It is a fundamental truth of the Information Age: Financial services companies that provide valuable information electronically to customers and prospects are able to retain and attract assets. The problem: Most banks, weak in both the content department and in ferreting out new, untraditional partners, are struggling with how to develop "customer-centric" businesses.
The key objective is to leverage the strength of a software company's generic content and build a solution that further delivers on banks' specific financial expertise. "That's an opportunity," says Lewis Levin, vp of Microsoft Corp.'s financial desktop division, responsible for Microsoft Money, Investor, Marble and the Microsoft-First Data Corp. payments venture.
Levin contends that banks can do just that by working with Microsoft to deliver critical information to customers. "PaineWebber is using Marble to develop their Web site. They believe they have some good proprietary research supporting an approach to asset allocation. And that's what they try to offer their customers. They learn enough about the individual customer's situation and then they keep tracking that over time to suggest things that that customer should do."
But many bankers are wary of information providers like Microsoft because their "generic" sites are not only leaps and bounds beyond what banks currently offer, but also because its breadth of services extends beyond financial services. Levin scoffs at the notion that Microsoft places a limitation on banks' relationships with their customers by becoming the central access point to the Web and creating a general context in which consumers view the world. "It's a shame that they're saying that because they are belittling their own capabilities. Financial institutions do more than the transaction. There is this notion of a custodial relationship of (customer) assets or debt and there is an opportunity for the financial institution to propose or suggest things for a customer and do more than is asked."
Levin also takes issue with those who contend that banks need to be the ones providing consumers with all of the information and content they require to make key decisions, such that consumers rely on their banks to be information context providers. "That's suggesting that banks get into our business," says Levin, recommending that banks focus on their core competencies and private label basic Web capabilities from companies like Microsoft, whose core competencies are the generation and dissemination of compelling content. "Most Schwab customers don't sit there and say, 'Gee, there are probably 15 different ways I can do on-line trading,' because they are getting something else from Charles Schwab, and they want the whole package."
Nevertheless, bankers argue, Microsoft is forever instantiating itself in the financial services business. And products like Microsoft Investor, they say, need only use intelligent agent and push technology to become financial advisory services, notifying consumers through targeted content when it's a good time to buy or sell stocks. Levin strongly disagrees, "That's tantamount to hoping that none of your customers read The Wall Street Journal, because while The Wall Street Journal is not an investment newsletter by any stretch, in section C, there are columnists that prognosticate about whether certain companies represent good investments or not."
-bers tfn.com
