Magazine article The Journal of Lending & Credit Risk Management

Most Financial Service Organizations Don't Recognize the Importance of E-Business, Study Says

Magazine article The Journal of Lending & Credit Risk Management

Most Financial Service Organizations Don't Recognize the Importance of E-Business, Study Says

Article excerpt

The majority of global financial services organizations have failed to recognize the importance of eBusiness, according to a recent study by Arthur Andersen. Entitled Thriving in the New Economy: Perception vs. Reality, the study explores the rationale for a persistent gap between the industry's acknowledgment of the power of eBusiness and its preparedness to invest in developing eBusiness solutions.

Between September and November 1999, Arthur Andersen conducted 200 interviews with financial services organizations (banks, asset managers and insurers) in North America, South America, Europe, and Asia. Of the organizations questioned, 80% expressed concerns about customer perception of security, and 72% expressed concerns about the potential cost of making the wrong decisions. Two-thirds of organizations were concerned about the ability of their human resources to support e-strategy.

Almost half of the organizations questioned believe customer acceptance to be the key driver in the use of eBusiness for financial transactions, rather than reduced access costs and increased transaction security, cited by one in four. Only 9% saw increased customer dialogue and customer service as drivers.

Despite their own caution, respondents were enthusiastic about the Internet generating significant levels of growth in the coming years, while accepting its potential impact on existing channels and structures.

More information about the study is available on Arthur Andersen's Web site, www.arthurandersen.com.

Fight Predatory Lenders

The most important place to fight predatory lenders is in the marketplace, and the weapon to combat them is "responsible competition," said Ellen Seidman, director of the Office of Thrift Supervision. "It's a fight we can win, and one that our communities can't afford to lose."

In a speech to the Neighborhood Reinvestment Training Institute in Atlanta, Seidman said, "One of the reasons predatory lenders are so successful is the absence of competition. …

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