E marketing 2014-2015

Electronic Business

E-Marketing Tools

BIS, 3rd, sem2, 2012-2013 1

Electronic Business

Marketing:

A comprehensive process that involves every aspect of a business from designing its products, setting the pricing strategy to analyzing sales statistics and collecting customer feedback.

BIS, 3rd, sem2, 2012-2013 2

Electronic Business

E-Marketing:

Refers to using technology such as the internet, website and email, sms, including its wide variety of options and tools to conduct your marketing activities and achieve your marketing objectives.

BIS, 3rd, sem2, 2012-2013 3

Electronic Business

E-Marketing tools and strategies1) Business websites; 2) Search Engine;3) Email; 4) Online newsletters/e-zines; 5) Online catalogues; 6) Online press releases; 7) Online surveys;

BIS, 3rd, sem2, 2012-2013 4

Electronic Business

E-Marketing tools and strategies, cont..8) Online customer service; 9) Banner advertising; 10)Affiliate marketing. 11)Mobile telephone marketing; 12)Online Community (Friendster,

YouTube) - new13)Web Log (Blog) - new

BIS, 3rd, sem2, 2012-2013 5

Electronic Business

E-Marketing Concept• get the right product • promoted in the right way • sold at the right price • distributed at the right place • profitably

BIS, 3rd, sem2, 2012-2013 6

Electronic Business

Examples of e-Marketing• online surveys to conduct market research • web site to display and sell your products • internet advertising to promote your

business • software to collect and analyze your

customer information

BIS, 3rd, sem2, 2012-2013 7

Electronic Business

The Key to successful e-Marketing• The key to successful e-Marketing in today's

business environment is to place your clients in control. Allow them to choose how often and

what type of messages they receive

BIS, 3rd, sem2, 2012-2013 8

Electronic Business

The Key to successful e-Marketing, cont..

• This is commonly referred to as Permission Marketing.

• Your e-Marketing messages and tools should aim to deliver information that the consumer wants - that they perceive to be valuable.

BIS, 3rd, sem2, 2012-2013 9

Electronic Business

Integrating E-marketing Into Your Business • e-Marketing is not an alternative to your

existing Marketing Plan, in fact you may already have a "Marketing Plan" that identifies your marketing objectives, outlines your key strategies designed to achieve those objectives, and guides your daily marketing activities.

BIS, 3rd, sem2, 2012-2013 10

Electronic Business

Integrating E-marketing Into Your Business, cont..

• With e-Marketing you can develop techniques to enhance this existing plan to make your marketing activities more effective (smarter) more efficient (cheaper) and you may even find that you can tap into new markets both locally and overseas.

BIS, 3rd, sem2, 2012-2013 11

Electronic Business

How Would E-marketing Enhance My Existing Marketing Plan

• With the use of internet-based product catalogues you can reduce your printing costs and maintain a higher quality of product information for your customers.

BIS, 3rd, sem2, 2012-2013 12

Electronic Business

How Would E-marketing Enhance My Existing Marketing Plan, cont..

• By utilising marketing information systems you can analyse your sales information to make more informed decisions and customers all over the world can view your products with a website.

BIS, 3rd, sem2, 2012-2013 13

Electronic Business

The main E-Marketing tools• Affiliate Program• Search Engine Optimization• Email Campaigns• Banner Exchange• Business Website• Mobile Phone Marketing

BIS, 3rd, sem2, 2012-2013 14

Electronic Business

The main E-Marketing tools - Affiliate Program

Affiliate marketing is where you refer customers to other businesses via links to their web site from your web site or emails and receive commissions for each customer you refer to the other business.

BIS, 3rd, sem2, 2012-2013 15

Electronic Business

The main E-Marketing tools - Affiliate Program, cont..

Conversely, you can set up your own affiliate marketing program to have other businesses sell your products and services for you by paying them a commission.

