Study: Corporate Banks Turning to the Net
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There will be 2,000 global corporate banking sites on the Internet within the next two years--a four-fold increase--according to a new study conducted by Booze-Allen & Hamilton.
The management consulting firm reported that corporate banking sites are fast on the online heels of their retail banking brothers, and that 600-700 of these new sites will be fully functional by the year 2000.
The study focused on 220 financial institutions around the world, and found 519 corporate banking Web sites in existence. Retail banking sites number about 1,200, but the study's author, David Howe, said that corporate banking will close the gap with the emergence of e-commerce, Web applications, and customer demand.
"Today's snapshot reveals that most financial institutions have no corporate banking Internet sites," said Howe. "Of those that do, 92% offer only basic functionality. But the picture by the year 2000 will be very different."
- 65% of corporate banks plan to build Web sites soon
- 42% aim to deliver advanced sites with interactive corporate banking features
- 39% of corporate customers will use some form of Internet banking within three years
- Major banks plan to quadruple their Internet investment
- Australia, Canada, and the U.S. make up 100% of the advanced sites at present
- North America and Europe account for 79% of total current sites
Howe suggested that corporate banking will find more homes on the Web by offering a variety of resources, such as allowing customers to execute and monitor hundreds and thousands of financial transactions daily, and providing constant daily updates to people globally in a cost efficient manner.
Also spurring growth will be "open standards" that enable corporate clients to oversee multiple accounts at multiple institutions from a single account at a single institution. Driving competition, this will allow clients to pick the best products at competitive prices from numerous providers.
Security, the big worry among corporate bankers, should be addressed by developments in sophisticated encryption technology and emerging standards in electronic data transfer (EDI), according to the study.
Further Booze-Allen & Hamilton findings and recommendations can be found in the online version of the report.