Internet banking is a global revolution gathering sufficient pace to hit the banking industry as a ‘paradigm quake’.
Internet banking is a global revolution gathering sufficient pace to hit the banking industry as a ‘paradigm quake’.
According to recent research by PricewaterhouseCoopers and the Economist Intelligence Unit, no financial institution in the world has understood the magnitude of the change.
As a distribution medium, Internet banking can be used as both an information forum and to facilitate financial, sales and administrative transactions and is likely to change the way financial institutions communicate with their clients.
Banks have been keen to push consumers into this form of distribution to reduce transaction costs and to target the perceived high net worth of the connected marketplace.
Internet banking provides an even playing field for banks and credit unions alike, but its success requires an intimate knowledge of the requirements of online consumers.
While security and privacy concerns have resulted in a slower than projected take-up rate, the growth rate of Internet banking usage is increasing as these concerns are being addressed.
The most recent and enlightening research on the Australian banking market was the KPMG 1999 Internet Financial Services Survey. Key findings included:
• Banks are struggling to balance functionality, ease of use and security.
• Institutions believe that security is more a customer education than a technical issue.
• Banks are not taking any practical steps to provide this education.
• Fees and service (e-mail response times) are of concern to consumers.
In 1997 StateWest Credit Society implemented a website and, more recently, was the first WA financial institution to launch an Internet banking capability.
Within the first three months of operation, StateWest had more than five percent of its membership base register for the service.
This is significantly higher than the major banks, some of which have had an Internet banking capacity for more than eighteen months.
The success of the StateWest site can be attributed to two key issues: trust and innovation.
Recent research conducted by The Financial Research Company found that StateWest members had a comparatively high level of trust in the Society. This trust was based upon the value they received from their membership and the integrity of the Society when dealing with members.
The second reason for the high level of success was the innovation shown by StateWest when developing its Internet strategy over two years ago.
When we first established a website we had an objective to ensure that consumers had a reason to revisit our site regularly.
We held a management think tank to develop a strategy to satisfy that objective.
This led to the launch of our highly successful football tipping competition Fingertip Footy. Over the past two years StateWest has achieved more than 20,000 hits on our site each week.
Internet banking, therefore, became the natural progression.
However, consumers are understandably wary of the changes and need to be confident that their financial service provider understands and acts on these concerns.
StateWest is therefore undertaking research to identify needs and concerns members have with the new medium.
According to recent research by PricewaterhouseCoopers and the Economist Intelligence Unit, no financial institution in the world has understood the magnitude of the change.
As a distribution medium, Internet banking can be used as both an information forum and to facilitate financial, sales and administrative transactions and is likely to change the way financial institutions communicate with their clients.
Banks have been keen to push consumers into this form of distribution to reduce transaction costs and to target the perceived high net worth of the connected marketplace.
Internet banking provides an even playing field for banks and credit unions alike, but its success requires an intimate knowledge of the requirements of online consumers.
While security and privacy concerns have resulted in a slower than projected take-up rate, the growth rate of Internet banking usage is increasing as these concerns are being addressed.
The most recent and enlightening research on the Australian banking market was the KPMG 1999 Internet Financial Services Survey. Key findings included:
• Banks are struggling to balance functionality, ease of use and security.
• Institutions believe that security is more a customer education than a technical issue.
• Banks are not taking any practical steps to provide this education.
• Fees and service (e-mail response times) are of concern to consumers.
In 1997 StateWest Credit Society implemented a website and, more recently, was the first WA financial institution to launch an Internet banking capability.
Within the first three months of operation, StateWest had more than five percent of its membership base register for the service.
This is significantly higher than the major banks, some of which have had an Internet banking capacity for more than eighteen months.
The success of the StateWest site can be attributed to two key issues: trust and innovation.
Recent research conducted by The Financial Research Company found that StateWest members had a comparatively high level of trust in the Society. This trust was based upon the value they received from their membership and the integrity of the Society when dealing with members.
The second reason for the high level of success was the innovation shown by StateWest when developing its Internet strategy over two years ago.
When we first established a website we had an objective to ensure that consumers had a reason to revisit our site regularly.
We held a management think tank to develop a strategy to satisfy that objective.
This led to the launch of our highly successful football tipping competition Fingertip Footy. Over the past two years StateWest has achieved more than 20,000 hits on our site each week.
Internet banking, therefore, became the natural progression.
However, consumers are understandably wary of the changes and need to be confident that their financial service provider understands and acts on these concerns.
StateWest is therefore undertaking research to identify needs and concerns members have with the new medium.
