The part I like is.....
"Value Creation on the Internet is increasingly the domain of
intranet and extranet projects, expanding beyond the traditional
business goals of building market awareness or increasing
customer acquisition, to create a significant effect on internal
processes."
The complete news release.....
Financial Services Companies Falling Short on Promises of Business Gains Via The Internet, Says Mainspring
09:07 a.m. Jul 28, 1998 Eastern
CAMBRIDGE, Mass., July 28 /PRNewswire/ -- It's estimated that more than 1,000 Internet initiatives are currently underway at the top 25 commercial banks, yet according to Mainspring, most are failing to deliver on promises of greater efficiency and cost savings. These and other striking conclusions are explored in the Internet advisory firm's latest Business Impact Study, "The State of Internet Value in Financial Services," released today at ( mainspring.com
"By misreading the business context in which transaction processing or decision-support initiatives must ultimately operate, financial services companies are missing the mark," said Patricia McGinnis, managing director, financial services for Mainspring. "Executives need to move beyond the product level and assess what's happening behind a web site to understand the real impact of their own Internet projects and those of their competitors."
In reviewing Internet initiatives within a number of financial service segments, including commercial banking, retail banking, insurance, and securities, Mainspring analysts have identified a number of key themes, including the following.
-- Financial services managers consistently overestimate cost savings, or underestimate the potential impact of the initiatives of others. Mainspring identified that, in many cases, the marginal transaction cost model that the company used did not reflect high organizational start-up costs and diseconomies of low-volume usage.
-- The bulk of financial Internet offerings are getting to market ahead of customer demand. Usage rates are well below capacity for services such as home mortgages and online brokerages, and the number of overall Internet users is growing far more quickly than the number of customers using Internet-based financial products. Mainspring reports that there is no clear industry standard for packaging and pricing of online banking solutions, which is holding usage to approximately 8 percent of small businesses.
-- Product leadership is difficult to sustain as 80 percent or more of customers will have access to similar features provided by competitors within 12 months.
-- Value creation on the Internet is increasingly the domain of intranet and extranet projects, expanding beyond the traditional business goals of building market awareness or increasing customer acquisition, to create a significant effect on internal processes. For example, Mainspring reports that the Internet is already making the private-placement process more efficient, saving agent firms an average of 20 percent of tangible (printing, faxing, copying) and intangible (project management, employee time) costs.
The Mainspring study offers additional analysis in more than a dozen "ProofPoints," examining the delivery of Internet value in segments such as online bill payments, home mortgages, foreign exchange, and electronic claims by leaders such as BancAmerica Robertson Stephens, Countrywide Home Loans, Sonnet Financial, and Kemper Insurance.
The newly released research is the latest in an ongoing series of monthly Business Impact Studies issued by Mainspring. Initially targeted at the financial services industry, Mainspring's research and analysis addresses the needs of executives grappling with the impact of the Internet on their business and their industry at large. Future reports will examine the emergence of new online business models, the challenges of demand creation, and the shift of customer ownership in an online environment.
About Mainspring
Mainspring is an advisory firm enabling executives to accelerate their Internet business decisions. Through on-site, accelerated business sessions, personal analyst interaction, and in-depth research and analysis, Mainspring provides rapid Internet strategy alignment, project assessment and validation, and team mobilization.
Mainspring's annual service serves executives in industries such as financial services. Based in Cambridge, Mass., Mainspring is a privately held company. Corporate headquarters are located at One Main Street, Cambridge, MA, 02142; phone: 617-588-2300; fax: 617-588-2305. For more information, visit Mainspring online at mainspring.com. SOURCE Mainspring
Copyright 1998, PR Newswire
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