What Made Lloyds TSBs Net Banking No1 Website in the Business and Finance Category in the UK - Case Study Example

Net Banking Table of Contents Table of Contents Introduction 3 E-marketing 5 Web design 6 Sales & Service 9 Conclusion and Recommendations: 10 Gup, B.E., (2003), The Future of Banking, Published by Quorum Books, Westport, CT. 12 Financial CRM: The Lloyds TSB Experience, (August 2004), Retrieved on March 29 2009, from: http://www.mycustomer.com/cgi-bin/item.cgiid=130915 12 Lloyds TSB Bank Plc., (No Date), Internet banking, Retrieved on March 29 2009, from http://www.lloydstsb.com/internet_banking.asp 12 Lloyds TSB Corporate Markets for 'Launching the Lloyds TSB Corporate Markets brand', December 2007), B2B Marketing Online, Silver Bullet Publishing, Retrieved on March 29 2009, from: http://www.b2bm.biz/features/groupId=27222&articleId=27320 12 Lloyds TSB is Hitwise UK Online Performance Award Winner, (March 2009), 24-7 Press Release, London - England, Retrieved on March 29 2009, from: http://www.24-7pressrelease.com/press-release/lloyds-tsb-is-hitwise-uk-online-performance-award-winner-93731.php 12 Mary, J.C., (1997), Banking and Finance on the Internet, Published by John Wiley and Sons, ISBN 0471292192, 9780471292197. 13 13 Introduction Technology in general and Internet technologies in particular, has revolutionized the Banking industry. The first ATM put up by City Bank of New York heralded the era where technology graduated from being a superficial accessory to being an integral part of the entire banking process. The present form of online banking finds its roots in the pioneering initiative launched by four of the major banks of New York, Citibank, Chemical Bank, Chase Manhattan and Manufacturers Hanover bank. These banks simultaneously, yet individually, offered home banking services that allowed bank customer to maintain records as well as carry out transactions without leaving the comforts of their home (Mary J.C., 1997) Internet Banking received a major boost with the rapid development and penetration of banking activities conducted over the internet. Activities like money transfer and securities trading can be done through internet banking. It's a virtual bank in itself which is often an extension of its brick and mortar model. With expanding information technology it is wise for the banks to adopt and leverage it, for expansion of business and better and faster delivery of services to the customer. Some of the benefits of internet banking are: 24 Hrs service. Real time service delivery. Geographical neutrality. Cost saving. Faster service. Broader reach. Internet banking is being used both in B2B (business to business) and retail banking. There are also some banks which only have a virtual presence, for example Nexity Bank. Generally bigger banks tend to offer internet banking. This is because smaller banks often find the cost of the service unprofitable before they expand to a certain scale (Gup B.E., 2003) Lloyds TSB is the largest retail bank in UK serving over 30 million customers. Being one of the largest banks in UK and the world, it has taken to internet technology in a big way and offers an array of services to its customers over the internet. Some of the internet banking services offered by TSB are like payment of bills, management of direct debit and standing orders, online application for savings account- over draft - credit card -personal loans, online travel money (without commission),online statements and so on. They also provide online banking guarantee and free weekly text alerts and the best is that registration for such services comes free of cost. (Lloyds TSB Bank Plc., n.d.) Internet banking has different stages. The very fundamental or basic stage is about 'information'; it offers information about the bank and its offerings. The next level is 'communication' which offers interaction between the customer and the bank's information or IT system. 'Transaction' is at the core of the next stage, where customers virtually transfer money/funds, pay bills and so on. (Ravi V., 2007) Internet banking has helped banks to do considerable amount of cost saving and thus drive organisational efficiency. Also the capital expenditure in setting up internet banking is comparatively lower in comparison to setting up ATMs or opening of new branches. With internet banking the bank is also able to get access to customers across the globe, which in case of brick and mortar model would have been next to impossible. It also helps it in business expansion. Cost per transaction of different delivery modes or channels are also different; face to face channel is $1.07, telephone banking is $0.54, ATMs $0.27, while internet banking is the lowest at $0.02. (Ravi V., 2007) TSB Lloyds provides banking services to both private and corporate customers. In order to compete within a rapidly changing market and also effectively cater to consumer demand, Lloyds TSB strives to improve and enhance their online or net banking offerings. The consumers today expect that an array of products and services will be at their disposal 24X7. In order to remain ahead in the competition over the years, TSB Lloyds has implemented innovative policies and approaches to improve and advance their business. E-marketing E-marketing comprises marketing, advertising and promotion of a firm's products and services on the internet. Today internet has become an integral part of the lives of many. Whether in office or at home, one uses the internet for accessing and transferring information. As such the marketing strategies today focus on the virtual platform of internet. Emarketing is a broad concept which aims at branding and promoting a company's offerings. One of the unique features of e-marketing is its ability to offer 'real time interactivity' with the customer. Following are the benefits offered by e-marketing: Cost Saving: Organisations can reach out to a wide array of customers over a diverse geographical area at minimum cost. Interactivity: The idea is to popularize a brand of product or service by building communities around them. Wide (global) reach: