E-banking comes to town: Exploring how traditional UK high street banks are meeting the challenge of technology and virtual relationships

UK high street banks are continuing to extend the choice of channel through which customers can manage their moneycolon; an obvious example is e-banking. They have been keen to exploit technological advances and changing customer attitudes to alternative channels. Additionally, competition from leaner new market entrants has provided an added incentive to adopt new approaches. In the light of such developments, it is worth reflecting on the changing nature of the bank–customer relationship. This paper suggests that banks are finding it difficult to manage relationships effectively due, in large measure, to the sheer volume of customer data generated by new interactive, technology-based channels. Paradoxically, it seems that the more data banks have about customers the less likely they are to know them on a personal level. It is further suggested that channels such as e-banking potentially reduce the level of personal contact between bank and customer to the extent that a ‘virtual’ relationship develops. This paper concludes that, given the tendency towards ‘virtualisation’, it is inconceivable that bank–customer relationships will become any more intimate in the future. Indeed, a greater degree of personalisation in customer communication may be the very best that banks are able to offer.     

Customers’ dissatisfaction with banking channels and their intention to leave banks: The moderating effect of trust and trusting beliefs

Banks have the challenging task of managing customer experience across many traditional and technological channels in today’s financial services world. Recent studies and anecdotal evidence suggest that many customers are dissatisfied with their experiences across channels that are supposed to provide a seamless experience. This customer dissatisfaction potentially diminishes a financial service organization’s customer base, and requires the firm to rely on a more fickle customer mix and erodes its reputation. This paper investigates the relationship between individuals’ dissatisfaction with their primary bank channel and their intention to leave their bank in the future. The first study examines individuals’ overall trust in their bank as a potential moderator in the relationship that reduces customers’ likelihood to leave the bank even though they are dissatisfied with a particular banking channel. The second study goes one step further and examines the effect of three trusting beliefs about the bank potentially held by the customer: competence, integrity, and benevolence beliefs. Findings indicate that when customers have a high level of trust in their banks, they are less likely to leave their banks even though they are dissatisfied with their primary banking channel. Furthermore, while competence and benevolence beliefs about the bank have a similar moderating effect, integrity beliefs do not.     

Strategic integration of customers and channels

The challenge for financial services organisations is to understand the impact that new channels will have on their existing branch network and customer base both now and in the future. This paper offers a practical approach to understanding the steps involved and introduces two new market-specific tools designed to aid financial services organisations in quantifying this demand. The paper concludes by looking at trends in channel management and channel integration with specific reference to the US asset management marketplace.     

银行承担社会责任对其竞争力的影响研究——基于银行服务的“质”与“量”中介视角

本文基于2010-2018年中国16家上市银行面板数据,探讨银行承担社会责任对其竞争力的影响。研究发现,大型银行和中小型银行承担社会责任均能提高自身竞争力,并且正效应存在一定的持续性;大型银行承担社会责任对银行竞争力的正效应更强;银行承担社会责任能够通过金融创新和信贷供给两条渠道,改善银行服务的"质"与"量",最终促进竞争力提升。     

Reflections on bank–customer interactions in the new millennium

Having relatively recently embraced the concept of marketing, banks approach the new millennium operating in an increasingly competitive and fragmented marketplace with financially literate consumers. This competition combined with the prevailing low interest rate environment means that traditional banks with extensive branch networks are having their profitability margins squeezed. New technology presents opportunities for banks to become both more efficient (in terms of cost reduction) and more effective (in terms of customer profiling and informed targeted selling). As many groups of customers become more content with interacting with their bank through remote technological channels (eg phone, Internet) the implications for bank–customer relationships are important. Recent research shows that new ‘electronic banking’ channels, while being keenly embraced throughout the industry, are being pursued more for their cost-based advantages than for their business development or relationship management capabilities. Given that the key power of the Internet arguably rests in its interactive capabilities, and that relationships are predicated upon interactively, it seems appropriate to conclude with some key issues for future electronic banking strategy with particular emphasis on staff–customer relationships.     

