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2003 | Buch

Introduction Kapitel lesen Erstes Kapitel lesen

New Strategies for Financial Services Firms

The Life-Cycle-Solution Approach

verfasst von: Dr. Dennis Kundisch

Verlag: Physica-Verlag HD

Buchreihe : Information Age Economy

Enthalten in: Professional Book Archive

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Über dieses Buch

The theme of this book "New strategies for financial services providers" is an equally relevant and important topic in science and practice. In the (post) informa­ tion age economy, the German financial services market and many big financial services providers are in a deep crisis. Increasing competition due to deregulation and improved transparency through new means of communication on the one hand, and empowered customers demanding individualized solutions for their fi­ nancial problems e. g. because of new working circumstances, increase the pres­ sure on the market participants to alter their strategies according to these new challenges. Many firms have reacted defensively either by merging in the hopes of realizing scale effects - a high-risk venture considering the last few years - or by adapting "me-too-strategies" (also known as "lemming-banking") that do not provide for a sustainable competitive advantage. Based on a profound analysis of developing mega-trends in the years ahead, es­ pecially in information and IT-intense market, Dr. Kundisch develops a new anti­ cyclical strategy that aims at using IT as an enabler to strengthen customer rela­ tionships and focus on individualized solutions wherever it seems economically sound to do so. However, he does not stop after the development of the strategy, but provides two important concepts that may help turn this vision and strategy into reality. Thus, he favorably and refreshingly differentiates against many contributions that stop at the fairly abstract strategic level.

Inhaltsverzeichnis

Frontmatter
1. Introduction
Abstract
Big German financial services providers all seem to share the same problem: They have hundreds of thousands of private customers but they are not able to leverage that customer base and make money with them. This problem is not new, though. (Rolfes et al. 1997) titled back in 1997 “The business with the private customer — The Achilles’ heel of German credit institutions”, emphasizing the problems that would arise due to foreseeable fundamental structural changes in that business. And in fact these structural changes took place and overall the profit contribution of the business with private customers in the financial services market has suffered heavily in recent years. Fig. 1 exemplarily shows the cost-income-ratio for different group divisions and for the corporate divisions within the group division “Private Clients and Asset Management” for Deutsche Bank AG between 1999 and 2001.
Dennis Kundisch
2. Definitions
Abstract
In this chapter, the basic technical terms that will be widely used throughout the book will be defined. As was already made clear in the introduction, this book is about the B2C financial services market. Therefore, products and services that are produced and marketed in this industry first have to be described in more detail. Next, the organizational settings for production and marketing of these products and services have to be defined. Finally, a customer problem is the issue of interest.
Dennis Kundisch
3. Mega Trends in the Financial Services Industry
Abstract
Even after the dramatic fallback of the worldwide stock markets — particularly in the high-tech sector — the fast evolving IT-development remains the most important driver of structural change in the financial services industry. Fig. 5 provides a quick overview of the development of important German and international stock markets in the last two years. Particularly shares of high-tech companies — listed at the Neuer Markt in Germany (NEMAX Index) or at the Nasdaq in the U.S. — have suffered severely as the dotted circles illustrate.
Dennis Kundisch
4. Strategic Options
Abstract
Having discussed mega-trends of the financial services industry, the strategic options for companies that operate in this dynamically changing business environment will be the issue of this chapter. In the end, it seems to come back to Porter.15From a strategic point of view16, the decision is whether to pursue gaining cost leadership, to differentiate the offered services from other competitors or to serve just a niche market. The niche market strategy in terms of products, a specific customer group or a regional market as a generic strategy does not apply in the context of this book, since the focus is on larger entities such as German universal banks with a broad customer basem, which would have difficulties revoking their decision at short notice to serve the mass market.18’79
Dennis Kundisch
5. Life-Cycle Solution Provision
Abstract
As outlined above, the traditional financial services market is characterized by a poor quality of consultation and service — not only for retail customers, but also for high end customers in private banking237— and an increasing customer willingness to switch banking affiliations resulting in a strong pressure on margins. At the same time financial services firms are facing increasing risk from continuously increasing volatile global markets.238
Dennis Kundisch
6. Concepts for Life-Cycle Solution Provision
Abstract
Having laid out a vision and a sustainable strategy for a financial services provider in the (Post) Information Age in the preceding chapter, two important concepts will now be presented and discussed that may facilitate and contribute to the implementation of the strategy described above. The first one, acontent modelfor the financial services market, aims at keeping a customer better informed about financial services by facilitating the individualization of finance-related content distribution, thus contributing to solving afinancial problem in the broader sensewith respect to information needs. The second one, aproduct model, facilitates the process of generating an individualized solution to a customer’sfinancial problem in the narrower sense,i.e. the need for an intertemporal liquidity distribution.
Dennis Kundisch
7. Outlook: The Importance of Trust
Abstract
In Chap. 5 the vision and strategy of life-cycle solution provision were laid out. In Chap. 6 two conceptual CRM models to implement a life-cycle solution provision strategy were presented that may help to increase satisfaction and loyalty of the customer to the financial services provider by generating superior solutions for customer’s (latent) financial problems and providing a customer with information based on his preferences and (latent) needs. However, a misbalanced CRM strategy — not focusing on trust issues, but just on customer lock-in — will ultimately drive a financial services provider out of the market. In this chapter it is the objective to challenge the CRM business model in the financial services sector and derive important recommendations for firms operating in the market. Specifically, it will be shown that the strategy of acquiring a customer with a significant investment and locking this customer in with specially tailored services may not be sustainable, if this lock-in is based on the notion of assumed high switching costs.
Dennis Kundisch
8. Summary and Outlook
Abstract
The starting point for this book was the observation that (German) financial services firms have not been able to generate an adequate return for their shareholders in the business with private customers in recent years. Therefore, the development of a vision, a complementing strategy as well as exemplary implementation concepts that provide a firm operating in this market with a sustainable competitive advantage was the center of interest. In the following, the main findings of the analysis and, finally, primary prospects for further research will be presented.
Dennis Kundisch
Backmatter
Metadaten
Titel
New Strategies for Financial Services Firms
verfasst von
Dr. Dennis Kundisch
Copyright-Jahr
2003
Verlag
Physica-Verlag HD
Electronic ISBN
978-3-642-57412-2
Print ISBN
978-3-7908-0066-1
DOI
https://doi.org/10.1007/978-3-642-57412-2