Description
Technological advances and more specifically e-commerce have affected consumer behaviour patterns. These changes have significantly affected the Financial Services industry. This paper is about Alpha Bank, a major Greek Financial Institution and the e-banking services it offers. A primary research has been made (questionnaires) in order to determine e-customers opinions and characteristics.
Chapter 1
The characteristics of the electronic customers of Alpha Bank as opposed to traditional customers
According to a survey that has been conducted in order to find the opinion and generally the characteristics of e-banking services consumers it has been found out that almost 80% of the users are males between 35 and 44 years old and that the browsing location of most of them is work related. Another interesting finding was that the percentage of those that had an education (College and graduate school) is above 30%, which is an extremely low percentage taking to consideration other European countries such as Sweden and Finland where the percentage is higher (Suominen, 2001). In the other hand now, traditional banking methods customers are those who prefer to visit a branch for reasons such as security and ease of use. This segment of customers is mainly of older age and not familiar with the e-banking system (Centeno, 2003)
Chapter 2
The main factors (motivators) that influence consumers to visit their web-site and buy its offerings Currently, e-banking services are moving from being a supplementary service to a service that is unthinkable of a bank not to offer it. Although that the penetration rates are at the moment significantly low, this trend is expected to continue having as a result the rapid, massive spread of e-banking services and the extinction of the traditional banks. A high percentage of consumers, use internet and e-banking services as an additional canal and continue to use traditional methods of banking such as visits to branches and telephone banking. This has been also noticed even to more technological advanced countries like Sweden and Finland. For example, 60% of the e-banking services users of these two Nordic countries are still using branches and telephone banking services for selling and financial information issues. (e-business W@tch, 2003). There are many factors that a consumer prefers to use the e-banking services rather than the traditional one. First of all, at any time, the consumer can retrieve information about any product or service that a specific bank offers free of charge and without having to wait in the line. It is often observed the fact that banks are making special offers or they are implementing favorable terms when providing an e-banking service, which itself is very likely to attract a good proportion of new customers that are looking for specific offers. Second, one of the most important motivator that influences a consumer in order to use an e-banking service is that he saves significant amount of time because the transactions are being made electronically without having to go to the nearest branch, and of course to avoid bureaucracy and queuing (Mattila et al., 2002). Consumers (Businesses and Individuals) are having a great benefit from the ebanking services because they are being provided with the ability to do a big amount of their transactions with the bank easily, securely and quickly 24 hours a day, 365 days a year. For the Small and Medium Enterprises, the motivators are
even greater because their operating expenses are constantly being reduced and the extensive use of supplies (energy, paper, ink) is getting even lower. Moreover, the risk of losing money during the transportation (from and to the bank) or to be a robbery victim is also getting extinct. These advantages are having to do mainly with cost reduction. Electronic transactions are easily made through a computer (Gounari, 2009). Most of the services that are offered online are information for the person·s accounts, money transfer and the ability to pay bills and credit cards. Recently, the option to pay the VAT through e-banking services was given but only to those who submit their tax return with the same way (online). It should also be pointed that in many banking transactions, such as loans, the physical signature of the client is required in order to proceed so those services could not yet be offered online (Alpha Bank, 2010) Some other strong motivators are that the consumer will avoid the fees that banks charge to transactions being made in the branches. An indicative example is that the average fee that a bank charges for transactions made through its branches is between 1 and 1.5½. Furthermore, there is no geographical restriction to the services that are offered through e-banking, meaning that customers can access and interact with the bank of their choice from anywhere in the world with the only presupposition to have access to the Web. Therefore, the new alternative distribution channel removes the borders and eliminates the distances. To summarize, the motivators that influence consumers
to use e-banking services are:
1. The visits to a physical branch or an ATM is significantly minimized, therefore, time and energy is saved 2. Consumers can process the daily transactions with public and private services faster 3. No additional charges or fees incur for electronic transactions (this factor is highly depending on the charging policy of each bank. Alpha Bank, charges 0.30½ for each interbank transactions and
0.50½ for transactions with foreign banks, amount which is significantly lower in comparison to physical banking.) 4. E-banking services provide a wider image of customer·s account having as a result the easiest management of it. 5. E-banking services are giving the ability to the customer to access his or her account 24 hours a day, 365 days a year.
