New York, August 14, 2001
Andersen’s Business Consulting practice
(“Andersen”) has just released “Today’s eBusiness Mandate: Enhance
Profitability Across the Enterprise,” a study that evaluates the financial services
industry’s eBusiness effectiveness.
Andersen surveyed nearly 150 asset management, banking,
brokerage, insurance and lending firms between April and May 2001 to identify leading
eBusiness practices and opportunities in the financial services industry. Andersen
assessed each firm’s eBusiness capabilities in four areas: sales and marketing,
application taking, transaction processing and fulfillment, and ongoing customer service.
The survey produced five main findings:
1. Companies in nearly every financial services sector have
made dramatic leaps in their general eBusiness effectiveness since Andersen’s April
2000 study entitled “Measuring eBusiness effectiveness in the financial services
industry”. Banking and Insurance improved by approximately 15 percent each, Brokerage
by approximately 17 percent, and Lending by approximately 14 percent. Asset Management
showed marginal improvement.
In just one year, many companies in “laggard”
sectors of the financial services industry, such as Life Insurance, have built a basic
Internet presence and “first-mover” companies have moved beyond the basics by
adding a substantial depth and breadth of products and services to their Web sites. Thus,
the bar has been raised significantly in terms of how eBusiness effectiveness is now
defined in the industry.
For the 2001 study, Andersen revised its metrics
accordingly. For example, account aggregation and wireless account access are two metrics
that were not measured in the 2000 study but were included this year. Given the more
difficult grading scale, the improved scores of most financial services segments this year
are all the more impressive.
2. The combination of “bricks” (a physical
presence) and “clicks” (a Web site) provides the most effective strategy by
leveraging traditional brand names and the Internet to provide multi-channel sales and
service. Financial services consumers want a proven brand and/or local presence in
addition to the low cost, convenience, and speed of online sales and service.
Companies which have only a web-based presence lack the
necessary market breadth and most will continue to struggle. Wingspanbank.com, Compubank
and others have been merged or closed. Thus, many virtual firms have recently added
“bricks” to their “clicks.” E*Trade, for example, has aligned with an
ATM Network and CSFB Direct has opened a series of investment centers. At the same time,
many financial services companies are acquiring virtual firms to increase the depth and
breadth of their own online product offerings.
3. Now that Web sites and eBusiness are no longer
novelties, consumer expectations about Web site offerings have risen considerably. Basic
transactional capabilities may be enough to enter the eBusiness arena, but they are not
enough to sustain a firm’s long-term competitive edge. Financial services companies
must continually upgrade and enhance their Internet presence with new value-added services
and products to attract and retain customers.
In their efforts to meet the rising consumer demand for
faster, more flexible and more multi-faceted customer service, firms are scrambling to
move beyond speedy online self-service and provide online customers with greater choice
and flexibility in servicing their accounts through e-mail, call centers, online chat and
wireless devices. Insurance company Web sites, for example, now provide online claims
initiation and tracking. Opportunities for online service growth include planning and
advisory tools and personalized solutions based on major consumer goals (like college
education) and life events (such as retirement).
4. Many large financial services organizations are adopting
a one-stop-shop strategy to increase customer retention and profits. By partnering with
multiple best-of-breed firms, companies can stock their Web sites with attractive product
offerings that keep customers coming back. These partnerships allow financial services
companies to reduce the time and expense required to build or acquire new services while
at the same time strengthening their service quality, customer satisfaction, brand value
and Web site traffic.
The one-stop-shop strategy, however, is not appropriate for
all financial services firms. Progressive Insurance, for example, has succeeded on the
strength of its cutting-edge technology, depth of self-service transactions and account
access flexibility.
5. Customer demand for instant product delivery and
transaction execution remains largely unfulfilled by the majority of financial services
companies. Although their Web sites have improved in terms of attractiveness, sales
ability and customer service, processing remains a critical issue. The majority of
financial services Web sites still leverage off-line activities for at least a portion of
new account processing and fulfillment requests.
Online consumers have become accustomed to the speed and
simplicity of routinely purchasing books, electronics and other retail products during a
single Web site visit. Thus, it is not unusual for financial services customers to become
so frustrated when they encounter delays or cumbersome follow-up requirements necessitated
by archaic processing procedures hidden behind a slick front-end that they shift their
allegiance and their business to another firm.
Based on this survey’s findings, Andersen provides the following recommendations
for financial services companies:
Make eBusiness an integrated part of a multi-channel
delivery strategy. Online capabilities should complement other channels without
sacrificing speed and simplicity. As customers interact with the organization across
channels, they should be presented with a consistent customer experience.Provide the same level of service–or better–that
is offered through traditional channels by providing timely responses to online inquiries,
a choice of service options that includes both online and offline channels, and online
self-service capabilities leveraging new technologies such as wireless account access and
electronic statement delivery.Go beyond the basics to differentiate overall product
offerings. For instance, consider providing “best-of-breed” product offerings to
meet a broader range of customer needs and offering value-added services and tailored
solutions. Employ process and policy changes, workflow automation, and systems integration
to meet customer demand for instant product delivery.
About Andersen
Andersen is a global leader in professional services. It
provides integrated solutions that draw on diverse and deep competencies in consulting,
assurance, tax, corporate finance, and in some countries, legal services. Andersen employs
85,000 people in 84 countries. Andersen is frequently rated among the best places to work
by leading publications around the world. It is also consistently ranked first in client
satisfaction in independent surveys. Andersen has enjoyed uninterrupted growth since its
founding in 1913. Its 2000 revenues totaled US$8.4 billion. Andersen refers to the brand
identity adopted by member firms of the Andersen global client service network.
Learn more at www.andersen.com.
Contact:
Joni Petrus
1 267 675 6289
[email protected]
An 11 page pdf file is available at
www.Andersen.com in the Media centre, under “More Headlines” look for “August 14 Andersen
releases second annual financial services e-business effectiveness study”, and follow the link, then
under the heading “View the Study”.
