Adoption of Digital Services by Business and Financial Services to Grow Over Next Three Years, Says IDC Financial Insights
December 7, 2009 – An in-depth global survey of banks, consumers, and corporations conducted by IDC Financial Insights reveals that the adoption of digital services – defined as the distribution of content, information, or product across the Internet, mobile device, or other electronic delivery channel – continues to grow, and financial institutions recognize the critical need to invest in this channel.
According to the IDC Financial Insights report, Business Strategy: Digital Services Impact on Customer Retention and Acquisition, both U.S. and European financial institutions are taking a more aggressive approach and will be investing a larger percentage of their IT budgets in digital services over the next three years. IDC Financial Insights believes that financial institutions that do not act quickly may find themselves in a rapid game of catch-up.
Cost savings, improved efficiency, and strong security all play to the strengths of digital services. Corporate treasurers highly value the digital services their banks provide, and banks value the non-interest revenues they can garner from these services.
"Driving customers to low-cost delivery channels while maintaining favorable satisfaction levels is just good business. Satisfied customers stay with their financial institution during both good times and bad times.Investing in digital services is one way to increase satisfaction and retention."
IDC Financial Insights predicts:
* The future of digital services will not be about transacting; instead, it will be about interacting with clients – meaning low-value, transaction-based services will be standardized and commoditized. Digital services will instead provide more analytic and reporting capabilities, more user-controlled customization, and more self-service capabilities.
* Next-generation digital services will continue to evolve. Financial institutions must keep an open mind to future requirements and ensure that investments made now are flexible and scalable to adapt over time.
* Banks will continue to invest in digital services, but they cannot rely upon the new revenue streams they have gained from the recent flows of deposits. Banks have won that business for now, and will have to prove themselves to win that business for the long term.
* Business clients do not visit bank branches or ATMs; their primary mode of interaction with financial institution is digital. Many regional banks are using their digital service offerings as a way to attract a national client base – using digital channels, vault services, and remote deposit capture to build their businesses without branches. Banks recognize this, and are continuing to invest in this channel. Businesses likewise see the efficiencies they can gain – through reduced staff, fewer banking relationships, increased cash flow visibility, and more automation when these services are well-designed.
(Source-IDC Financial Insights)
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