BIS, 3rd, sem2, 2012-2013 16

Electronic BusinessThe main E-Marketing tools - Affiliate

Program

BIS, 3rd, sem2, 2012-2013 17

Electronic Business

The main E-Marketing tools- Affiliate Program - Affiliate Types Commission Based (www.Amazon.com )Flat-Fee Based (www.paypal.com)Click-Through Based (www.overture.com )Banner-Impression Based (

www.doubleclick.com)

BIS, 3rd, sem2, 2012-2013 18

http://www.amazon.com/

http://www.paypal.com/

http://www.overture.com/

http://www.doubleclick.com/

Electronic Business

The main E-Marketing tools - Affiliate Program - Affiliate Advantages 1)Increased sales.2)Improves search engine link popularity.3)The Internet becomes your sales team.4)Low operating costs.5)Sites with affiliate programs could be perceived as more significant.

BIS, 3rd, sem2, 2012-2013 19

Electronic Business

The main E-Marketing tools - Affiliate Program - Affiliate Disadvantages

1. Potentially expensive up-front costs.2. Administrative overhead.3. Accounting overhead.4. Some profits go to the affiliate.

BIS, 3rd, sem2, 2012-2013 20

Electronic Business

The main E-Marketing tools - Search Engine Optimization

Search engine optimisation is the process of getting your web site address or URL as close as possible to the top of the search results when someone using the search engines is looking for the products you sell.

BIS, 3rd, sem2, 2012-2013 21

Electronic Business

The main E-Marketing tools - Search Engine Optimization - Search Engine Tips 1. Submit Web site to search engine

(http://google.com/addurl).2. Use keywords in the content near the top of

the document.3. Keywords placed inside clickable link text

ranks higher.BIS, 3rd, sem2, 2012-2013 22

Electronic Business

The main E-Marketing tools - Search Engine Optimization - Search Engine Tips, cont.. 4. Use descriptive Web page titles.5. Use a descriptive URL, for example:

www.webmastercertification.com/webmaster-courses.cfm.

6. Encourage other sites to link to yours. BIS, 3rd, sem2, 2012-2013 23

http://www.webmastercertification.com/webmaster-courses.cfm

http://www.webmastercertification.com/webmaster-courses.cfm

Electronic Business

The main E-Marketing tools - Search Engine Optimization - Click Popularity Search Engines

1) http://www.yahoo.com 2) http://www.google.com 3) http://www.altavista.com 4) http://www.excite.com 5) http://www.lycos.com 6) http://www.msn.com 7) http://www.aol.com 8) http://www.askjeeves.com 9) http://www.nbci.com 10) http://www.iwon.com

BIS, 3rd, sem2, 2012-2013 24

http://www.google.com/

http://www.msn.com/

http://www.nbci.com/

Electronic Business

The main E-Marketing tools - Email Campaigns

Email campaigns are targeted emails that work much like conventional direct mail campaigns. They come in various forms such as direct email, newsletters, newsgroups, and press releases.

BIS, 3rd, sem2, 2012-2013 25

Electronic Business

The main E-Marketing tools - Email Campaigns - newsletters

• Newsletters, in this case, are email messages distributed by a company or organization to an opt-in list on a set schedule. Newsletters typically announce sales, specials, schedules, events, product releases, as well as a payload of useful information that makes the newsletters newsworthy.BIS, 3rd, sem2, 2012-2013 26

Electronic Business

The main E-Marketing tools - Email Campaigns – newsletters

• There are two types of marketing opportunities with newsletters. You can either offer your own newsletter or you can advertise in someone else's newsletter.

BIS, 3rd, sem2, 2012-2013 27

Electronic Business

The main E-Marketing tools - Email Campaigns - Newsgroups

A newsgroup is a kind of electronic bulletin board where people who are interested in like subjects can post and respond to conversational "threads" or topics. There are literally thousands of newsgroups hosted all over the world, and covering every conceivable topic about which humans converse.BIS, 3rd, sem2, 2012-2013 28

Electronic Business

The main E-Marketing tools - Email Campaigns - press releases.

An Internet press release is the same as a traditional press release except it is internet based.

The idea is to send a document to a news provider with the hope they find your document newsworthy enough to publish.

BIS, 3rd, sem2, 2012-2013 29

Electronic Business

The main E-Marketing tools – Email types

o Spam Email oOpt-out Email oOpt-in Email

BIS, 3rd, sem2, 2012-2013 30

Electronic Business

The main E-Marketing tools - Email types - Spam Email

A sharp line divides email marketing from spam. Basically email marketing is solicited email (requested), and spam is non-solicited email (not requested).

