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Thursday, 18th April 2024
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E-business not yet revolutionising financial institutions Back  
European financial institutions do not believe that e-business is revolutionising business today, according to a survey carried out by consultancy firm Arthur D. Little.

Over 90 per cent of European financial institutions surveyed by the consultancy believe that e-business will ‘revolutionise the sector’ or have a substantial impact within three years. But in an illustration of the timeframes within which technology strategies are now made, no respondent believed that e-business is currently revolutionising. Most believe it is having a moderate or substantial impact today.

‘Fully integrated e-business models are still some way away’, commented Gerrit Seidel, head of the financial services unit at the consultancy. ‘Most companies have introduced some elements of e-business, but only 25 per cent of the people we interviewed say they have an integrated e-business strategy for the operation as a whole’.

How financial services businesses are planning to respond to the shift from substantial impact to revolution, which will occur within 36 months, is also drawn out in the ADL survey. Survey respondents expect a growth in transaction-oriented internet business. Survey respondents judged e-shopping, information exchange and development partnerships to be the most important ‘value added’ services and predict that in three years the priority ranking will change to e-shopping, procurement and e-marketplaces, in that order.

The leading objectives for e-business strategy among the interviewees, were offering new products and services and improving customer relationship management. Acquisition of new customers and reducing costs were of lesser importance. Notably, opening up new geographic markets was the least often cited objective of an e-business strategy.

Most businesses organise their e-business as a profit centre, within each business function. Few operated as independent units or as profit centres within an internal unit.

Arthur D. Little noted that partnering was used to a limited extent by respondents. No company in the survey said it used partnering ‘very often’ or ‘always’ in its e-business strategy. Partners were used mainly for IT integration (e.g. back-end incorporation) and content, less for products and services.

The survey also illustrated that there is quite a distance to go in integration of online products and services in financial institutions surveyed. Asked to what degree were the online products and services integrated with the back-end systems and internal processes, most respondents said ‘partly’ or ‘for the most part’ but none said ‘entirely’. Much fewer said their internal processes, as compared with their back-end systems, were integrated for the most part.

Most of the focus of e-business strategies presently is on transaction models and value-chain service providers. Information exchange, building communities and development partnerships rank low in priority.

As regards marketing, nearly 80 per cent of companies said they focused on using the brand of their company operating their e-business model, rather than use an e-business brand. To publicise their e-business activities, the most-used methods were internet search engines and internet banner advertisements, although traditional media, advertising and editorial pieces were next most often used. Only 13 per cent of respondents said that they communicated their internet activities ‘very strongly’ within their companies, while three-quarters said they did so partly or strongly.

The interviewees were drawn from banks and insurers in the UK, Holland, Spain, Germany and Belgium.

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