我国商业银行代发工资业务创新发展策略研究

代发工资业务是各家银行竞相发展的一项重要的个人中间业务,是撬动整个零售业务最重要的支撑点之一,大力促进其发展具有非常重要的意义。本文认为我国商业银行需要创新代发工资业务处理方式,增加交易渠道,培育客户自助水平,营造新的金融消费环境,为客户提供高品质服务,解决排队等问题;通过把握营销机遇,挖掘客户需求,做好组合营销,不断满足代发工资客户日益增长的金融需求;通过产品创新,经营代发工资业务品牌,加强风险管理,打造独特的竞争优势;通过公私联动、整合营销,提高营销效率,扎实推进薪酬市场客户拓展工作,提升商业银行的核心竞争力。     

商业银行交叉销售的现状分析与策略建议

新世纪以来,银行、保险、投资等多领域金融产品的交叉销售成为各家金融机构获取客户、服务、扩张和盈利的重要工具。文章分析了当前商业银行交叉销售的现状,指出国内银行业已取得基本确立交叉销售的经营理念和经营模式、初步建立CRM系统为交叉销售提供技术支持等成效,但仍存在市场定位不明、销售手段单一、产品缺少重点等不足。文章从客户策略、产品策略、渠道策略、服务策略、队伍策略、激励策略等方面就推进我国商业银行交叉销售提出建议。     

What types of banks profit most from fees charged? A cross-country examination of bank-specific and country-level determinants

The perception that banks are exploiting customers through their fee-charging practices in a bid to maximize profits, has fuelled widespread public interest in identifying the banks that profit most heavily from fees. Using hierarchical cross-country regression analyses, this paper seeks to answer the question – what types of banks profit most from fees charged? It also highlights the country level factors that influence banks’ ability to profit from fees charged. The factors at the country level distinguish between those that relate specifically to the financial services industry and broader macroeconomic indicators. The paper also identifies three channels through which national culture impacts banks’ ability to make high profits from fees. This paper uses the most comprehensive set of explanatory variables in studies of this nature. It has also extended the spatial scope of previous studies on bank fees by including data on banks from 46 developed and developing countries. In light of swelling public pressure on governments to do ‘something’ about bank fees, ill-advised measures are highlighted.     

Community bank structure an x-efficiency approach

Community banks have historically been important sources of intermediary services. Changes in regulation and intermediation technologies have affected the efficiency with which these firms can perform these services. Relatively small community banks, those with assets of $1 billion or less, have experienced particular changes in their ability to generate loan products as efficiently as their larger counterparts. Using FFIEC data for all banks of $10 billion or less, we measure the x-efficiency of all community banks and compare the results of small and all other community banks since 2010. We test for the importance of internal and external determinants of efficiency. We observe that declines in product provision are related to specific determinants of declining x-efficiency in small community banks. The results indicate limited assets or customer growth rates experienced by small community banks, coupled with a declining population in community bank trade areas, do not support improvements in x-efficiency through expanded intermediation activity. Small asset community bank managers will need to strategically deploy products that allow the customer relationship to be enhanced and sustained, using customer affiliations that cannot be easily adopted by larger competitors.     