BIS, 3rd, sem2, 2012-2013 31

Electronic Business

The main E-Marketing tools - Email typesOpt-out Email • Opt-out email is email sent to target groups

who have shown an interest in a specific topic. Once the email is received, the recipient has the option to "unsubscribe" from receiving further email from you.

BIS, 3rd, sem2, 2012-2013 32

Electronic Business

The main E-Marketing tools - Email typesOpt-out Email , cont..• Opt-out email is considered solicited email

because at some point the recipient filled out a form somewhere that landed them on a list of people who have agreed to receive email.

BIS, 3rd, sem2, 2012-2013 33

Electronic Business

The main E-Marketing tools - Email typesOpt-out Email , cont..

Opt-out email is often mistaken for spam since you don't specifically ask for opt-out email.

BIS, 3rd, sem2, 2012-2013 34

Electronic Business

The main E-Marketing tools - Email typesOpt-in Email• Opt-in email is email that has been specifically

requested. This email approach will be well received by your target audience since they ask you to send it to them.

BIS, 3rd, sem2, 2012-2013 35

Electronic Business

The main E-Marketing tools - Email typesOpt-in Email

• The recipient must explicitly request to be placed on your opt-in list, or you run the risk of looking like a spammer.

BIS, 3rd, sem2, 2012-2013 36

Electronic Business

The main E-Marketing toolsBanner Exchange• A banner advertisement is an image placed at

the top or bottom of a web page, to catch the viewer's eye and possibly prompt them to click on it.

BIS, 3rd, sem2, 2012-2013 37

Electronic Business

The main E-Marketing toolsBanner Exchange, cont..• It can either be static, that is, simply like a

billboard displaying the name of a website, or dynamic, encouraging the user to click on the banner image to be transferred to that website.

BIS, 3rd, sem2, 2012-2013 38

Electronic Business

The main E-Marketing toolsBusiness Website

A company tells customers and potential customers where to find their website on the internet by giving them the address (or URL) of their home page. From the home page, you can get to all the other pages on their site.

BIS, 3rd, sem2, 2012-2013 39

Electronic Business

The main E-Marketing toolsBusiness Website, cont..

Web sites may be very complex and consist of hundreds of pages of information and even provide the ability for your customers to purchase your products on the internet. Alternatively, they can be quite simple, consisting of only a few pages that do little more than inform your customers of your businesses address and contact details. BIS, 3rd, sem2, 2012-2013 40

Electronic Business

The main E-Marketing toolsMobile Phone Marketing

Mobile telephone marketing is the use of mobile phone technologies such as voice, text and multimedia message services to promote products/services to consumers.

BIS, 3rd, sem2, 2012-2013 41

Electronic Business

The main E-Marketing toolsMobile Phone Marketing

Currently, the main mobile telephone technologies used for e-Marketing are:

• Short Message Service (SMS)• Multimedia Messaging Service (MMS)• Wireless Application Protocol (WAP)• General Packet Radio Service (GPRS)

BIS, 3rd, sem2, 2012-2013 42

Electronic Business

eBusiness Seminars (3)1. Eportals

2. epayments

3. CMS

BIS, 3rd, sem2, 2012-2013 43

Electronic Business

Enterprise Resources Planning

(ERP)

BIS, 3rd, sem2, 2012-2013 44

Electronic Business

Enterprise Resources Planning (ERP)

Enterprise resource planning (ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing.

BIS, 3rd, sem2, 2012-2013 45

Electronic Business


An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management (SCM), Financials, Projects, Human Resources and Customer Relationship Management (CRM)

BIS, 3rd, sem2, 2012-2013 46

Electronic Business


An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared.

BIS, 3rd, sem2, 2012-2013 47

Electronic Business


The modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance

BIS, 3rd, sem2, 2012-2013 48

Electronic Business


• Ideally, the data for the various business functions are integrated. In practice the ERP system may comprise a set of discrete applications, each maintaining a discrete data store within one physical database.

