342874 – Financial MarketingIntroductionThis report presents the issues faced by Internet banking organizations and the ways to deal with them. In addition, it would also include a marketing plan which would suggest how to best mitigate the existing deficiencies and market the financial products more effectively. Online bankingInternet banking relates to performing transactions, payments etc. over the Internet through a bank, credit union or building society's secure website. This allows customers to do their banking outside of bank hours and from anywhere where Internet access is available. In most cases a web browser is utilized and any normal internet connection is suitable.
No special software or hardware is usually needed. ServicesOnline banking usually entertains its customers by providing such services as Bank statements, Electronic bill payment Funds transfer, Investment, Loans and advances and Account aggregation etc. Current ScenarioVirtual Banks are now growing in number and are observed to have low costs compared to traditional banks, hence, they have been able to offer higher interest rates. Some banks have both physical branches as well as online banking facilities while others only operate in the cyber space.
There is one serious issue which is commonly faced by most organizations and it is that of security. Though protection is provided through password authentication, safety still remains a major problem with the online banking system. It is also considered more vulnerable to fraud since a relatively small number of people use internet banking compared with the total number of banking customers world wide as mentioned in the report (13% of UK adult population in 2004). Problems with Internet Banking First and the foremost issue related to Internet Banking has been that of increasing rate of lapsing amongst Internet bank customers.
According to the Research conducted by Virtual Surveys in late 2004, there exist three key barriers which are holding the majority back from banking online. These include a general lack of awareness of the benefits of online banking, concerns about security and lack of personal support in online banking. The banks, thus, thoroughly need to review their marketing campaigns and reach their audience directly rather than relying on other sources. Furthermore, customer support is also absolutely essential to be provided to the customers or else they will not be willing to switch from the traditional banking to online.
Thirdly, banks also need to develop their websites’ interface to make Internet banking easy and accessible to its users. The main challenge lies in attracting the first time users towards online banking but for that, an in-depth understanding of what motivates these people has to be developed. The banks are going to have to go back to the grassroots level and conduct research directly with the customer. Marketing Mix“Marketing mix can be defined as a set of the marketing tools that the firm uses to pursue its marketing objectives in the target market” (Kotler, Ang, Leong and Tan, 1999). The marketing mix is not a theory of management that has been derived from scientific analysis, but a conceptual framework which highlights the principal decisions that marketing managers make in configuring their offerings to suit customers’ needs.
The tools can be used to develop both long term strategies and short term tactical programmes” (Palmer, 2004). By understanding the impact of the Internet on marketing mix and competitive forces, E-business managers can adopt appropriate strategies for meeting the unique challenges of E-business.