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 Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

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: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

Im Focus: Three Magnetic States for Each Hole

Nanometer-scale magnetic perforated grids could create new possibilities for computing. Together with international colleagues, scientists from the Helmholtz Zentrum Dresden-Rossendorf (HZDR) have shown how a cobalt grid can be reliably programmed at room temperature. In addition they discovered that for every hole ("antidot") three magnetic states can be configured. The results have been published in the journal "Scientific Reports".

Physicist Dr. Rantej Bali from the HZDR, together with scientists from Singapore and Australia, designed a special grid structure in a thin layer of cobalt in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

From rocks in Colorado, evidence of a 'chaotic solar system'

23.02.2017 | Physics and Astronomy

'Quartz' crystals at the Earth's core power its magnetic field

23.02.2017 | Earth Sciences

Antimicrobial substances identified in Komodo dragon blood

23.02.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>