BIS, 3rd, sem2, 2012-2013 49

Electronic Business


• The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. Today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization – large or small.BIS, 3rd, sem2, 2012-2013 50

Electronic Business


BIS, 3rd, sem2, 2012-2013 51

Electronic Business

Enterprise Resources Planning (ERP)o ERP system modules

An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:

BIS, 3rd, sem2, 2012-2013 52

Electronic Business

Enterprise Resources Planning (ERP)o ERP system modules

• Manufacturing• Financials• Human Resources• Supply Chain Management (SCM)• Projects• Customer relationship management (CRM)• Data Warehouse

BIS, 3rd, sem2, 2012-2013 53

Electronic BusinessERP system modules

BIS, 3rd, sem2, 2012-2013 5454

Employees

Managers andStakeholders

CentralDatabase

ReportingApplications

HumanResource

ManagementApplications

FinancialApplications

ManufacturingApplications

InventoryAnd SupplyApplications

HumanResource

ManagementApplications

ServiceApplications

Sales andDelivery

ApplicationsSales ForceAnd CustomerService Reps

Customers Back-officeAdministratorsAnd Workers

Suppliers

Electronic Business

Enterprise Resources Planning (ERP)o Main ERP vendors

• Baan• JD Edwards• Oracle• PeopleSoft• SAP

BIS, 3rd, sem2, 2012-2013 55

Electronic BusinessMain ERP vendors

BIS, 3rd, sem2, 2012-2013 56

ERP Vendors Revenue

6.5

0.394

5.6

2.07

0.894

10.86

1.74

0.32

1.02

10.1

0123456789

101112

SAP PeopleSoft Oracle Law son J.D. Edw ards

Bill

ions

of D

olla

rs

20012000

Electronic Business

Enterprise Resources Planning (ERP)o Why ERP

• To integrate financial data.

• To standardize manufacturing processes.

• To standardize HR information.

BIS, 3rd, sem2, 2012-2013 57

Electronic Business

Enterprise Resources Planning (ERP)o ERP Project • Real transformational ERP efforts will usually run

between 1 to 3 years, on average.• Short implementations (3 to 6 months):

– small companies,– implementation limited to a small area of the company, or– the company only used the financial pieces of the ERP system.

• The important thing is not to focus on how long it will take but to understand why you need ERP and how you will use it to improve your business.

BIS, 3rd, sem2, 2012-2013 58

Electronic Business

Enterprise Resources Planning (ERP)o How ERP improve business performance

• Improving integration, flexibility • Fewer errors • Improved speed and efficiency • More complete access to information• Lower total costs in the complete supply chain• Shorten throughput times• Sustained involvement and commitment of the top

managementBIS, 3rd, sem2, 2012-2013 59

Electronic Business

Enterprise Resources Planning (ERP)o How ERP improve business performance, cont..

• Reduce stock to a minimum• Enlarge product assortment• Improve product quality• Provide more reliable delivery dates and higher

service to the customer• Efficiently coordinate global demand, supply and

production

BIS, 3rd, sem2, 2012-2013 60

Electronic Business

Enterprise Resources Planning (ERP)o ERP risks

• Expensive (can costs 100 thousands to millions of dollars)

• Time-consuming (can take months to years)

• Great risk for the organization • Transfer of Knowledge• Acceptance with the company

BIS, 3rd, sem2, 2012-2013 61

Electronic Banking

BIS, 3rd, sem2, 2012-2013 62

Electronic Banking

What is E-banking

Electronic banking, also known as e-banking, virtual banking and online banking, is a service that allows customers to access their bank information, conduct financial transactions, make deposits, withdrawals and pay bills through the Internet without having to physically visit their bank.

BIS, 3rd, sem2, 2012-2013 63

Electronic Banking

What is E-banking

Also, Internet banking (e-banking) is

defined to include the provision of retail and

small value banking products and services

through electronic channels as well as large

value electronic payments and other wholesale

banking services delivered electronically.BIS, 3rd, sem2, 2012-2013 64

Electronic Banking

History The concept of electronic banking

systems began when the first automated teller machines (ATMs) were installed in the 1970s.

ATM machines allowed deposits to be made from remote locations—a convenience for customers who otherwise would have had to withdraw cash personally from their bank.

BIS, 3rd, sem2, 2012-2013 65

Electronic Banking

History, cont..

The advantages offered by ATM machines quickly spilled over to encompass other areas of bank services, computerizing manual systems for greater efficiency and time savings.

BIS, 3rd, sem2, 2012-2013 66

Electronic Banking

History, cont..