Winning the worksite customer

As the UK financial services industry advances channel strategies in response to developments in regulation, technology and government policy, a number of systems are evolving. One such system is worksite distribution. The environment is set to facilitate the development of this channel and a good deal of activity is under way. Key environmental drivers include the legal obligation on UK employers regarding stakeholder pensions provision; the continuing erosion in state benefits and the recognition that individuals will almost certainly have to provide for themselves in retirement; and the culmination of IT infrastructure development. Along with a tight labour market and reduced access to financial advice for the ‘mass market’ as advisers turn their focus to high-net-worth individuals, the role of the employer and the workplace as a source of information and purchase power begins to make sense — in essence, the role of a ‘portal’. This paper takes a close look at the customer potential of worksite marketing — both employers and employees — and the technology challenge faced by providers in winning their business.Worksite distribution (also known as worksite marketing) is the latest distribution channel emerging in UK financial services. There has been much discussion over the last two years on the viability of this channel in the UK. These discussions initially focused on comparing the drivers in the UK to the different drivers behind the development of the channel in the USA. More recently, discussions have focused on UK activity and the scramble to secure (pre-register) stakeholder pension (SHP) clients. This flourish of provider activity may well account for the channel becoming a self-fulfilling prophecy, with many employers already being presented with a SHP or worksite proposition. ‘Best practice’ in this channel will be dependent on providing the best process for target customers — some lessons are learned from experience in other established markets and, importantly, from realising the inherent differences between the UK and these markets. This paper takes a deeper look at the subject and explores the worksite customer — who they are, how to win their business, and the enabling technology that will determine the outcome for financial service providers embarking on this channel.     

Customer account relationships and e-retail banking usage<Superscript>1</Superscript>

Financial institutions are actively developing new electronic banking products for their retail customers. To date, the market leaders have drawn a disproportionably higher share of e-retail banking customers. In response, smaller institutions have become quite active in exploring ways to participate profitably in online banking. A major influence is from a customer relationship management (CRM) perspective, where institutions try to limit the outflow of current customers and direct high-value customers to potential products from a multi-product service offering array. These efforts can succeed only if retail bank marketers focus the promotion of the new products and services that can utilise this channel toward those customers who are most likely to find them attractive. The first aim of this study was to examine the role that online and electronic banking play in defining the customer's primary financial relationship. The analysis of 701 retail customers of a financial institution presented in this study suggests that banks and other institutions are highly vulnerable to loss of customers to rivals with extensive online services. A second aim was to examine to what extent information on banking relationships is able to extend CRM analysis beyond that offered by typical demographic and income data. Current customer account relationships are found to be highly predictive of use of electronic services use in general. And, interest in the use of specific online services is related to differing customer relationships in addition to ordinary demographic and balance information. These findings can be useful for retail banking in identifying potential high-value users from a customer relationship management perspective.     

鼠标＋键盘：银行新的利润源——中国工商银行2008年第三期创新沙龙在北京召开

银行卡是商业银行重要的业务平台,电子银行则是银行新的利润来源。在银行卡与电子银行领域,中国工商银行一直走在国内前列,但同业追赶的步伐也从未停息,在日益激烈的竞争形势下,工商银行如何保持并扩大自身的优势？2008年第三期创新沙龙对此进行了热烈的讨论。     

Promotional messages in multichannel banking: Attractive or annoying?

Financial service providers possess a great deal of information about their customers. Customer information is used to serve customers and deliver the right messages to the right customer groups. Owing to the nature of financial services – that is, the need for credibility, long-term commitment and involvement of sensitive personal information – the planning and implementation of suitable marketing is extremely important. Financial services are offered through multiple channels, but electronic channels have increased in importance both for customer acquisition and retention purposes. In addition, electronic channels offer personalization possibilities that did not exist before. In this study, we examine, with the help of electronic focus group interviews, the kind of channels customers prefer when promotional messages include different types of personalization. In addition, the acceptance of promotional messages in the online banking context is explored. The results indicate that the channel preferences of customers diverge depending on the type of personalization used in the message. Furthermore, based on the opinions of customers concerning several authentic online banners, a personalization matrix was developed. The findings show that preference-matching personalization with informative content is accepted by the majority of customers. The article offers financial managers new perspectives on bank marketing in general, and online bank marketing in particular.     

Balancing the regulation and taxation of banking

This study gives an overview of bank taxation as an alternative to prudential regulations or non-revenue taxation. We review existing bank taxation with a view to eliminating distortions in the tax system, which have incentivized banks to engage in risky activities in the past. We furthermore analyze taxation of financial instruments trading and taxation of banking products and services and their ability to finance resolution mechanisms for banks and to ensure their stability. In this respect, we put forward the following arguments: (1) that a financial transaction tax is economically inefficient and potentially costly for the economy and may not protect taxpayers; (2) that a bank levy used to finance deposit guarantee and bank resolution mechanisms is potentially useful for financial stability, but that it poses the threat of double taxation, together with the proposed Basel-III Liquidity Coverage Ratio; and (3) that we support the elimination of exemption from value added tax (VAT) for financial services in order to provide banks with a level playing field, while retaining exemption for basic payments services. This is expected to improve efficiency by reducing the wasteful use of financial services.     

