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SNET: Plans for internet banks in Australia, says Ernst & Young
From: [email protected] (Jeremy Compton)
Subject: SNET: Plans for internet banks in Australia, says Ernst & Young
Date: Sat, 12 Sep 1998 03:04:23 +1200
To: [email protected]
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Plans for internet banks in Australia, says Ernst & Young
Sydney, Sept 9 AAP - Offshore and local companies have strategic plans to
establish stand alone
Internet banks in Australia to compete with the existing banking network,
financial services
consultants Ernst & Young said today.
Ernst & Young partner Andrew Keene, who specialises in technology strategy
for financial
institutions, said the international consulting firm was aware of both
overseas and domestic
companies with plans for internet banks.
"There are some plans that we are aware of," Mr Keene told reporters. "I
believe most of the plans
are formative."
He declined to name the companies.
Ernst & Young yesterday released its latest report on technology in banking
and financial services,
with more t0 of the world's largest financial institutions in 26 countries
participating in the seventh
global study.
Entitled Electronic Commerce and Connecting to the Customer, the report
analyses the technology
spending plans of banks, insurance companies, asset management and
brokerage institutions in the
United States, Europe, Asia and Australia.
The report found that technology spending priorities of Australia's
financial institutions to develop
new customer channels have been surpassed by the "more immediate issues" of
mergers and
acquisitions, the millennium bug and the Euro.
Kevin Hall, the national leader of Ernst & Young's Australian financial
services consulting group,
said that the new spending priorities "have meant that spending on the
critical area of improved
customer services has been delayed".
He said that the report found that financial institutions are "anticipating
heavy increases" in
technology spending, with technology budgets rising 14 percent in calendar
1998, tapering off to six
percent by 2001.
"But while spending rates will decline over time, the actual budget amounts
will continue to increase,
with actual budgets project to double between 1992 and 2000," he said.
However, technology budgets are predominantly being spent on mandated
projects such as computer
upgrades to avoid the Year 2000 software date problem.
The survey also found that only 12 percent of Australian institutions
believed that the internet will
help them retain customers and business, compared to 47 percent of US
respondents and 34 percent
of European respondents.
Russell Ives, a data warehouse specialist at the firm, said that Australian
banks view Internet services
such as electronic commerce or e-commerce as cost-saving devices whereas US
banks used it to
"focus on retaining customers".
"The great opportunity that exists for financial institutions in Australia
is to refocus their e-commerce
strategy towards customer retention," said Mr Hall, adding that some
institutions are "unsure how to
use" e-commerce.
Australian financial institutions are also behind their overseas
counterparts in integrating customer
data to develop sophisticated knowledge of customer needs to enhance the
cross-selling of products
and target services.
"Nobody has really integrated its completely," Mr Hall said of Australian
financial institutions.
Mr Ives said that banks have to advance data integration rapidly,
especially when it comes to
refocusing e-commerce strategies on customer retention.
Overseas banks such as Wells Fargo, Bank of Montreal and ING Bank are some
of the leaders in
e-commerce and internet.
"So our conclusion is that the most effective financial institutions will
develop alliances to deliver
electronic commerce," Mr Keene said.
AAP pjg 10/09/98 08-09NZ
� New Zealand Press Association
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-> Posted by: [email protected] (Jeremy Compton)