The concept behind ATM machines gave rise to smart cards, intranet and Internet banking, EFT (electronic funds transfer) and POS (point of sale) systems, phone banking and other electronic services.

BIS, 3rd, sem2, 2012-2013 67

Electronic Banking

Fundamental characteristics

Traditional Banking

Traditional banking was time-

consuming. A person would have to

physically walk into a bank, fill out a deposit

slip, wait in line and wait some more while the

teller processed his transaction. BIS, 3rd, sem2, 2012-2013 68

Electronic Banking

Fundamental characteristics Electronic Banking Transactions

Electronic banking allows anyone with a telephone, computer or bank card to access his/her account without ever crossing a bank's threshold. Electronic banking includes, among other things, electronic bill pay, funds transfer, balance retrieval and cash advances. It also includes direct deposit.

BIS, 3rd, sem2, 2012-2013 69

Electronic Banking

Levels/Scope of e-banking business

Basic information e-banking

Simple transactional e-banking

Advanced transactional e-banking

BIS, 3rd, sem2, 2012-2013 70

Electronic Banking


Basic information e-banking

Is a web sites that just disseminate

information on banking products and services

offered to bank customers and the general

public;BIS, 3rd, sem2, 2012-2013 71

Electronic Banking


Simple transactional e-bankingIs a web sites that allow bank customers

to submit applications for different services, make queries on their account balances, and submit instructions to the bank, but do no permit any account transfers;

BIS, 3rd, sem2, 2012-2013 72

Electronic Banking


Advanced transactional e-bankingIs a web sites that allow bank customers

to electronically transfer funds to/from their accounts pay bills, and conduct other banking transaction online.

Usually, e-banking refers to types II and III.BIS, 3rd, sem2, 2012-2013 73

Electronic Banking

Current development situations (in industrial countries)

E-banking products and services are

getting more and more advanced and

increasing in variety. From providing

information at the early stage to providing

transactional activities.BIS, 3rd, sem2, 2012-2013 74

Electronic Banking

Current development situations (in industrial countries), cont.. Both volume and share in the total banking

business are getting bigger and bigger very fast

E-banking customer base is getting bigger quickly.

BIS, 3rd, sem2, 2012-2013 75

Electronic Banking

Status in developing countries

Developing countries are:

in catching up in e-banking

BIS, 3rd, sem2, 2012-2013 76

Electronic Banking

Impact of E-banking on traditional banking

• The early conventional wisdom: Internet banking would destroy the traditional banking business model and promote the entry of newcomers from the outside of the banking industry.

BIS, 3rd, sem2, 2012-2013 77

Electronic Banking

Impact of E-banking on traditional banking, cont..• Developing countries could have the

“opportunities to leapfrog” in the adoption of efinance on a large scale.

• In reality, e-banking develops fast, but not damaging as conventional wisdom projected.

BIS, 3rd, sem2, 2012-2013 78

Electronic Banking

Impact of E-banking on traditional banking, cont..

• The notion of leapfrog has not worked in many developing countries due to various impediments.

BIS, 3rd, sem2, 2012-2013 79

Electronic Banking


• already visible, including a high level of acceptance of technology by customers and financial institutions….H(h)owever, most projects have not yet been deployed on a large scale.

BIS, 3rd, sem2, 2012-2013 80

Electronic Banking


• It provides a comprehensive look at the status of efinance in developing countries. It covers arrange of areas related to e-finance including e-banking, e-payments, e-trades, and e-credit information

BIS, 3rd, sem2, 2012-2013 81

Electronic Banking


• Even in industrial countries, e-banking is still a complementary tools to traditional banking. Lots of pure e-banking businesses have been forced out of market.

BIS, 3rd, sem2, 2012-2013 82

Electronic Banking

Impact of E-banking on traditional banking, cont..• Internet-only banks have been substantially

less profitable. They generate lower business volumes and any savings generated by lower physical overheads appear to be offset by other types of non-interest expenditures, notably marketing to attract new customers. BIS, 3rd, sem2, 2012-2013 83

Electronic Banking

• Banking consumers today have more options than ever before:– “brick and mortar” institution

(has a building and personal service representatives)

– “brick and click” institution(physical structure + Internet bank services)

– “Virtual bank”(no public building – exists only online)

BIS, 3rd, sem2, 2012-2013 84

Electronic Banking

• Traditional banking business assumes:

– Customer desk at bank’s building

– Office hours from 8.00 am to 7.00 pm

BIS, 3rd, sem2, 2012-2013 85

Electronic Banking

• Logical solution is to use e-channels:– Internet– WAP based mobile network– Automated telephone– ATM network– SMS and FAX messaging– Multipurpose information kiosks– Web TV and others …

BIS, 3rd, sem2, 2012-2013 86

Electronic Banking

E-channels enable financial transactions from

anywhere and allow non-stop working

time.