Chapter 3
The main criteria used by customers to evaluate their virtual shopping experience In a study made by O·Guinn and Faber (1989) it has been stated that consumers suffering from the compulsive buying disorder, often, they feel guilt, regret and shame because of their attitude of buying products more frequent than normal. Because of that, people who are compulsive buyers may not want their family members or their friends to see what and how often they buy products. Furthermore, they may also fear the instant identification by sales employees that labels them as everyday buyers (Lee, Lennon, and Rudd 2000). In comparison to a traditional shop, those buyers can buy what they want and how often they want avoiding face to face contact and social interactions (Alba et al. 1997). Another criterion that consumers use in order to evaluate their e-shopping experience is that internet offers huge amount of information that it can be used in such way that the choice of the product or the service that consumers want to purchase is made much more easier. In real life, when someone wishes to compare between given prices and variety has to visit a high number of brick-and-mortar shops having as a result to spend valuable resources such as energy and time (Alba et al. 1997; Bakos 1997; Smith 2002).
Chapter 4
Based on the above what additional marketing strategies would you recommend to the institution so as to improve further the e-customer shopping experience, increase cross-selling opportunities and boost customer positive word of mouth? Having in mind the factors that they have been analyzed fully in the previous chapters and according to customer·s opinion, Alpha Bank should consider the fact that marketing plays a significant role in promoting companies and services. Web marketing and social media marketing are nowadays, a great tool that marketiers can use in order to attract new customers. Alpha Bank should try to attract users of younger age who prefer to buy online. For example, Bank of Piraeus has developed a card that functions as a visa card. Users can ´chargeµ their card with the required amount (e.g. 10, 20 or 50½) and spend that amount in e-shopping. It is not required for the user to have a Piraeus Bank account, so the issuing of the card takes only 1 day. In the case of positive word of mouth, Alpha Bank should make a forum where experienced personnel can answer questions and solve problems of the clients, 24 hours a day, 365 days a year.
Conclusion
Having done an analysis and a survey in order to find out what Alpha Banks ebanking customers opinion is, the result was that most of them would recommend the specific bank to friends and colleagues because of the safety they feel and the ease of use of the website. Alpha Bank should consider expanding more their operations in that kind of services and to try to attract customers of younger age as it has mentioned above.
doc_684451464.docx
Technological advances and more specifically e-commerce have affected consumer behaviour patterns. These changes have significantly affected the Financial Services industry. This paper is about Alpha Bank, a major Greek Financial Institution and the e-banking services it offers. A primary research has been made (questionnaires) in order to determine e-customers opinions and characteristics.
Chapter 1
The characteristics of the electronic customers of Alpha Bank as opposed to traditional customers
According to a survey that has been conducted in order to find the opinion and generally the characteristics of e-banking services consumers it has been found out that almost 80% of the users are males between 35 and 44 years old and that the browsing location of most of them is work related. Another interesting finding was that the percentage of those that had an education (College and graduate school) is above 30%, which is an extremely low percentage taking to consideration other European countries such as Sweden and Finland where the percentage is higher (Suominen, 2001). In the other hand now, traditional banking methods customers are those who prefer to visit a branch for reasons such as security and ease of use. This segment of customers is mainly of older age and not familiar with the e-banking system (Centeno, 2003)
Chapter 2
The main factors (motivators) that influence consumers to visit their web-site and buy its offerings Currently, e-banking services are moving from being a supplementary service to a service that is unthinkable of a bank not to offer it. Although that the penetration rates are at the moment significantly low, this trend is expected to continue having as a result the rapid, massive spread of e-banking services and the extinction of the traditional banks. A high percentage of consumers, use internet and e-banking services as an additional canal and continue to use traditional methods of banking such as visits to branches and telephone banking. This has been also noticed even to more technological advanced countries like Sweden and Finland. For example, 60% of the e-banking services users of these two Nordic countries are still using branches and telephone banking services for selling and financial information issues. (e-business W@tch, 2003). There are many factors that a consumer prefers to use the e-banking services rather than the traditional one. First of all, at any time, the consumer can retrieve information about any product or service that a specific bank offers free of charge and without having to wait in the line. It is often observed the fact that banks are making special offers or they are implementing favorable terms when providing an e-banking service, which itself is very likely to attract a good proportion of new customers that are looking for specific offers. Second, one of the most important motivator that influences a consumer in order to use an e-banking service is that he saves significant amount of time because the transactions are being made electronically without having to go to the nearest branch, and of course to avoid bureaucracy and queuing (Mattila et al., 2002). Consumers (Businesses and Individuals) are having a great benefit from the ebanking services because they are being provided with the ability to do a big amount of their transactions with the bank easily, securely and quickly 24 hours a day, 365 days a year. For the Small and Medium Enterprises, the motivators are
