Top trends in retail online banking

Posted by Mark Brousseau

Bank customers have started to demand that their banks’ online offerings keep up with the times, according to new research from Celent, LLC. And for good reason: the online banking space has stagnated for far too long, the research and advisory firm contends.

The evolution of the Internet has provided consumers with rich and interactive experiences online. Unfortunately, the banking industry has not kept pace with the evolution of the Internet, and customers have started to demand that their banks keep up with the times. For the most part, financial institutions recognize their online shortcomings.

Celent says the question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer because financial institutions have just started to emerge from the impact of the financial crisis and are under extreme pressure to run sustainable businesses in the wake of increased regulatory pressures.

The good news is that next-generation online banking is on its way, according to Celent research. Some of these are in full swing; others are just emerging or expected to impact the space within the next three to five years.

"Online banking isn’t an alternative channel any more. It’s a mainstream channel," says Jacob Jegher, senior analyst with Celent’s Banking group. "This channel, however, requires a lot of attention. If banks don’t act swiftly, they risk critical customer relationships and revenue. It’s important that banks harness technology but don’t use it as their best foot forward."

What do you think?

No Time for Inaction

By Mark Brousseau

While it’s vital to carefully manage investments, it’s an important time not to “hunker down.” That’s a key message that IDC will deliver this morning during a Webinar on the firm’s predictions for 2009. IDC says that while the recession is slowing down the entire market, it is accelerating the transformation of the IT industry.

IDC believes the disruptive vectors of the market will be among the highest-growth sectors in 2009, as their advantages are magnified in a down economy. Suppliers who slow-down their transformation will limit long-term viability and miss near-term growth, IDC predicts.

For instance, growth of cloud computing will slow in 2009, IDC says, but still expand its growth edge over traditional offerings. Additionally, online commerce, while experiencing slower growth, will break the $8 trillion mark, and take more market share from traditional commerce. The number of people online next year will exceed 1.5 billion – about ¼ of the entire population of the planet – IDC predicts.

What do you think? Post your comment below.