Therefore, E-Bank is transforming banking

business into e-Business through utilizing e-

ChannelsBIS, 3rd, sem2, 2012-2013 87

Electronic Banking

BIS, 3rd, sem2, 2012-2013 88

• Customers’ requests are:– Non-stop working time– Using services from

anywhere

• E-channels provide:– Working time 0

- 24h– Great flexibility

Electronic Banking

More E-banking advantages:

• Possibility to extend your market (even out of country)

• Possibility to process more financial transactions

• Possibility to lower your transaction cost

BIS, 3rd, sem2, 2012-2013 89

Electronic Banking

• Electronic Banking Services

Electronic banking services are designed

to provide banking customers with the

capability to conduct banking business

remotely through personal computers and

other electronic devices .BIS, 3rd, sem2, 2012-2013 90

Electronic Banking

Electronic Banking Services• Types of Services

Electronic banking comprises personal

computer (PC) banking through

1. traditional proprietary communication channels

BIS, 3rd, sem2, 2012-2013 91

Electronic Banking

Electronic Banking Services• Types of Services, cont..

2. retail and corporate Internet

banking services,

3. telephone banking, and

4 potentially other forms of remote electronic access to banking services.

BIS, 3rd, sem2, 2012-2013 92

Electronic Banking


While electronic banking services have

been oriented toward retail customers, many

banking organizations are now offering small

business applications and corporate cash

management services via the Internet. BIS, 3rd, sem2, 2012-2013 93

Electronic BankingElectronic Banking Services

• Types of Services, cont..

These services typically include payroll, automated clearing house (ACH), and wire transfers. Wholesale banking services, which have been conducted electronically for many years, are also beginning to move from proprietary networks and communications channels to the Internet.BIS, 3rd, sem2, 2012-2013 94

Electronic Banking


Telephone banking, a fairly conventional form

of electronic banking, is provided by many

institutions. Telephone banking services generally

allow customers to check account balances and

transactions and pay bills through touch-tone or voice

response systems.BIS, 3rd, sem2, 2012-2013 95

Electronic Banking


A few banking organizations are also beginning

to offer consumer products and services through

wireless devices, such as cellular telephones, pagers,

personal digital assistants (PDA), palmtop computers,

or other devices that can provide wireless access to

institution’s services, either directly or via the

Internet. BIS, 3rd, sem2, 2012-2013 96

Electronic Banking

Electronic Banking Services• Operations

There are a variety of operational methods for providing electronic banking services. Banking organizations may perform their core data processing internally but outsource the Internet banking activities to a different vendor or service provider.

BIS, 3rd, sem2, 2012-2013 97

Electronic Banking

Electronic Banking Services• Operations, cont..

A dedicated workstation at the financial institution is often used to transmit transaction data files between the institution’s core processing system and the Internet application, and to allow the financial institution to update parameters and perform other maintenance activity.BIS, 3rd, sem2, 2012-2013 98

Electronic Banking

Electronic Banking Services

• Operations, cont…

Alternatively the Internet banking

service provider may interface directly with

the bank’s core processing service provider if

that function is also outsourced.

BIS, 3rd, sem2, 2012-2013 99

Electronic Banking


• Operations, cont..

In addition, many banking organizations now purchase Internet banking services from their primary core processing service provider, eliminating the need for external data transmissions.

BIS, 3rd, sem2, 2012-2013 100

Electronic Banking



Even with this structure, the institution maintains a local workstation to provide access to customer information or perform other administrative and maintenance functions for the Internet banking system.

