MANILA (04/10/2000) - Banks that do not embrace the Internet as a fundamental element of business face disintermediation with customers. Compaq Computer Co.
Philippines conveyed this cautionary note to a group of top bank executives who attended Compaq's e-Banking seminar last month.
Business development director Mark Manners of Compaq NonStop e-business Solutions division said banks are in danger of losing customers as dot-com companies are already taking advantage of value-added services made possible by the Internet, such as financial services which used to be offered only by banks.
"Portals Yahoo.com and AltaVista.com have financial solutions to every surfer hitting their sites," he said. Because of these portals' established brand names on the Internet, they could grab bank customers who frequent their sites, he said.
But traditional banks going into Internet banking can still run ahead of the competition by deploying smart electronic channels such as ATMs (automated teller machines), WAP (wireless application protocol) phones, personal digital assistants, kiosks, and PCs that can reach a wide range of customers.
The challenge, however, is whether the customers get the full range of banking services in these channels like those they get from a physical branch, as well as benefits from enhanced online services such as speed and convenience, he said.
"Your customer should get the needed information for that service on your Web site in a maximum of four clicks and within eight seconds only," Manners said.
"If your online service is slow, then it's like putting your customers in long queues which are usually found in the physical branches."
Manners added that electronic channels can also be designed to increase customer interaction. He cited a next-generation ATM solution that integrates browser technology as well as videoconferencing capabilities where a live agent appears on the ATM screen to assist a customer.
Manners also stressed that Internet banking is more than putting up a Web site and offering core banking services. Banks should also create bank portals that offer new services such as wealth management, call center solutions, electronic bill presentment and payment systems and more. Banks can also tap third party content providers for weather, sports, news, e-mall, ASP (application service providers) services and customized search engines, among others, he said.
"Internet banking is about creating a total lifestyle center, with your brand as the epicenter," said Manners.
Manners said the Internet does not respect how established or big a bank or any business is, but "rewards only the fast and innovative".
"Microsoft Encarta for instance is now bigger than Encyclopedia Britannica even though the latter was established 200 years ago," he said.