FYI....Check out the end of this article -- interesting predictions for the Online Mortgage Market....
<<Wednesday September 1, 10:35 pm Eastern Time
Online brokerages must beef up customer service
By Elizabeth Smith
NEW YORK, Sept 1 (Reuters) - If online brokerages hope to succeed in the long term, they will have to provide timely, competent customer service, says an Internet market research firm after releasing Wednesday the results of a survey it conducted during the second quarter.
But for those firms that take seriously questions and complaints from customers, the rewards promise to be rich, says New York-based Jupiter Communications.
Assets managed by online financial services firms will balloon to more than $3 trillion by 2003, up from $415 billion as of the end of 1998, according to a separate report Jupiter distributed to clients in July.
Jupiter's second-quarter customer-service survey of 150 Internet companies showed that only 39 percent of financial services firms responded to customer inquiries within a day. In stark contrast, some 64 percent of Internet retailers got back to customers within the same time period, the survey indicated.
A similar survey conducted in the first quarter reflected that 24 percent of online financial services firms responded to customers within a day, versus 26 percent of Internet retailers, Jupiter said.
''For any online financial services firm that hopes to have a successful business at anything above deep-discount rates, having better-than-adequate customer service is absolutely necessary,'' Jupiter digital commerce analyst Robert Sterling told Reuters.
Sterling said beefing up customer-service track records must become a top priority for online financial services firms.
''This is a very serious issue,'' Sterling said. ''It negatively affects customer acquisition, customer retention overall customer happiness. It also creates a flash point for government intervention.''
Sterling said Jupiter's survey was based on 25 of the most ''well-known and widely accessed'' online financial services firms, but he declined to name the firms.
In its July report on the online financial services sector, Jupiter predicted whopping growth. Households trading on line will likely mushroom to 20.3 million in 2003, more than four-fold the 4.3 million U.S. online households recorded as of the end of 1998.
Also, the mean income of online households is predicted to drop to $55,000 by 2003 from $62,000 at the end of 1998. Presently, about 30 percent of the households online have an income of $75,000 or more, but that number will dip to 20 percent, according to the report.
Jupiter projected that 41 percent of U.S. households, directly or indirectly, would have online trading accounts by 2003.
Although the number of trades and commissions per household will decline, online brokerage revenues from interest, fees, and non-transaction services should grow to 80 percent of total online brokerage revenues by 2003 from 20 percent at the end of last year, the report predicts.
Jupiter also cited the online mortgage originations business as potential red-hot sector, although its growth will depend greatly on interest rate fluctuations.
Under a best case scenario, online mortgage originations will grow to $155 billion by 2003 and make up 16 percent of the total U.S. market. Under bleaker circumstances, online mortgage originations will still grow to $101 million, up from $4 billion at the end of 1998.>> |
