Marketing Financial Services
The 21st century has brought new contemporary outlook, which is especially vividly seen in business. Entrepreneurs nowadays establish new relations with customers and partners using updated innovative methods and technologies. One of such methods, which is becoming more and more popular, is internet connection that opens wider opportunities for businessmen worldwide. Since recently, a lot of entrepreneurs in different spheres use internet to make their businesses more effective, more responsive and thus more convenient for their customers. Financial services are not exception. Moreover, it is in this field where internet technologies gained especial popularity. It is particularly true for banking, since more and more banks offer excellent opportunities for their customers to make transfers and use banking services directly from their home or offices. Yet, internet banking is also exposed to serious threats, since customers are getting more concerned about security and convenience of on-line banking services. Therefore, internet banking might lose its attractiveness to customers if necessary changes in response to customer needs are not made appropriately.
According to research held among UK banking customers, the latter are getting more concerned about the quality and security of internet banking services. There were distinguished five key elements attributed to internet banking services quality:
Responsiveness of service delivery;
Credibility of the internet banking provider;
Security of the banks website;
Ease of use the bank’s website;
Product variety/diverse features.
The research showed that the majority of respondents named security of bank’s website as the issue of primary concern. Yet, responsiveness of service delivery and ease of use of the bank’s web-site mattered much as well.
In order to check the existing internet banking services using the key five elements stated above as the criteria the Egg bank was chosen. The latter is one of the world’s largest on line banks. Egg provides the following services in three major areas – banking, investing, and insuring:
· Interest on deposits;
· Egg Card. Currently, 0% interest on purchases until 1 May 2007 and 0% on balance transfers until 1 May 2007 (2.5% handling fee).
· Egg Savings Account.
· Egg Loan. Customers can get loans from the bank at a certain given rate.
· Egg Mortgage – a discounted tracker rate that’s guaranteed to be 0.99% above the Bank of England Base Rate after the discount period.
· Egg Money Manager. It enables customers to see their online accounts in one place, even if they’re not with Egg. (Egg’s official web)
Thus, we can see that Egg internet bank provides all the standard services that traditional bank. It is important to notice that purely internet banks cannot use their online services as the feature of their differentiation, since they do not offer any other alternative for their customers. That is why, it is the matter of crucial importance for such banks to improve and maintain high quality standards of customer service in order to stay competitive on the market. With regard to internet banking activities, Hollander (2001) identifies the following key business requirements important to satify customer needs and combat competitors:
Ø Customization to meet bank’s unique needs and strategic vision;
Ø Reliable customer self-service;
Ø Real-time advisor involvement;
Ø Detailed, personalized advice;
Ø Cultural adaptation, which is relevant to global financial institutions with target audience worldwide.
To develop the issue further, it is necessary to mention that customization is extremely important to support and maintain customer’s loyalty, which is the priority of any business especially in current highly competitive market environment. In financial services field loyalty plays crucial role, because it is much easier and more cost effective to retain existing customer than attract a new one. Reliability of customer self-service influences the customer’s willingness and desire to use banking services. As it was already mentioned, security matters most for internet banking users. Therefore, in order to fully satisfy customers’ needs, it is important for a bank to ensure proper self-service security. Real-time advisor involvement is a smart tool used nowadays by many bank to increase the quality of service provided. This internet tool helps customers to make appropriate calculations and ease the process of making a proper decision. Thus, the implementation of real time advisor increases the level of internet banking competitiveness. Detailed personalized advice enhances the former competitive advantage even further as it enables the customer not only to make important decisions by himself, but also to save money and time using consulting services. Finally, cultural adaptation is a must when we talk about global firms such as Egg bank. Cultural adaptation provides relevant and convenient services for customers worldwide.
Thus, having outlined the key elements of internet banking service quality, as well as necessary requirements to improve customer satisfaction, it is useful to analyze the internet banking services provided by Egg. First of all, whether security is involved, it is possible to say that Egg ensures adequate security procedures so that customer may not worry about the transactions. The main attributes of customer’s security are:
Personal log in (first name, last name, date of birth and post code);
Personal information (mother’s maiden name) in case of log in difficulty.
These features ensure the protection of customers’ personal information and prevent from non-sanctioned transactions on behalf of other users. As we can see, it is quite hard for another person to log in to the system since there exist 6 main elements he/she has to know. Moreover, the site also provides useful tips how to increase the level of protection:
Don’t use fraudulent links from e-mails that attempt to get secured information from personal account;
never use quick log ins from alien computers (computers that you use outside your home or office);
Always properly log out.