BIS, 3rd, sem2, 2012-2013 101

Electronic Banking



Other institutions operate an electronic banking

system in their own computer facilities by purchasing

an “off-the-shelf” or “turnkey” electronic banking

software application from one of the vendors of such

software and installing the software on their own

system.BIS, 3rd, sem2, 2012-2013 102

Electronic Banking


• Operations, cont.

Choices in turnkey options vary from the

bank’s purchase and use of templates or modules,

where the bank chooses from a selection of standard

services, to more complex situations where the

software vendor designs and develops the electronic

banking software application to the bank’s

specifications. BIS, 3rd, sem2, 2012-2013 103

Electronic Banking

E-banking Strategies

BIS, 3rd, sem2, 2012-2013 104

Electronic Banking

• E-banking offers vast opportunities, yet even less than one in three banks have an E-banking strategy in place.

• According to a study, less than 15 percent of banks with transactional websites will realize profits directly attributable to those sites.

BIS, 3rd, sem2, 2012-2013 105

Electronic Banking

• Hence, banks must recognize the seriousness of the challenge ahead and develop a strategy that will enable them to leverage the opportunities presented by the Internet.

• No single E-banking strategy is right for every banking company. But whether they adopt an offensive or a defensive posture, they must constantly re-evaluate their strategy.

BIS, 3rd, sem2, 2012-2013 106

Electronic Banking

• In the fast-paced e-economy, banks have to keep up with the constantly evolving business models and technology innovations of the Internet space. Early e-business adopter like Wells Fargo not only entered the E-banking industry first but also showed flexibility to change as the market developed.

BIS, 3rd, sem2, 2012-2013 107

Electronic Banking

• The pressure is now building for all banks to develop sound e-business strategies that will attract and retain increasingly discriminating customers.

• The major problem with the banks, which have already invested huge amounts in their online initiatives, is that their online offerings remain unprofitable.

BIS, 3rd, sem2, 2012-2013 108

Electronic Banking

• Though banks have enrolled some existing customers in their online programs, they are not getting customers in large numbers. This has made banks wonder whether there is any value in the online channel. Just enrolling customers for online banking may not be sufficient until and unless they use the site actively.

BIS, 3rd, sem2, 2012-2013 109

Electronic Banking

• Banks must make efforts to increase their site usage by customers and effectively co-ordinate the online channel with branches and call centers. Then only they will be able to derive maximum value that includes cost reduction, cross-selling opportunities, and higher customer retention.

BIS, 3rd, sem2, 2012-2013 110

Electronic Banking

• Customers have some rational reasons for staying offline. Some of these reasons include:

usability features of the site,

concerns about security and

frequent complaints that signing up is complicated and time-consuming.

BIS, 3rd, sem2, 2012-2013 111

Electronic Banking

• Banks can solve these problems by refocusing investment on improving the site’s basic functionality and user-friendliness, and avoiding advanced features that most customers neither understand nor value.

BIS, 3rd, sem2, 2012-2013 112

Electronic Banking

• Developing advanced features that appeal to a relatively small numbers of customers, creates far less value than strengthening core capabilities and getting customers to use them. Banks must make efforts to familiarize customers with their sites and show them how easy and efficient the online channel is to use.

BIS, 3rd, sem2, 2012-2013 113

Electronic Banking

• Integrating the online channel with the rest of the bank is another important issue that banks must focus upon. This is important because nearly all the value of the online channel is realized offline _ in cross sales completed in other channels and in cost reductions.

BIS, 3rd, sem2, 2012-2013 114

Electronic Banking

• An actively used online channel should also serve as a medium to sell banking services for the branch staff, the call center, and the relationship manager. Integrated channels working together are far more effective than a group of channels working without any coordination.

BIS, 3rd, sem2, 2012-2013 115

Electronic Banking

• To facilitate this integration, banks must formulate paths that people in various customer segments are likely to take among the channels. The interactions in each channel can then be worked around these paths.

BIS, 3rd, sem2, 2012-2013 116

Electronic Banking

• For example, a call center representative must work out which channel(s) the customer used before coming to her, and which channel(s) the customer is likely to visit next. Each channel must have entry and exit points that must welcome customers and then send to other channels. Hence, the overall goal of banks is to create a seamless multichannel experience.

BIS, 3rd, sem2, 2012-2013 117

Electronic Banking

• On the other hand, those banks that are planning to build their online businesses will have to understand several strategic issues like do they have the right business model for E-banking? How should they price their E-banking products and services?

