Observations from Net.Finance Conference

David Schatsky | May 03, 2005, 01:00 PM

Guest post from Asaf Buchner, who covers online financial services for us. Core research topics are in bold:
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Last week I had the opportunity to represent Jupiterresearch in net.finance 2005, a leading conference for financial institutions doing business online. The conference was very well attended attesting to the increased commitment of the industry to the online channel. For the benefit of those who could not attend or had to skip some of the sessions, I summarized my take on the key issues currently facing the industry.

1. While many banks take pride in their channel integration, by the most part, the integration is limited to using the same copy material (messaging, style, colors) across the different marketing channels. The few banks that were able to achieve a true integration offer a superior customer experience, allowing a client to start a dialog with the bank in one channel and continue it in another (e.g. start an application online and continue it from the same point off-line). In the following months, I will investigate the success of banks like Wachovia and Wells Fargo that were able to overcome technological barriers and break silos in the organization to fully integrate their marketing channels.

2. The leading financial institutions are able to leverage their knowledge of their customers to better serve them by the personalization of the content across channels and the employment of behavioral marketing. For example, a customer that calls ING Direct to inquire about a mortgage, will see mortgage banners when she logs to the website. Similarly, when an Ameritrade customer updates a new address 60 miles away from his old address, Ameritrade makes the assumption that the new address is related to a new position, thereby offering him help with his 401K. Gary Stein’s Integrated Marketing report [accessible to Jupiter clients] is helpful in that respect.

3. On the customer acquisition front, pursuant to Jupiter’s views, Financial Institutions achieve high ROI/NPV by wisely employing search and e-mail marketing strategies.

a. Search - At Royal Bank of Canada, search upheld all other channels in attracting customers to the website. Our recent research [clients] supports the viability of paid-search and emphasizes the importance of vertical search sites. In the next weeks I will publish our views on successful search engine marketing strategies in the Financial Services domain.
b. E-mail Marketing – TD Waterhouse‘s e-mail campaign was impressive in its rigorous analysis, sophisticated use of testing, and the focus on positive Net Present Value. My colleague, David Daniels, covered e-mail marketing strategies in a recent report [clients]. I intend to publish a report specifically as to how financial institutions can apply his suggestions.

4. Quite a few banks spoke about the positive impact that the redesign of their Web site had on customer retention and cross selling. I particularly appreciate National City’s site, which is both simple to navigate and use and very customer centric.

On a related note, Web analytics firms were very present at the conference marketing their services to Financial Institutions. As mentioned in Omniture’s presentation, Jupiterresearch believes that effective use of analytics is essential to a website’s success. While the vendor selection process can be daunting, Eric Peterson’s Web analytics report [clients] can be of great help in assessing the different vendors and making decisions regarding the budget and staff of the analytics team.

5. Finally, no discussion of this space will be complete without mentioning security concerns. The focus of the session that I attended was the prevention, detection of resolution of phishing attacks. This session reinforced my views that banks must be proactive in their approach and that there is no one solution but rather a suite of measures that are helpful in minimizing the effects of phishing. Our recent reports about security examine both the value of Security as a Differentiator [clients] as well as the Impact of Online Fraud on Consumer Behavior [clients].