Electronic commerce and the marketing of Internet banking in the UK
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Robert Hamilton is a lecturer in Economics and Banking at the Loughborough University Business School. Prior to joining Loughborough University in 1990 he was a research associate at Edinburgh University working in the area of credit scoring and credit control. His current research interests remain in this area as well as strategies and consumer behaviour in retail banking, including e-commerce.
Paul Hewer is a lecturer in Marketing in the Department of Marketing at Stirling University. He is currently examining consumer behaviour in the delivery of financial services.
Abstract Recent market research findings and financial services consultants’ reports have signalled that electronic commerce will play an increasingly important role in consumers’ future financial lives. This paper discusses such evidence and seeks to contextualise the debate on the future of banking through a discussion of consumers’ financial behaviour, the UK Government’s position and an analysis of UK financial providers’ current marketing of Internet banking services to consumers. Keywords Electronic commerce, financial services, Internet banking, marketing, consumer behaviour
INTRODUCTION
Robert Hamilton Business School, Longhborough University, Ashley Road, Longhborough LE11 3TU. Tel: 01509 263171 Fax: 01509 223962 E-mail: [email protected]
Recent evidence suggests that electronic commerce will play an increasingly important role in terms of how consumers acquire and maintain products and services, including financial products, in their daily lives in the next five to ten years.1 This paper seeks to explore the factors affecting this push towards Internet provision, and is achieved through an analysis of market research data and consultants’ reports on Internet banking. These findings are contextualised through a discussion of the governmental position on electronic commerce and a study of consumers’ behaviour with respect to new delivery channels. Finally an examination is
# Henry Stewart Publications 1363-0539 (2000)
Vol. 5, 2, 135–149
provided of the services UK financial providers are currently retailing through the Internet and on what bases these services have been marketed to consumers. THE SCOPE OF ELECTRONIC COMMERCE The US Department of Commerce suggests that ‘electronic commerce’ includes ‘all forms of business transactions, such as the purchase of goods or services, undertaken through electronic means, such as telephones, televisions, computers, and the Internet’.2 Using this definition the magnitude of electronic commerce, both current and potential, starts to be appreciated, as every time a consumer uses
Journal of Financial Services Marketing
135
Hamilton and Hewer
an ATM, purchases goods or services with a credit or debit card, or orders a service over the telephone, they are arguably participating in the world of electronic commerce. Electronic commerce is considered to include four principal delivery channels: ATMs, the telephone, PC and the Internet.3 However, recent developments in the area of digital tele
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