Anyone connected to the web, can access the content. Real time data update: Offerings and other information can be updated as and when it happens. Nowadays companies are putting up 'blogs' which present perspective and opinions about the company, industry and the economy as a whole. Emarketing is also being used in 'press relations'. Some of the common modes of Emarketing are: Company websites. Web advertising. E news letters. Email. Blogs. E-marketing has a range of advantages over traditional media based advertising, and the advantages are especially significant for a bank. E-marketing helps a bank identify the prospective customer who could get in touch with them through their website. It also cuts cost in terms of initial information delivery to the customer. Instead of a heavy courier delivery, detailed report on a particular mutual fund or insurance could be put up on the web, which also cuts time of delivery.It's thus only logical for banks and companies to leverage the power of Web2.0 to engage better with the target customer. (Chew P. L., 2002) Fig 1: E-marketing & the Internet (CHEW P. L., 2002) Web design However strong a company's e-marketing plans may be, it is going to remain unsuccessful if certain points about good 'web designing' are not kept in mind from the beginning. These are: Usability- The ease of usability of any website adds brand value to the business. The opposite is always detrimental for the perception towards a company's Emarketing initiatives. 'Navigation' from one link to another should be smooth and arranged in a logical manner. Usage of Graphics - Companies should keep in mind that the 'Emarketing' features of its website should not be heavy on 'graphics'. This might result in the browser taking a lot of time to load especially in case of slow internet connections (Dial up Net). In other words consumers who do not have access to fast broadband internet might loose interest in the marketing campaign' or might form a negative image about the brand or the company itself. Aesthetics - Any 'marketing campaign' or website should ideally be aesthetically pleasing to the customer's eye. Placement- The placement of the 'Ads' should be properly planned and focused on those websites from where the target consumer demography will be accessible. For example 'Ads' for mutual funds would be best fit for economic news sites. TSB Lloyds' understanding of the importance of effective web designing reflects in the layout of its company website. The current website of Lloyds efficiently addresses important areas like connectivity and information management. The website in many ways helps boost their business. The design layout of the website keeps the visitors glued to their computer screens and thus makes a lasting impact on their minds. Lloyds' website has the much required professional look and feel it deserves. The website has maintained a fine balance between standard criteria ad unconventional touch to the entire set up. The layout of the Lloyds TSB website makes it highly convenient for the first time visitors to browse through the different sections of the website. Similar design elements have been clubbed together to give it a compact look. For example 'products', 'manage your accounts', 'login for internet banking', 'help and assistance tools, and many more similar features are clubbed together in different sections of the website. The navigational part of the website is created almost to perfection. Since the content is not cluttered it is much soothing to the eyes of the visitors and aids in equally smooth functioning. In the domain of business and finance, Lloyds TSB won the name of UK's number one website. (Lloyds TSB is Hitwise UK Online Performance Award Winner, March 2009) Business-to-business (B2B) Ecommerce is broadly of three types: B2C- Where a business sells it products or services to the consumer. B2B- Where business transactions happen between two business entities. C2C- Where two customers get connected over the net and carries out monetary transactions over goods. B2B is one of the biggest areas of ecommerce. It spans over areas like 'supply chain', 'E-procurement', 'shipping', 'ware housing', 'travel and hospitality', etc. (Medjahed B., et al, 2003). It has been predicted by consultants in this sphere of the business world that the total market, that B2B Ecommerce will be amounting to the range of $12.4 Trillion by 2012. Number of people connected to the net will be around 1.9 billion by 2012.By 2012, more number of mobile devices will be used to get onto the net, along with usual laptops & PCs. China which already has the largest web population in the world, will be a host to 375 million net users by that time. By 2012, B2C transaction will be around $1.2 trillion worldwide. Ad spends on the net was $ 65.2 billion in 2008 & that will go up to $106.5 billion by 2011. There will be roughly around $1.5 billion mobile internet users by 2012. (IDC's Digital Marketplace Model and Forecast, June 2008) TSB Lloyds in the year 2007 won the best B2B brand awareness campaign award. This was the result of the effort taken in 2006 towards creating a single brand covering all business units of TSB. Prior to this Lloyds TSB had brands that lacked the much desired coordination. Such lack of coordination and synchronisation reflected a confused mix of styles that resulted in lower awareness among the consumers. A lot was put in to make sure that the new brand had the visual identity accompanied with a core set of business capability messages. Thus came up the new brand DNA: Brand name - Lloyds TSB Corporate Markets Brand proposition - trusted partners anticipate and deliver the best financial solutions for you Brand capabilities - corporate banking, debt capital markets, structured finance and financial markets. (Lloyds TSB Corporate Markets for 'Launching the Lloyds TSB Corporate Markets brand', December 2007) Sales & Customer Service Sales and customer service is one crucial area of importance for any organisation. CRM (customer relationship management) through proper customer service would ensure that the customers keep