MIS 3090:IT for Financial Services

Online Banking and Financial Portals

(Account Aggregation and CRM)

April 19, 2023

2/18April 19, 2023

“A Survey of Online E-Banking Retail Initiatives”

CACM article 2004Examines paths banks are taking to put their services online.Predicted that there will be two types of banks left: Very large ones Small niche ones that compete using portals E-banking should be the focus for gaining

competitive advantage in banking industry

3/18April 19, 2023

Survey Methodology

Studied two different segments in U.S. retail banking wrt differences in their e-banking strategy Five largest banks, and Five random community banks Broke web features into five main

areas

4/18April 19, 2023

Web features studied

InformationalAdministrativeTransactionalPortalOthers

5/18April 19, 2023

Results of survey

Smaller banks focused more on external portals while large banks focused on using internal information and servicesSmaller banks focused on local accessibilityBundling services was more important to national banks

Smaller banks could offer a unique bundling opportunity

Limited wrt wireless applicationsThree classes of banks evolving: mega, niche, and barely alive Web-wise

6/18April 19, 2023

E-Banking Opportunities

Eliminates geographical boundaries for customersProducts and services can be tailored to individual needs; i.e. mass customization (CRM)Self-service features allow customers to do more and provide greater satisfactionSmaller banks can mine their niche by showcasing local community activities and offering multi-lingual sites

7/18April 19, 2023

Portals

Enduring and profitable Customer Relationships

Financial Portal Strategy

Aggregated content from a variety of external providers

Creation of a central point on the web where consumers can handle all of their financial affairs

Types of PortalsTypes of Portals

8/18April 19, 2023

Financial PortalsFinancial Portals One-stop financial management solution General notion of online banking with the addition of

non-banking services including brokerage, insurance, bill payment, investments, etc…

1-to-1 relationships with customers leading to better understanding of customer requirements and identification of leverage opportunities

– price, convenience and value-added services– drive new business (customer retention vs. acquisition)– increase cross sales to existing customers– increase service quality (increase switching costs)– reduce service costs (reduce transaction costs)

9/18April 19, 2023

Aggregation Service

Bank A

Login &Password

from Internet

Bank B

Account info

Aggregatorlogs in

masqueradingas customer

AggregatedView of

Accounts

How Aggregation WorksHow Aggregation Works

10/18April 19, 2023

YodleeYodlee

11/18April 19, 2023

PROBLEM! Messages are scraped in HTML only This describes data appearance but not the meaning of

the data So… the aggregator must know exactly where on the

external website the account balance is situated Anytime there is a change in the layout or design of the

website, the aggregation must adjust their scraping algorithm which needless adds cost and complexity to their business model

Screen ScrapingScreen Scraping

12/18April 19, 2023

13/18April 19, 2023

Individuals Banking OnlineIndividuals Banking Online

Laudon & Traver, Ecommerce, p. 591, Table 11.1

14/18April 19, 2023

Financial Supermarket Financial Supermarket ModelModel

Laudon & Traver, Ecommerce, p. 594,

Table 11.7

15/18April 19, 2023

16/18April 19, 2023

17/18April 19, 2023

18/18April 19, 2023

Non-Financial InstitutionsNon-Financial Institutions Projected boom in online investment and banking has also

attracted non-financial institutions Financial portals provide comparison shopping services and

steer consumers to online providers for independent financial advice and financial planning

Generate revenue from advertising, referral fees, and subscription fees

Financial portals add to the online price competition Thwart the ambitions of the large banks that would like to lock

consumers into a single branded financial supermarket in which switching costs from a single, all purpose account would be considerable

19/18April 19, 2023

20/18April 19, 2023

21/18April 19, 2023

22/18April 19, 2023

23/18April 19, 2023

For Next Class…For Next Class… To do list:

− Read the Bank of Ireland case− Check out some online mortgage and borrowing sites such as

www.lendingtree.com, www.eloan.com or www.ditek.com