♦  Management Research on Vertical Industries

Online Banking

Bricks-and-clicks are still the right mix, although more and more banking will be done online as the boomer population ages into its 70s in the next decade. In an Ipsos-Reid survey of 1,000 US consumers commissioned by the American Bankers Association (ABA), 35% of respondents ages 18 to 34 said they banked online more often than they visited a bank branch or an ATM or used the telephone or postal service to conduct their banking.Another 33% said they mostly used ATMs. By contrast, people ages 35 to 54 preferred bank branches (32%) to online banking (29%), as did 47% of people older than 55. Just 13% of that age group preferred online banking. Retired people overwhelmingly preferred to visit a bank branch (48% of respondents), while 35% of full-time workers preferred online banking, most likely for the convenience. Parttime workers, who may have more time to run errands, did not have a strong preference between branches, the Internet or ATMs (29%, 29% and 30%, respectively), although people without jobs were more likely to visit ATMs (35% of respondents) than to go to a branch (28%) or online (17%).

Put another way, 67% of people ages 18 to 34 do not bank online, according to Mintel International Group. The Ipsos-Reid/ABA data show 65% of this age group chooses other venues for banking most often. One element Mintel found: 37% of respondents ages 18 to 34 said that better customer service elsewhere would spur them to change banks.

from Banking and Bill Paying Online: Chasing Those Digital Dollars (EM-2283)

Retail Banking Business Process Outsourcing

Datamonitor’s survey revealed that change of IT from a cost to a service will be on the top of agenda for retail banking this year. As retail banking technology becomes more sophisticated, the speed of change at both business and IT level is increasing the requirement for rapid adoption of new technologies, and is shortening the timeframe, over which returns must be made, urging retail banks to focus on cost reduction to drive maximum business value. Further, retail banks are currently facing high support and maintenance costs due to the plethora of platforms and operating systems being used. Thus, retail banks are also looking to develop a streamlined, efficient IT infrastructure to support profitable growth. Regulatory compliance will also dominate banks IT and business projects regardless of geography.

To achieve these objectives banks are increasingly turning to outsourcing. While this has not been the case until recently, retail banks are getting more confident in using these types of services and rate outsourcing quite high as the means to achieve their major business and IT goals. By outsourcing some or all their IT and business operations to third-party providers, retail banking institutions can achieve greater transparency and efficiency of their infrastructure and business processes, thus facilitating the achievement of their strategic operational goals in a more cost-effective way.

from Outsourcing & IT Services in Financial Services Retail Banking BPO (Review Report) (DM-1652)

Digital Media

By most measures, iTunes is a success story. It has single-handedly created a legal and user-friendly digital music service that has translated well across different markets around the globe.The combination of the iPod and iTunes has been a winner for Apple, but that is only half the story.The irony is that the iTunes model and restrictive DRM technologies imposed by record labels are keeping illegal peer-to-peer (P2P) file sharing alive and well.Why? Because music lovers are waking up to the fact that they are paying too much and getting too little.The restrictions imposed upon digital music downloads are not providing the flexibility that users want. It is for this reason that new licensing arrangements are likely to emerge in the near future which will allow users greater flexibility in what they can do with the music they purchase.The iTunes model has been an important steppingstone in the evolution of the music sector, but it will not be the future of music. Music lovers will demand much more, and if record labels want to stay ahead of the game, they would do well to look up from their balance sheets and observe what music lovers are doing with their music. One thing they are doing is taking their music wherever they go.Globally, mobile music services will quickly exceed PC-based online music services in the years ahead.

from Digital Downloading: Music, Movies and TV (EM-2262)

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