BIS, 3rd, sem2, 2012-2013 118

Electronic Banking

• Bankers planning to move into E-banking have to explore different options, make investments and have to develop a variety of partnerships. They have to put their time and efforts to identify the best opportunities. In the case of traditional banks, if they are too aggressive in using price incentives to build their e-business, they risk the profitability of their traditional business.

BIS, 3rd, sem2, 2012-2013 119

Electronic Banking

• However, if they do not offer sufficient price incentives for customers to bank online, their efforts to build a sound e- banking business may not fructify.

BIS, 3rd, sem2, 2012-2013 120

Electronic Banking

• Banks have to be creative in rethinking organizational structures and management processes. Traditional banks that are conservative in nature may find it difficult to attract and retain online talent.

BIS, 3rd, sem2, 2012-2013 121

Electronic Banking

• Moreover, getting people in the traditional business to help build an e-enterprise would not be an easy task. To make all this happen, requires a major revision of incentive systems, planning and budgeting processes, and management roles. Banks can exploit the opportunities provided by the Internet if they demonstrate courage, use their imagination, and take decisive action.BIS, 3rd, sem2, 2012-2013 122

Electronic Banking

• While most of the banks have started focusing on E-banking activities, a new challenge in the form of mobile banking has emerged. M-Banking is both an additional opportunity for banks to offer their online services and an additional channel from which to access new customers and cross-sell to existing customers.

BIS, 3rd, sem2, 2012-2013 123

Electronic Banking

• Rapidly changing lifestyles of customers and their demand for more speed and convenience has subdued the role of branch banking to a certain extent. With the proliferation of new technologies, disintermediation of traditional channels is being witnessed.

BIS, 3rd, sem2, 2012-2013 124

Electronic Banking

• Banks can go beyond their traditional role as a channel for banking/financial services and can become providers of personalized information. They can successfully leverage m-banking to:

BIS, 3rd, sem2, 2012-2013 125

Electronic Banking

• Provide personalized products and services to specific customers and thus increase customer loyalty.

• Exploit additional sources of revenue from subscriptions, transactions and third-party referrals.

BIS, 3rd, sem2, 2012-2013 126

Electronic Banking

• M-Banking gives banks the opportunity to significantly expand their customer relationships provided they position themselves effectively. To leverage these opportunities, they must form structured alliances with service affiliates, and acquire competitive advantage in collecting, processing and deploying customer information.BIS, 3rd, sem2, 2012-2013 127

Electronic Banking

BIS, 3rd, sem2, 2012-2013 128

E-Banking &

Customer Relationship

Electronic Banking

• E-Banking and Customer Relationship

BIS, 3rd, sem2, 2012-2013 129

Electronic Banking

CRM - A powerful Tool for Customers Relations

• Help to exploit sales potentials and maximize the value of the customer to the bank.

• CRM integrates various components of a business such as sales, marketing, IT and accounting.

BIS, 3rd, sem2, 2012-2013 130

Electronic Banking

CRM - A powerful Tool for Customers Relations, cont..

• It will add customer loyalty to the business.

• Relatively new method in managing customer loyalty, previously used by retail businesses for many years

BIS, 3rd, sem2, 2012-2013 131

Electronic Banking

CRM - A powerful Tool for Customers Relations, cont..

• The core objective of modern CRM methodology is to help business to use technology and human resource to gain abetter view of customer behavior

BIS, 3rd, sem2, 2012-2013 132

Electronic Banking

Objective of CRM in BankMain objectives to implement CRM in

the business strategy are:• To simplify marketing and sales process• To make call centers more efficient• To provide better customer service• To discover new customers and increase

customer revenues• To cross sell products more effectively

BIS, 3rd, sem2, 2012-2013 133

Electronic Banking

BIS, 3rd, sem2, 2012-2013 134

Electronic Banking

BIS, 3rd, sem2, 2012-2013 135

Electronic Banking

BIS, 3rd, sem2, 2012-2013 136

Electronic Banking

BIS, 3rd, sem2, 2012-2013 137

CRM implementation strategy

Electronic Banking

BIS, 3rd, sem2, 2012-2013 138

Electronic Banking

BIS, 3rd, sem2, 2012-2013 139