left untreated, it is fatal in most cases....

Im Focus: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

IceCube experiment finds Earth can block high-energy particles from nuclear reactions

24.11.2017 | Physics and Astronomy

A 'half-hearted' solution to one-sided heart failure

24.11.2017 | Health and Medicine

Heidelberg Researchers Study Unique Underwater Stalactites

24.11.2017 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>