June 5, 2001
Strategy Analytics Warns: Financial Customers Won’t Bail Out E-Business Technology Suppliers

Boston, MA ­ Major financial institutions have retrenched from their aggressive movement into e-commerce by cutting back on funding and staffing. E-commerce planners are less enthusiastic about prospects for e-commerce in financial services, and less secure about their own careers, than they were
eighteen months ago, when senior management was pushing massive sums of money toward the online channel to fight expected competition from dot-com upstarts.

These findings are presented in a new study published by the Internet Business Strategies (IBS) service at Strategy Analytics, “Banking on Online Customers: IBS Roundtable Panels of E-Commerce Planners for Financial Services.” IBS provides leading players in the e-commerce technology industry with insights into key market, technology, and infrastructure investment issues. Strategy Analytics co-hosted two roundtable panels of some twenty e-commerce planners from major financial service institutions in New York City and Chicago. Among IBS findings from the sessions are:

Major financial institutions are using the current economic downturn as a time to regroup and rethink their efforts in e-commerce.  Executives responsible for e-commerce seek improved measuring and reporting techniques to evaluate and monitor the overall effectiveness of their strategies. Today’s e-commerce executives focus their initiatives primarily on servicing the existing customer base, rather than developing new customers through e-commerce.

According to Donald Bellomy, Director of Internet Business Strategies at Strategy Analytics, “Current corporate concern regarding integration with existing off-line functions and the creation of smooth transitions for newly merged companies direct attention away from new investment for Web transactions. E-commerce within financial services will continue to grow significantly, but the sector will not play the leadership role over the next three to four years that might have been expected, given its
historically strong level of overall IT investment.”

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