E-Finance: Critical Mass for the Digital Masses? MacroMonitor Marketing Report Vol. V, No. 6 January 2002

In the post–September 11 world of consumer finance, one unanticipated result of the heightened security concerns might be the increased willingness of consumers to take the digital approach to their banking, bill-paying, and other transaction needs. E-payments and other e-finance transactions relating to investing, banking, loans, and insurance could experience a boost as customers try to minimize their reliance on the postal service as well as seek information to help them set priorities and manage their personal lives. In addition, the fact that the financial technology infrastructure did not collapse in the wake of the terrorist attacks should bolster the confidence of still-recalcitrant users and assuage their concerns about the stability and reliability of online transactions.


Computers and Financial Services

Having customers use electronic delivery channels for their transaction needs should help the corporate bottom line. Encouraging customers to use online services is a solid strategic move. Institutions benefit from the almost immediate reduction in costs of processing paper documents, and—perhaps more importantfinancial personnel can focus more on serving the complex needs of valuable customers, building relationships, and personally marketing higher-revenue–producing products and services.

How successful financial institutions will be in pushing e-finance to critical-mass levels will depend much on their understanding of the digital consumer market. This report provides an overview of e-finance users—households that access at least one online financial service—by analyzing their demographics, life stages, and psychographic profiles. Who are these customers? What types of e-finance services do they engage in? What are their motivations for conducting efinance? What can financial institutions learn from these users that will help them expand their e-finance customer base? Market volatility notwithstanding, consumers will always welcome convenient delivery-channel alternatives to meet their financial needs. As the financial market takes a breather and businesses retrench, now is an opportune time to step back and reassess the needs of online financial users.