e-Marketing In The Financial Services

E-marketing in the financial services sector (which is covered later) was made possible by the arrival of e-banking. E-marketing builds on the e-channel’s ability to provide detailed data about customers’ financial profiles and purchasing behaviour.

Detailed understanding of customers enables customised advertising, customised products and enrichment of the relationship with customers through such activities as cross selling. Other potential benefits of e-banking to organizations may include:

improved use of IT resources and business processes; better relationships with suppliers/ customers; quick delivery of products and services; and a reduction in data entry and customer services related errors. It is important to note that e-channels do not automatically bring these benefits, as other organizational issues also have been dealt with.

There are only a few examples reported in the literature where e-banking is realising its promised potential. One such example is the Royal Bank of Canada, where its number of online relationships was 340,000 and was growing at a rate of almost 700 new enrolments a day during year 2002-2003. Another example of realisation of the above benefits is the Woolwich Building Society in the UK, which is described in Chapter VIII.

The number of its online customer was growing so fast that it was cited as one of the main reason for its takeover by a much bigger bank, Barclays. Not only did the number of its online customer grow very quickly, but the new customer base was also very profitable. According to Woolwich’s own figures, its online customers bought four financial products each - much higher than its ‘branch banking only’ customers.

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Wednesday, February 26, 2014