The Next Wave of e-Finance

With the interaction time between banks and customers shrinking with every digital innovation, the bank's role as trusted caretaker is diminishing. In doubling their existing services through electronic applications, banks are pushing customers into increasingly self-service behavior, and along the way are forfeiting person-to-person contact.

What this means is that speed of access and delivery, so heralded in other venues, actually impairs the financial services industry. The customer logs on, pays a bill, and leaves; checks a balance, and leaves; notes an interest rate, and logs off. The bank misses the chance to discuss mortgage options, account transfers, bill payments.

Wealth management requires banks not to speed up interactions, but to slow them down; not to encourage logon-logoff habits, but to lengthen time online. The longer customers remain online, the more the bank can learn about them, attract their business, and foster information exchanges.

But a bank can't just slow down service. Why would customers remain online any longer than they have to?

Instead, banks must devise ways of enticing customers to log on and stay on by making the experience more informative, in which they can do more than just retrieve information and pay bills.

This is the next wave of e-finance, the wealth management phase. New technologies and business models are converting e-finance into an integrated medium of investment, transaction, and financial planning tailored to the customer. Through consolidation and integration programs, banks can draw together on a single platform their multiple applications and the customer's assets. The next-step portal provides generic services and information, but it also displays the user's complete financial profile: accounts, mortgages, stock holdings, etc.

The bank constructs a portal customized to individual users, stocked with their complete, up-to-the-minute, secure financial data. With more personal information to deal with, the customer sticks to the site. Instead of using e-finance merely to make a quick transaction, customers treat it as a personal accountant, a financial desktop constantly monitoring the user's portfolio.

As customers impart more personal information, banks will respond not just with answers to questions, but with concrete suggestions for wealth management. For example, if a customer inquires about auto loans, the bank can answer not only by listing its interest rates and payment plans, but by fashioning a unique loan offer.

As the relationship deepens, banks regain their role as financial guide and e-finance becomes a daily medium of wealth management.