Nov 13 2002 : Retail banks could bolster their online presence by pooling resources in Web security, and secure e-mail and messaging products, argues JP Morgan Chase CEO, Yawar Shah. Banks with Internet services rely heavily on solutions providers, Shah contends, and by emphasizing a few vendors, “could prop up the best ones instead of spreading their money among those, and the many weaker ones”. With “the Internet reaching critical mass, we can’t have the vendors on the margin”, says Shah, who believes retail banking has not yet achieved the “collaboration” level of his “old world of payments and cash management”.
Shah’s thinking is likely affected by his position as deputy chairman of Swift, the financial telecoms co-operative that links almost 7,000 institutions in 200 countries. Despite the failure of Spectrum, the e-payments consortium that JP Morgan Chase set up with Wells Fargo and Wachiova, Shah wants more industry collaboration, saying, “it’s early days [and] the trick is to figure out which tools give a competitive advantage and which are part of the plumbing”. Banks, in particular, could unite to ensure that consumers feel safe when making online financial transactions, or work to educate consumers on security issues.
In short, banks should apply “established business disciplines to e-business, establishing metrics around, say, service costs, to determine how such costs change through online support”, American Banker quotes Shah as saying. “Online bill payment is a customer-retention linchpin”, Shah argues, while “presentment is a secondary focus” right now, since customers “want payment”. Generally speaking, banks’ attempts to achieve revenue from the Web “have mostly been unsuccessful”, according to Shah, but the uncertainty of e-business “is the fun part” in that “if this were all easy, they wouldn’t need us to figure it out”.
Source: http://www.americanbanker.com
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