The days of phenomenal growth in Internet access are drawing to a close. Financial services institutions now need to entice consumers who are already online. Women and the young are prime targets for eFinancial services, and cross selling is a possibility. But while the opportunities are available, there are still cost-related problems.
A new Datamonitor report highlights the potential growth opportunities for online finance.
Datamonitor’s new report, Online customer management and cross-selling in Europe and the US, has found that financial services institutions (FSIs) can no longer rely on Internet access growth to win new customers. Instead they must entice people who are already online.
Targeting females who already access the Internet could be a lucrative growth opportunity for providers, especially as the percentage of women online rises. Companies need to try and gain a better understanding of why fewer females use online FS and then target their marketing towards female Internet users.
The Internet is predominantly used for leisure purposes, so FSIs could also devise their strategy around the principle that the Internet is a source of fun. Many traditional financial service companies have established subsidiaries with this in mind, such as Egg and Smile.
Younger age groups dominate online financial services, and they represent the greatest growth opportunity in the long run for eFS. Providers can target the young by linking with sites that they already use. By appealing to them as leisure users, efforts can then be made to move them towards banking online.
However, institutions will have to reduce consumer’s fears about online banking. Ensuring there is a satisfactory procedure in place to deal with any problems will be important, making service into a key differentiator between suppliers. Providers must also make efforts to show how customers can benefit from using ‘anytime, anyplace, anywhere’ online banking.
Cross-selling would be another way to boost revenues. Consumers are open to the concept of a ‘one-stop shop’. Indeed, in the US a high proportion of people are willing to consider buying automobiles from FSIs. Consumers are also open to the idea of buying travel services from financial service providers.
However, cross-selling comes at a price. Customers’ expectations increase when they buy more than one product from a supplier, which can also push service costs up. FSIs need to ensure that these costs do not outweigh the revenue gained.