coming back to the business for repurchase. In Internet marketing is much more focused due to the ability of pinpointing the consumer base through technology. The firm could focus even on individual customers to engage with him and pave ways for bigger transactions in future. CRM is highly based on latest IT technology. These technologies and software are used to target and focus on those customers who have the potential of providing the highest business to the company. A good base of loyal customers has the potential of getting similar profiled customers, to the business. (Houghton and Miffin Co., n.d.) For Lloyds TSB, customer relationship management is more of a day to day business activity than an individual support function. Unlike players in other business domains like retail and manufacturing who use CRM for acquiring new customers, Lloyds TSB uses CRM for cross selling and retaining focus. TSB recognises CRM as a journey rather than a destination. (Financial CRM: The Lloyds TSB Experience, August 2004) Conclusion and Recommendations: In the 21st century any business entity should take advantage of technological progress and leverage it to expand its business. The banks are not any different. Over the years the complexity of the products and services has increased considerably. While on the other hand the customers have become more demanding. They have become prudent in their choices. Due to a plethora of choices in front of them, it's completely on the discretion of the customers to decide with whom to bank with. Most of the banks offer the same kind of products therefore the factor that makes a bank more competitive than its counter part is the ease with which its customer can access these services or products. One of the best, fast and yet cheap way towards this end is internet banking. If leveraged in a proper manner, technology can help banks earn huge dividends in terms of new customers from far across places. Issues concerning security and privacy, play a crucial role in gaining the customer's faith. Whether one is retail or business customer, the broad issues remain the same for every customer. It might be the case that the scale of transaction done is different but the perspective in terms of security remains the same. In future with further development in IT, more banks will go online and before taking the plunge it is necessary for them to gain the trust of the consumers. Business to business (B2B) banking span over a broad area of net banking and the complexity of transactions are also more than that in case of retail consumers. But this area offers a lucrative business opportunity which if leveraged carefully, would ensure more revenues for the bank. Moreover satisfied business customers would accept more diverse product offerings of the bank, thus increasing its business opportunities. Apart from the issue concerning security or high-quality customer care, a bank should ideally focus on the future and the forthcoming trends and opportunities, which can be exploited for garnering more business. Recent technology in the sphere of voice recognition system should be utilized to make the net banking experience easier for the consumer. Already big software behemoth Microsoft has integrated this technology in their vista operating system. Voice technology, if incorporated in hand held devices, PCs, laptops, ATMs, etc, would make the online banking experience more interesting and user friendly and accessible (Turner B., January 2007). Lloyds TSB's net banking can be considered to be a successful; testimony to this fact, it has recently been named the No.1 website in the business and finance category in UK Despite the overwhelming success, it has sufficient rooms for improvement. TSB should keep track of all that is happening in the technology domain and focus on integrating new and better technologies in the business procedures. (Lloyds TSB is Hitwise UK Online Performance Award Winner, March 2009) References: Chew, P. L., (2002), E Commerce Strategies for Business Markets-Marketing and the Internet, University of Missouri, Retrieved on March 29 2009, from: http://www.umsl.edu/buslchew/ppt3/BA%20303%20C5.ppt Gup, B.E., (2003), The Future of Banking, Published by Quorum Books, Westport, CT. Financial CRM: The Lloyds TSB Experience, (August 2004), Retrieved on March 29 2009, from: http://www.mycustomer.com/cgi-bin/item.cgiid=130915 Houghton & Miffin Co., (No Date), E-Marketing and Customer Relationship Management, Wayne State College, Retrieved on March 29 2009, from: http://academic.wsc.edu/faculty/kehallg1/ppt_ch06.ppt IDC's Digital Marketplace Model and Forecast, (June 2008), Retrieved on March 29 2009, from: http://www.idc.com/getdoc.jspcontainerId=prUS21303808 Lloyds TSB Bank Plc., (No Date), Internet banking, Retrieved on March 29 2009, from http://www.lloydstsb.com/internet_banking.asp Lloyds TSB Corporate Markets for 'Launching the Lloyds TSB Corporate Markets brand', December 2007), B2B Marketing Online, Silver Bullet Publishing, Retrieved on March 29 2009, from: http://www.b2bm.biz/features/groupId=27222&articleId=27320 Lloyds TSB is Hitwise UK Online Performance Award Winner, (March 2009), 24-7 Press Release, London - England, Retrieved on March 29 2009, from: http://www.24-7pressrelease.com/press-release/lloyds-tsb-is-hitwise-uk-online-performance-award-winner-93731.php Mary, J.C., (1997), Banking and Finance on the Internet, Published by John Wiley and Sons, ISBN 0471292192, 9780471292197. Medjahed, B., Benatallah, B., Bouguettaya, A., Ngu H.H.A., (2003), Business-to-business interactions: issues and enabling technologies, Purdue University, Retrieved on March 29 2009, from: http://www.cs.purdue.edu/homes/ake/pub/Survey_B2B_VLDBJournal.pdf Ravi, V., (2007), Advances in Banking Technology and Management: Impacts of ICT and CRM, Published by Idea Group Inc (IGI), ISBN 159904675X, 9781599046754. Turner, B., (January 2007), 'Speech technology could open up online banking', Financial Markets, Retrieved on March 29 2009, from: http://www.financemarkets.co.uk/2007/01/18/speech-technology-could-open-up-online-banking/ Read More