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

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

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: Manipulating Electron Spins Without Loss of Information

Physicists have developed a new technique that uses electrical voltages to control the electron spin on a chip. The newly-developed method provides protection from spin decay, meaning that the contained information can be maintained and transmitted over comparatively large distances, as has been demonstrated by a team from the University of Basel’s Department of Physics and the Swiss Nanoscience Institute. The results have been published in Physical Review X.

For several years, researchers have been trying to use the spin of an electron to store and transmit information. The spin of each electron is always coupled...

Im Focus: The proton precisely weighted

What is the mass of a proton? Scientists from Germany and Japan successfully did an important step towards the most exact knowledge of this fundamental constant. By means of precision measurements on a single proton, they could improve the precision by a factor of three and also correct the existing value.

To determine the mass of a single proton still more accurate – a group of physicists led by Klaus Blaum and Sven Sturm of the Max Planck Institute for Nuclear...

Im Focus: On the way to a biological alternative

A bacterial enzyme enables reactions that open up alternatives to key industrial chemical processes

The research team of Prof. Dr. Oliver Einsle at the University of Freiburg's Institute of Biochemistry has long been exploring the functioning of nitrogenase....

Im Focus: The 1 trillion tonne iceberg

Larsen C Ice Shelf rift finally breaks through

A one trillion tonne iceberg - one of the biggest ever recorded -- has calved away from the Larsen C Ice Shelf in Antarctica, after a rift in the ice,...

Im Focus: Laser-cooled ions contribute to better understanding of friction

Physics supports biology: Researchers from PTB have developed a model system to investigate friction phenomena with atomic precision

Friction: what you want from car brakes, otherwise rather a nuisance. In any case, it is useful to know as precisely as possible how friction phenomena arise –...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Closing the Sustainability Circle: Protection of Food with Biobased Materials

21.07.2017 | Event News

»We are bringing Additive Manufacturing to SMEs«

19.07.2017 | Event News

The technology with a feel for feelings

12.07.2017 | Event News

 
Latest News

NASA looks to solar eclipse to help understand Earth's energy system

21.07.2017 | Earth Sciences

Stanford researchers develop a new type of soft, growing robot

21.07.2017 | Power and Electrical Engineering

Vortex photons from electrons in circular motion

21.07.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>