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Banks may become one-stop shops on-line 
Wednesday, February 06 2002
by Sheila McDonald


On-line banks could eventually become one-stop shops, selling cars and travel as
well as the finance and insurance to go with them, according to new research.



A new report from analyst firm Datamonitor, "Online customer management and
cross-selling in Europe and the US", outlines a future where on-line financial
institutions become strongly diversified. 

Datamonitor said its research showed one in four UK consumers would consider
buying an automobile from a financial services provider. Those numbers rise to
more than 30 percent in some parts of continental Europe, and the researchers
said consumers are also open to the idea of getting travel services from
financial service companies.



"In the future it is likely that financial services companies will become
highly diversified as they strive to provide the right product at the right time
through the most advantageous channel," the report said. "Consumers value the
idea of a 'one stop shop' and are open to the concept of buying a variety of
products from the one supplier. Financial service providers should trade-off this
knowledge and highlight to customers the overall benefits associated with
grouping their purchases."



The researchers argue that buying more than one product from a financial portal
would help encourage the customer's loyalty to the institution. But they also
warned that cross-selling comes at a price, since the financial services
companies will also have to provide better service to customers, which will drive
up costs. "It is vital that financial service institutions ensure that these
costs do not outweigh the revenue gained as a result of cross-selling," the
report said.



The opportunities for cross-selling could go much wider than cars and
automobiles, according to the research. Consumers surveyed also said they would
consider purchasing electronic products, telephone services and utilities from
financial service institutions.

 

The report also outlined the market financial service companies should target for
their services. Although most surfers who use the Internet and use financial
products tend to be male, the researchers recommend that financial services
companies turn their focus to women instead, since more female surfers are now
starting to go on-line. 



But the greatest growth opportunity lies with younger surfers, Datamonitor said,
and financial companies are advised to advertise on and forge stronger links with
Web sites that 16 to 24 year olds are already using on-line. "By appealing to
them as leisure users, efforts can then be made to move them towards carrying out
life administration tasks, such as banking on-line," the researchers said."This
could be a good way to plant the seeds for account aggregation development."