Steve Gesner is Vice President of the Alternative Delivery Channel group at the Toronto Dominion Bank (TD Bank) in Toronto, Canada. The group is responsible for developing new customer connections via both proprietary and public networks utilizing Windows (TD Access:PC), Web (www.tdbank.ca), Interactive Voice Reponse, and Call Centre (TD Access: Telephone Banking) technologies.
We are rapidly approaching the second anniversary of Web sites established by Canada's Financial Services Providers (FSPs). The list includes TD Bank (www.tdbank.ca) and other members of Canada's "Big Six" banks, trust companies, brokerages, mutual fund companies, insurance companies, and a host of other players. With more players joining the fray almost daily, the Web is becoming an increasingly important delivery channel for both traditional FSPs and a variety of new and lesser known entrants.
In many respects, the Web allows these non-traditional entrants to level the playing field. It is a medium through which everyone can establish two-way digital relationships with customers. As the old and new attempt to better understand the Web, there are a number of issues which are being discussed late into the evening. How each player addresses these issues will determine whether their forays into the marketplace on the Web really deliver customer value and returns to their shareholders and owners.
Riding this wave of technology, the Web may soon be the most secure way of doing business. The winners here will take technology as a given and focus their resources on developing and implementing flexible security policies, risk management procedures, and customer education programs. This latter point is of key importance as no one will benefit if the customers' don't trust the FSPs to deliver on security.
At the other end of the spectrum, there are players entering the marketspace with virtually no brand equity. Bayshore Trust (www.bayshore.com), with only eight physical branches, is suddenly recognized across Canada and even globally due to its presence on the Web. This presence has been reinforced by some new approaches to advertising and promotion on the Web. And with its introduction of online personal loan applications and approvals, Bayshore is further building its brand equity in the marketspace as an aggressive technical innovator.
In the area of discount brokerage, companies like Green Line Investor Services (www.tdbank.ca/greenline) and Charles Schwab (www.schwab.com) have enhanced their brand equity through technological leadership. In fact, one would be hard pressed to name more progressive organizations amongst FSPs. Yet Lombard Securities (www.lombard.com) beat them both to market with Web-based online brokerage services by about 15 months. And Lombard, like Bayshore, continues to build brand equity. For these players without the benefit of marketplace longevity, the winners must rapidly lever their Web presence and technology to establish creditability and trust with customers.
The customer-centric approach mirrors another marketplace technique -- the relationship manager. Typically, a relationship manager is responsible for acting as the central interface between a customer and all areas of the FSP. In its earliest implementations (e.g. www.bmo.com), this has translated into customer home pages within the FSPs' sites which contain pointers to customer defined areas of interest. More recent models such as Fleet Financial (www.fleet.com) are proactively presenting information to the customer which should be of value to them based on information stored in a profiling system. This type of model also can be evolved into a transactional model for existing customers.
Given the many different types of customers and prospects FSPs deal with, it is likely no single model along this spectrum will address all requirements. The winners therefore will be the companies which can concurrently present compelling content and navigational aids to casual visitors, prospects, and ultimately actual customers with the underlying goal of moving people through from casual visitor to actual customers as effectively and non intrusively as possible.
The impact of a global economy on the auto industry is instructive. In the Sixties, non-traditional players began entering what had for many years been an unassailable North American automobile marketplace. The incumbents dominated market share across all products and were making record profits. The traditional customers had never heard of the new players and had no use for their products. And then, in what seemed like an overnight sensation, the Japanese captured 30% of the North American automotive market and small, fuel efficient vehicles were the best sellers. In looking back, the overnight sensation took 15 years. But the ramifications are still being felt by both the Big Three automakers and their customers. As Web years shrink from one month to one week to one day in the future, the dynamics of this new marketspace for FSPs will rapidly begin to take shape. It is still too early to select winners and losers. However, if the experience is anything like what happened when global competition transformed the auto industry, the customer will be the big winner and Canada's Big Six banks will continue to play a major role in addressing the needs of their customers in the new marketspace.