even greater because their operating expenses are constantly being reduced and the extensive use of supplies (energy, paper, ink) is getting even lower. Moreover, the risk of losing money during the transportation (from and to the bank) or to be a robbery victim is also getting extinct. These advantages are having to do mainly with cost reduction. Electronic transactions are easily made through a computer (Gounari, 2009). Most of the services that are offered online are information for the person·s accounts, money transfer and the ability to pay bills and credit cards. Recently, the option to pay the VAT through e-banking services was given but only to those who submit their tax return with the same way (online). It should also be pointed that in many banking transactions, such as loans, the physical signature of the client is required in order to proceed so those services could not yet be offered online (Alpha Bank, 2010) Some other strong motivators are that the consumer will avoid the fees that banks charge to transactions being made in the branches. An indicative example is that the average fee that a bank charges for transactions made through its branches is between 1 and 1.5½. Furthermore, there is no geographical restriction to the services that are offered through e-banking, meaning that customers can access and interact with the bank of their choice from anywhere in the world with the only presupposition to have access to the Web. Therefore, the new alternative distribution channel removes the borders and eliminates the distances. To summarize, the motivators that influence consumers
to use e-banking services are:
1. The visits to a physical branch or an ATM is significantly minimized, therefore, time and energy is saved 2. Consumers can process the daily transactions with public and private services faster 3. No additional charges or fees incur for electronic transactions (this factor is highly depending on the charging policy of each bank. Alpha Bank, charges 0.30½ for each interbank transactions and
0.50½ for transactions with foreign banks, amount which is significantly lower in comparison to physical banking.) 4. E-banking services provide a wider image of customer·s account having as a result the easiest management of it. 5. E-banking services are giving the ability to the customer to access his or her account 24 hours a day, 365 days a year.
Chapter 3
The main criteria used by customers to evaluate their virtual shopping experience In a study made by O·Guinn and Faber (1989) it has been stated that consumers suffering from the compulsive buying disorder, often, they feel guilt, regret and shame because of their attitude of buying products more frequent than normal. Because of that, people who are compulsive buyers may not want their family members or their friends to see what and how often they buy products. Furthermore, they may also fear the instant identification by sales employees that labels them as everyday buyers (Lee, Lennon, and Rudd 2000). In comparison to a traditional shop, those buyers can buy what they want and how often they want avoiding face to face contact and social interactions (Alba et al. 1997). Another criterion that consumers use in order to evaluate their e-shopping experience is that internet offers huge amount of information that it can be used in such way that the choice of the product or the service that consumers want to purchase is made much more easier. In real life, when someone wishes to compare between given prices and variety has to visit a high number of brick-and-mortar shops having as a result to spend valuable resources such as energy and time (Alba et al. 1997; Bakos 1997; Smith 2002).
Chapter 4
Based on the above what additional marketing strategies would you recommend to the institution so as to improve further the e-customer shopping experience, increase cross-selling opportunities and boost customer positive word of mouth? Having in mind the factors that they have been analyzed fully in the previous chapters and according to customer·s opinion, Alpha Bank should consider the fact that marketing plays a significant role in promoting companies and services. Web marketing and social media marketing are nowadays, a great tool that marketiers can use in order to attract new customers. Alpha Bank should try to attract users of younger age who prefer to buy online. For example, Bank of Piraeus has developed a card that functions as a visa card. Users can ´chargeµ their card with the required amount (e.g. 10, 20 or 50½) and spend that amount in e-shopping. It is not required for the user to have a Piraeus Bank account, so the issuing of the card takes only 1 day. In the case of positive word of mouth, Alpha Bank should make a forum where experienced personnel can answer questions and solve problems of the clients, 24 hours a day, 365 days a year.
Conclusion
Having done an analysis and a survey in order to find out what Alpha Banks ebanking customers opinion is, the result was that most of them would recommend the specific bank to friends and colleagues because of the safety they feel and the ease of use of the website. Alpha Bank should consider expanding more their operations in that kind of services and to try to attract customers of younger age as it has mentioned above.
doc_684451464.docx