Some of our readers attended the Retail Delivery '98 conference in Las Vegas. If you did, then you noticed the recurring theme of banking's need to deliver excellent service, quickly and inexpensively, (more on this theme in the enclosed GSQ magazine) or run the risk of losing customers to large Internet-savvy companies, such as Microsoft.
According to Edward D. Horowitz, Citibank's corporate executive vice president, "If we let these companies take over our businesses, then we are dead." Horowitz also made the analogy to cable TV. "What cable and satellites did to television, the Internet is going to do to financial services."
Bank One's president and CEO John B. McCoy said, "Just doing business like you've always done it isn't going to work." Bank One put their ëmoney where their mouth is' when they paid $90 million to Microsoft for a place on their Web page and also paid $125 million to Excite.
James M. McCormick, president of First Manhattan Consulting Group in New York, said, "This business will be a magnet for competitors. Interlopers will be the billionaires of tomorrow." Ross Perot warned that competitors strike when an industry is doing well and companies become complacent.
While much of the show's focus was on electronic bill presentment and payment, Robert B. Hedges, of Fleet Financial Group, said bankers should not put all their eggs in the bill presentment basket. He believes those services are becoming a commodity and it is vital that banks use the Web for much more than just bill presentment and payment.
In an industry that is known for its slow turning wheels, bankers are probably justified in feeling vulnerable to companies who are experienced in the minute by minute life of Internet companies.
