Web 2.0 and Retail Banking: Less Hype Equals Opportunity

November 14, 2008

Abstract

San Francisco, CA, USA November 14, 2008

Web 2.0 is one of the most misused and abused terms in business today. While consumer expectations advance at a fast pace, a gap between consumer expectations and bank delivery grows. Without a change in strategy, this delivery gap will widen and threaten the bottom line.

Web 2.0 has become a catch-all phrase for anything new on the Internet, or any new technological innovation. Celent defines Web 2.0 as the tipping point in the evolution of the Internet, where consumer behavior and its enabling technology emphasize the Internet user experience and capabilities as engaging, interactive, and collaborative. Web 2.0 represents a departure from the Internet’s legacy of one-way communication and static, disaggregated data.

In a new report, Web 2.0 and Retail Banking: Less Hype Equals Opportunity, Celent seeks to demystify Web 2.0 and remove any lingering hype, while providing a lens through which to view new retail banking opportunities. Key discussion areas include:

  • Web 2.0 is not a specific technology; rather it is a shift in consumer behavior (largely online) and the technology supporting it.
  • Maintaining and growing customer relationships will require an understanding of why and how consumer expectations and behavior have changed.
  • A gap between traditional banking services and the expectations of post-Web 2.0 consumers is significant and grows every year.
  • Though some banks will not change for some time, those that respond with evolved product and service offerings will see the greatest returns.
  • Closing the gap between an evolving consumer and the traditional bank will require a significant shift in products, services, marketing, and sales methodologies. It may take years to achieve.
  • A handful of banks and bank providers are just beginning to change their ways, creating a significant opportunity for banks willing to look at the business in a new way.

"By understanding the experiential aspects of Web 2.0, banks can better comprehend the evolving expectations of consumers, both online and offline," says Celent senior analyst Edward Woods, author of the report. "This understanding will put banks in a position to retain and deepen relationships with existing customers as well as establish ties with the next generation."

The report begins by exploring the experiential and technology themes of Web 2.0 and establishing a case for banks to take Web 2.0 seriously. It then looks at how these themes relate to banking. The report uses examples from other online experiences and examines the challenges banks must overcome to realize the potential of Web 2.0. The final section provides insights into what banks will see in the near future, as the Internet evolves and banks and their near-bank competitors battle to serve the financial services needs of the US consumer.

The report is 62 pages long. A table of contents is available online.

of Celent's Retail and Business Banking research service can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

San Francisco, CA, USA November 14, 2008

Web 2.0 and Retail Banking: Less Hype Equals Opportunity

 

Executive Summary 3
Web 2.0 Was a Wakeup Call 6
  What Web 2.0 Isn't 7
  Origins of the Web 2.0 User Experience and Technology 8
  Looking at the Experiential Side of Web 2.0 9
  Enabling Technologies of Web 2.0 11
  The Bank's Challenge Harnessing Web 2.0 13
Making Web 2.0 Pay 17
  No Time Like the Present 17
  More Focus Required for GenX and GenY 20
  Online Banking Needs to Be Recalibrated 23
  Marketing and Selling Get More Personal 27
  The World Has Gone Social 28
The Future of Web 2.0 Thinking and Banks 35
  From Whence Will Online Banking Leadership Come? 35
  Expectations on the Horizon 36
  Social Networks Will Touch Online Banking 38
  Monitoring Practices Will Emerge 39
  The Vendor Community Will Increase Competitiveness 41
  Online PFM Providers Will Expand Offerings or Flounder 45
  Current and Next-Generation Tools 49
  Online Banking Investments Will Be Leveraged in Other Channels 50
  Aggregation Will Make a Comeback 50
  The Commercial Reality of the Internnet Will Become More Apparent 51
  Consumer Frustration with Internet Advertising Will Increase 53
  The Truth is Even Scarier New Leaders Will Emerge -- PNC Bank's Virtual Wallet 54
Conclusion 58

 

Sign in to download reports and access personalized information