World’s Best Internet Banks Part II

BANKS DEVELOP SOCIAL SKILLS

In the second of a two-part series, Global Finance identifies the best global and regional Internet banks.

By Adam Rombel

Not many of the headlines about the global banking industry in the past year have been about excellence and innovation. Instead, talk of the credit crunch, the recession, bad assets, bank bailouts, shrinking budgets and excessive executive compensation has predominated.

In the Internet banking space, the story is very different. The winners of this year’s Best Internet Bank awards are adapting to the rapid evolution of the Internet by developing winning applications, services and business models to satisfy customer demands and beat the competition.

In short, Global Finance is recognizing the banks that are prospering and advancing online despite difficult times. Financial institutions such as Banamex, Banco Santander, Citi, GarantiBank, HSBC, ICBC, Swedbank and Wells Fargo are using the Internet to convert existing clients into more profitable online customers, to enhance efficiency in product delivery and to improve customer service and client loyalty. The web is also central to these banks’ efforts to enter new markets, find new customers, increase payment and trading revenue and adapt to changing customer preferences.

Rajesh Menon, a partner in the banking and capital markets practice of Infosys Consulting, says the best Internet banks will see a large percentage of customers adopting and using online channels, and the bank’s customers will maintain confidence in Internet banking amid fears about fraud and identity theft. According to Menon, a successful Internet bank will have the trust of clients in carrying out a larger share of their transactions through the web, will offer its traditional products through the online channel—providing the same or better customer experience online compared to the branch—and will achieve cost reductions through the adoption of the online channel.

These attributes were among the criteria the awards judging panel, led by Infosys, used to select the winning banks. In addition, the judging panel looked at the breadth of online products and services offered, website design and functionality and the integration of Internet banking products and services.

Citi was named the overall global winner and the winner among corporate/institutional banks globally and took home seven regional and sub-category honors. The bank’s CitiDirect service garnered particular praise for its rich features, which include customizable reporting applications, a four-tiered security process, cash-flow planning and forecasting capabilities and an end-to-end trade solution on one secure platform that is available 24 hours a day from anywhere in the world. It also facilitates aggregation and visibility at the local, regional and global levels.

HSBC was selected as the world’s best consumer Internet bank and won six global sub-categories and three regional awards. Its HSBC Premier service provides access to clients in more than 40 countries. Account balances in different countries are consolidated into a convenient one-page view for customers. Customers can also transfer funds between their HSBC accounts anywhere in the world in multiple currencies in near real-time at no cost, according to Menon. He called HSBC Premier a “first-in-market, unique online banking service.”

Two-Way Traffic

The online banking industry is on the cusp of a major transition that will enable the Internet to continue to transform the way clients do their banking, according to Menon and other consultants. This transformation’s key components include banks incorporating social media applications and forums into their Internet banking sites and services.

Celent, a Boston–based financial research and consulting firm, predicts banks’ participation in social media will “skyrocket over the next 12 months.” In a new report, entitled “Demystifying Social Media and Next-Generation Online Banking,” Celent asserts that banks must have a social media strategy and must integrate it into all of their online sites, day-to-day activities and customer relationships.

“Banks can even go the extra mile and build their own user communities and allow users to rank web pages, products and services. These seem like add-ons today but are quickly becoming critical components of the web,” Celent adds. “The days of pushing data and information out to the consumer are over. It’s now a two-way street, and banks should capitalize on the stream of data.”