Another important feature of the overall banking services quality is responsiveness of banking service delivery. It is quite hard to evaluate this feature using Egg services, since I am not the customer of the bank. Yet, it is still possible to make certain assumptions with regard to Egg’s customer complaints and propositions handling, i.e. some type of bank’s CRM. Interestingly, that there exist four major instruments of customer feedback opportunities:
Online help area.
Moreover, Egg has toll free phone number that can be used by its customers in case of emergency or in order to express their concern or complain. There is also a separate phone number for those who became the victims of fraud or suspicious e-mails. Thus, the variety of contacting instruments gives customers a chance for guarantee of timely delivery of services providing by the bank.
The third criterion, by which customers evaluate the quality of services provided by the internet bank is the ease of use of bank’s web-site. Concerning Egg, this element is also quite adequately thought off. The site consistently guides the user among all the services and offers that Egg provides for its customers. Compared, for example, to Egg’s direct competitor Smile, Egg’s web-site procedures are more clear-cut and obvious. The interface of the site is not overloaded with unnecessary information and details, which are not of primary importance for the user. Entering the web-page for the first time, the user clearly sees opportunities that Egg has to offer – banking, investment opportunities or insurance. Thus, by an easy click a person is able to get to know everything he/she is interested in with regard to certain type of those three main service fields. Moreover, each service field has its own color:
Ø Banking – green;
Ø Investment – blue;
Ø Insurance – pink.
Thus, it helps users to easily orient what section they are navigating. As for regular customers, the first thing they do is register to enter their account. The log in option is also very obvious, as it is situated in the top right corner of the page, which is hard to miss. Furthermore, the easiness of the Egg’s site use is also provided by the fact that the site has comprehensive pictures to support the major important options of the navigation system. For example, if the customer wants to find an address to write directly to the bank, he sees a large sign of notebook with a pen. By clicking on the picture, he is provided with the appropriate address to forward the letter to. In such a way, it is possible to evaluate the easiness of Egg’s web-site use as high.
The fourth component of internet banking services quality is credibility of internet banking provider. This element is tightly connected with the background of Egg bank, since the latter is the best proof of bank’s reliability and trust worthiness. It was already mentioned that Egg is one of the world largest purely internet banks. It was established in 1998 and has successfully led its business operations convincing customers that internet security can be easily enhanced. The only thing is to get rid of personal carelessness. Egg’s specialization is internet banking. Therefore, it allows the organization to fully concentrate its efforts on delivering quality services to its customers – internet banking users. In marketing, this is known as niching and focusing. Egg concentrates its efforts on the chosen niche and offers services for chosen target audience – people that prefer convenience and quickness, who value their time and are eager to try something new. That is why, due to known specialization of the bank, Egg has established creditability as the leading internet banking services provider.
Finally, the last criterion, by which customers evaluate the quality of internet banking services, is the variety of products offered on the web. It is fair to say that with regard to this issue internet baking loses its competitive positions to traditional banks, as the range of services provided online are limited. For instance, Egg offers traditional services, such as credit cards, savings account, mortgage, deposits, and insurance. This range can satisfy the regular needs of common people. However, it is important to consider that internet banking users are not common customers. This is the segment of active people, who favor innovation and are not afraid of challenges. As it was already mentioned above, they value their time. It means that in order to retain those customers, it is not enough to just enhance security. It is also important to launch new services that would meet increasing demand of those mobile and active people.
In such a way, it is possible to say that four out of five main criteria of internet banking services evaluation of Egg bank meet the highest standard. The fifth one, which is the diversity of products offered, can and should be gradually improved. However, with regard to the latter issue, it is also fair to mention that new dynamic environment creates new demands. Therefore, in order to remain competitive the internet banking has to be flexible adapting to the most incredible needs of the customers. Furthermore, it is necessary to keep in mind that not only customization of services but also customization of demand matters as well. It means that different clusters of customers value different features of internet banking. For some security is the priority. For others – ease of use means more. Thus, the task for internet banking providers becomes even harder, since they have to keep all the features at the best level possible.
To conclude, it is important to mention that internet banking becomes not simply a means of service differentiation. It has separated into the whole new sphere of banking service. Egg bank, which is one of the largest pure internet banking, is the best proof of that. Yet, the popularity and loyalty of customers to internet banking depends on different features — from security to the diversity of products offered. That is why, in order to stay competitive and retain its customers, internet banking providers have to offer excellent benefits to its customers:
Increase their value;
Enable mutual collaboration;
Provide to new customer segments;
Ensure objectivity and consistency. (Young, 2005)
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