IDC, the Framingham, MA-based Internet consulting firm, recently surveyed 600 U.S. executives, 100 of whom were from financial institutions with an online presence.

Each of the 600 responded to 120 questions about their online operations. IDC pooled all answers to create a "benchmark analysis" of the industry, and found that financial institutions "lead the general online business population" in providing interactive customer support and personalized and specialized content. IDC also says that financial institutions have been the most aggressive in developing non-PC and wireless services, and may serve as a model for other Web businesses.

"This is really unusual for financial institutions, " says Ian Rubin, director of IDC's Online Financial Services Advisory programs, and lead analyst for the ePanel. "Online financial institutions are becoming more advanced and sophisticated, which goes against a once-common perception that they were lagging behind with their technology investments."

Rubin says financial institutions have excelled in offering more personalized online services. "Financial institutions are very advanced in how they sell products on their Web sites," he says.

By creating customer records and noting varying preferences, financial institutions attempt to target the needs of their customers, instead of randomly pushing products, Rubin adds.

And according to the Internet Executive ePanel, such innovations have paid off.

Financial institutions "clearly attributed greater importance to personalization strategies than did the general panel," the report says. IDC estimates that slightly over half of online sales in 2000 were made to consumers who personalized sites themselves. They developed "relationships," as IDC puts it, with Web sites, allowing for seemingly customized product-pushing. In 2001, the number of sales sprouting from personalization is expected to increase to greater than 60%.

When it asked about the percentage of Internet sales made to customers with established relationships with the Web site, IDC discovered that financial institutions lead the pack.

Customers who visited a Web site at least once, Rubin says, are more likely to buy a product at a financial institution's Internet site because they are likely to receive more relevant offers.

The IDC report also showed that financial institutions have been successful in integrating their Web sites with customer relationship management technologies and customer service. If banks wish to offer more complex solutions online, the IDC feels that financial institutions "will need to continue investing in technologies that provide intuitive product information and sufficient support to online customers."

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