E-Delivery Fails to Deliver

cost savings through e-delivery continue to elude financial services firms

(Boston, MA. – February 2004) While use of electronic delivery (e-delivery) can replace billions of dollars spent on paper, printing and postage, the promise of these savings has been pursued with disappointing results since e-mail and the Internet have become commonplace. The last five years has shown that the enormous cost savings through e-delivery remain elusive and expensive to implement.

In order to quantify the financial services industry�s successes and failures in e-delivery to date, DALBAR conducted its e-Delivery Benchmarks study, which benchmarks the adoption rates and cost savings for the most common communications sent electronically to investors. DALBAR found that:

  • With significant promotion, financial services firms can expect 4-5% of customers to adopt e-delivery of the majority of customer communications.
  • Although significant returns on investment in e-delivery systems remain elusive, the majority of firms have realized some cost savings from e-delivery to date, averaging an annual savings per each converted customer of:
  • $9.00 for hard copy mutual fund quarterly statements replaced by e-delivery;
  • $6.76 for hard copy variable annuity shareholder report replaced by e-delivery;
  • $2.38 for hard copy mutual fund shareholder reports replaced by e-delivery.
  • The most effective promotional strategies for increasing adoption of e-delivery tie e-delivery to a financial incentive.

DALBAR�s e-Delivery Benchmarks Study

This study summarizes financial services firms� e-delivery practices, successes and hurdles faced. The study reports on:

  • Benchmark e-delivery adoption rates across the industry;
  • Benchmark e-delivery cost savings across the industry;
  • Successes and failures in e-delivery promotional strategies;
  • Compliance hurdles to e-delivery;
  • DALBAR�s Behavior Centric Design e-system that is geared to help firms achieve cost savings through dramatically higher adoption rates.

DALBAR�s e-Delivery Benchmarks study was conducted for mutual funds and variable annuities in November and December of 2003. The full report for each industry is available by contacting DALBAR at 617-723-6400 or at [email protected]lbar.com.

DALBAR, Inc., the nation�s leading financial-services market research firm, is committed to raising the standards of excellence in the financial-services industry. With offices in both the US and Canada, DALBAR develops standards for, and provides research, ratings, and rankings of intangible factors to the mutual fund, broker/dealer, discount brokerage, life insurance, and banking industries. They include investor behavior, customer satisfaction, service quality, communications, Internet services, and financial-professional ratings.