Earnings expectations and the quality of financial services

Using complaint data filed by consumers with the Consumer Financial Protection Bureau against financial institutions, we show that banks receive, on average, 13.3% more customer complaints in the quarter immediately after they narrowly beat analysts’ earnings forecasts. The effect is mainly driven by banks’ attempts to reduce their non-interest expenses to beat earnings benchmarks. The relationship is stronger when bank CEOs receive a greater proportion of incentive-based compensation. Overall, our paper demonstrates how capital market incentives exacerbate shareholder–customer conflicts.     

What happened to profitability? Shocks,challenges and perspectives for euro area banks

This paper analyses the evolution of bank profitability from 2005 to 2016, with a focus on the period covering both the global financial crisis and the euro area crisis. To accomplish this, we constructed a dataset that includes financial statement information from 310 euro area banks. Using a dual approach – a ‘bottom-up’ approach as applied by bank analysts and macroeconomists' ‘top-down’ approach, we find that the profitability of euro area banks was hit by two shocks of different nature. The Lehman Brothers collapse affected mostly big banks with diversified portfolios via losses in their securities investment. The subsequent euro area debt crisis and economic recession hit more traditional banks specialising in retail lending activities, mainly through increasing impairment costs. If the first shock had a one-off impact on bank profitability, the second shock is far more long-lasting and is still depressing the profitability of banks in peripheral Europe.     

Bank image in the UAE: Comparing Islamic and conventional banks

This study investigates how bank customers in the UAE view Islamic banks versus conventional banks and whether this image affects customer loyalties or selection of a bank. We distributed a questionnaire to a convenient sample of UAE bank customers that focused on five areas: bank image, bank products, service quality, cultural aspects and religious factors, in addition to demographic attributes of the sample. The main findings of this study are: first, most UAE bank customers prefer banking with Islamic banks, although they are not satisfied with the quality of products and services; second, customers generally have a positive image of whatever bank they dealt with; third, the regression analysis results indicate that the most important factor in choosing a bank was bank products followed by service quality and then religious factors; fourth, there is a significant difference between how customers perceive UAE Islamic banks versus conventional banks; fifth, there is a significant difference in how customers perceive UAE Islamic banks based on their gender, education and duration of the relationship; and finally, there is a significant difference in how customers perceive UAE conventional banks based on their gender.     

储户预期与金融稳定

本文利用中国88家银行的面板数据及中国人民银行的储户问卷调查数据,研究储户对未来经济和收入感知的预期对金融稳定性的影响。研究发现,通过储户资产配置、货币政策预期与银行风险承担三个渠道储户预期水平上升有助于提高金融稳定性;机构储户对金融稳定性的边际影响高于居民储户;城市储户的预防动机需求会降低金融稳定性;从系统重要性银行角度看,储户预期对非系统重要性银行的影响更大,储户对房价信息与股市波动等信息的适应性学习会降低储户预期对金融稳定性的影响。     

我国商业银行客户服务渠道的整合策略

目前,我国商业银行服务渠道种类与发达国家已基本相同,但各种服务渠道之间缺乏互联互通和相互支持,使得多渠道发展反而成为业务发展和创新的障碍,据此,作者提出解决这一问题的根本途径就是进行“渠道整合”。我国商业银行进行渠道整合应达到的目标是通过“渠道最优化”实现银行和客户的双赢。为达到这一目标,作者还建设性地给出了进行渠道整合的策略,包括在技术层面上建立一个统一的客户服务平台,以及要重点解决渠道、业务与客户的对应和配合渠道整合的组织结构变革等问题。