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Cyber survival

People want information now. They expect instant responses to email. The

internet is growing at an amazing rate. There are 15,000 new users every

day in the UK, which is equivalent to annual growth of 33 per cent.

The financial services business is at the centre of the revolution.

Analysts expect internet bank users to rocket from 750,000 today to nine

million by 2003 and e-commerce revenue to grow from £2bn to £25bn in the

same period.

IFAs are among those who are having to adapt to the virtual consumer.

Virtual consumers tend to be busy, time-pressed, technology-savvy,

cash-rich and time-poor. They are more highly educated than the norm, more

sophisticated with greater disposable income, and have a greater

willingness to trade money for time. They are using the internet to buy

goods and services and to develop relationships.

A number of companies are appealing to such customers through content

designed to develop a one-to-one business relationship. The killer

application is the online cheque account and statement. It brings people

back time after time. This gives the provider the opportunity to develop

the relationship and put more products forward.

The traditional dinosaurs have been slow to respond to the new set of

challenges. These include the speed and scope of change, margin compression

and cannibalisation, new competitors, speed to market, innovative thinking

and staff and resource allocation. Not only are they trying to restructure

their bricks and mortar business through change management and customer

rela- tionship marketing programmes but they also have to respond to the

internet revolution and manage their product ranges within those changes.

Retaining margins in the face of new competitors aggressively coming into

a marketplace is never easy. To date, they are not taking big business from

traditional suppliers. But what they are doing is changing the rules of the

game. Telephone banking pioneers such as First Direct have forced

traditional banks to change. But traditional banks are stuck with legacy

systems, processes and procedures and hampered by hierarchical structures.

The Financial Services Marketing Association (Fisma) was formed a few

months ago as a forum for people with a marketing responsibility within

financial services organisations to meet on a regular basis, exchange ideas

and engage interesting speakers in debate. The aim of the association is to

encourage good practice in the sector and to ensure that the voice of

marketers is heard.

At a recent Fisma event, Lloyds TSB e-marketing director Alan Gilmour

posed questions crucial to the survival of all financial services

businesses.

Firms have to decide what sort of business they need to be in if they are

to survive. It is no secret that the people who made the real money in the

Yukon Gold Rush were not the gold-diggers but the spade-sellers and

bar-owners. Who is making the internet money? Not the people selling the

goods and products. It is IBM, Cisco, Yahoo and AOL. So what role do you

want to perform? Is the value in selling, sales support, or re-engineering

processes and systems to take costs out of the business and deliver real

value?

Jack Welch, of GE, has developed the concept of DYOB.com (Destroy your own

business). He set his divisional managing directors the task of tearing

apart their existing business model and find a new business model using the

internet before their competitors. We all have to consider a DYOB approach.

We have to find a different way of locking our customers in and to develop

and deliver a better-value proposition. It may not be so easy in financial

services because of the nature and longevity of relationships. However,

does anyone want to be left with just current accounts?

How can you use the internet to bring your brand alive? The key is to get

much closer to the customer, to capture more data about the customer and to

use that data intelligently?

There is a wealth of data out there, a new set of tools which enables us

to understand customers better. Customers are often happy to keep their own

records up to date with greater accuracy and less cost. If you get it

right, you can fit into the customer&#39s preferred lifestyle and be part of

their agenda. You are helping them with their lives. You are providing a

gateway to the rest of the internet.

There are a whole host of associated questions. How do you get the

customer into your brand offer? Who are you going to target? What are the

new media marketing opportunities – banners, search-engine registration,

advertorials, keyword searches, affinity relationships? The aim should be

to use the medium to communicate with customers, not just to build brands.

There are great opportunities out there in financial services but to

exploit them fully, IFAs have to ensure that their services fit into the

cyber-customer&#39s lifestyle.

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