Customers expect financial services companies to have websites. People want to buy insurance and manage their bank accounts online, and companies are happy to benefit from the cost savings and expanded distribution opportunities afforded by an online presence. Most financial services companies will tell you their website is an essential component of their distribution and customer care strategy.
However, all is not well for eBusiness in financial services. Traditional companies with long established structures and operating models often struggle to adapt to a fundamentally new way of conducting their business. Management of Web presence is often bolted onto an existing structure and immediately outsourced to a mixture of external suppliers (IT development, Digital Agencies, Hosting). As a result, online presences struggle to become part of the company’s DNA through a stagnating combination of cost, rigidity and lack of differentiation. Opportunities are not taken advantage of, results fail to materialise and organizations slowly turn their focus away from what could be the best channel in their distribution mix.
Companies that understand that eBusiness is a core competency know that in order to succeed online you have to embrace the medium. Investing in in-house skills and capability is of paramount importance. Modern eBusiness is made of a very broad set of components: sales effectiveness, usability, accessibility, design and build, application development, testing, customer service, operations, IT… the list goes on. Each and every one of these capabilities requires resources and dedication and can rarely be taken outside of the core of any organisation without seriously impacting the totality of an eBusiness channel.
Financial services organisations that are serious about eBusiness need to evolve to afford their digital channels the same care and attention they dispense their traditional core capabilities: Underwriting, Product, Pricing, Finance, Operations, Sales, etc. Adapting an organisational model to embrace a whole new function is never an easy process for long established organisations. The risk and short term pain is well worth it: markets and people have already moved to the Internet and many traditional companies are being left behind. The price of not embracing digital channels seriously and decidedly is just too high.
Do you have any examples of financial institutions that have embraced eBusiness? Any experience where a digital channel has let you down? Please let me know in the comments!