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Big savings ahead?

For nearly a decade now the Ernst & Young Global Financial Services survey has been an important review of the progress of financial institutions around the world and of their use of technology.

Now part of Cap Gemini Ernst & Young Consulting, this year&#39s survey has identified that, while the majority of UK insurance companies are dramatically increasing their spending on e-commerce, few are confident that they will actually achieve the dramatic economies they are seeking as a result.

There can be many reasons for this. One is the fact that few institutions offer the same level of information across all channels. Equally, there is the old chestnut of failing to incentivise customers and business partners to use new, lower-cost communication methods.

The reason that I see all too often is a lack of awareness when e-commerce services are in the planning stage. There is too little focus on understanding the way in which the end-user will work and how the planned service will help the user. Too much emphasis is placed on making things easier for the organisation delivering the service.

Over the past few years I have lost count of the number of times I have attended press briefings for the launch of a new service only to be totally underwhelmed by what is revealed. Not surprisingly, such services tend to wither away and die quite quickly – but how much have they cost?

One of the most startling statistics in the CGEYC research is that although UK companies are anticipating cost reductions through e-commerce of up to 31 per cent, in 1999 there were no actual savings. Some fairly massive advances are going to be needed if these bold targets are to be met.

We are consistently seeing predictions of major savings through the use of e-commerce. There can be no doubt that most providers see it as a lifeline, given the imposition of 1 per cent charging structures, but time is getting short for turning predictions into realities.

Indeed, a further conclusion from the research is that competition has now overtaken security as compan-ies&#39 primary concern aboute-commerce.

Certainly, we are seeing new services that can operate without the handicap of holding vast amounts of information on old systems which don&#39t lend themselves easily to the automated delivery of information to customers. But there can be no excuse for traditional players not properly understanding customer and business partner needs.

It should be a simple matter of common sense but if you don&#39t properly understand what your end-user is going to see as the value of your service, how can you ever expect it to succeed?

Having said this, gathering such views from financial advisers is not always easy. They are busy people and are inundated with people asking them if they can spare a few minutes to get involved with this or that survey.

But it is actually to the adviser&#39s advantage to get involved in the definition of requirements for such services. If you say you are too busy to identify what is needed in the design stage, don&#39t complain if the end-result is not what you would want.

Research projects should be conducted in a way that delivers sufficient short-term benefit back to the participant to justify their initial involvement. This in turn should lead to technology solutions that are more closely suited to the respondents&#39 needs.

Consequently, they will be used more, create greater economies for everyone and justify further investment in additional tools to reduce even more costs. It is a nice theory, but how do we make it work in practice?

Currently, we are faced with a classic Catch 22 situation. Advisers are too busy to help with the research design process, so the end-result fails to take into account their needs. So I am particularly pleased that IFonline has just commissioned my own organisation to carry out what we believe will be the biggest ever online research project dedicated to the needs of mortgage advisers.

Organised in association with Money Marketing online, the survey will begin by addressing what level of technology is currently being used by mortgage advisers.

More important, it will assess how the internet is already affecting business and how they feel it will change the way they work in the future. It will also seek to identify what services advisers feel will be most beneficial for them in meeting the challenge of e-commerce.

By way of an incentive, every adviser who completes the online questionnaire will be entered in a draw to win one of 10 of the latest Compaq iPaq Pocket PCs.

To participate, readers should visit www.financial-technology.net/survey/mortgage.html or click on the banner ad in the mortgage section of Money Marketing, www.moneymarketing.co.uk. The results of this research will be published early next year and I will discuss them in a future column.

With the aim of providing benefits to IFAs for participating in research, the Financial Technology Research Centre website will be carrying an increasing amount of key information for advisers about e-commerce matters. This will include who is providing what on-line services and how they can be accessed.

No charge is being made for this information, but to gain access to these password-protected areas you will be asked to complete our surveys of IFA technology plans and requirements from time to time. Already available are comparisons of which new business services are being provided by which life offices for which products and on which portals. There is also a summary of what is available from each of the different life offices&#39 extranet services.

Next year we will be publishing surveys of IFA e-commerce plans and a survey of the e-commerce plans and priorities of 200 of the biggest IFA companies in the country. If there are any particular areas where readers require further information please contact me at the email address below.

An executive summary ofthe CGEYC research can be downloaded from the website: www. capgemini.com/finan cialservices2000/executive _sum mary.html and full copies of the research can be requested from the website.

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