James uncovers a great piece of research on relative branch network size. BankerVision: The mid-size bank hump and the arms race hypothesis In other words, the more branches a bank has, the less performing each branch is. At least, it seems that’s the case until you get large enough that your multi-market network externalities start to kick in. In the Hirtle typology, large enough is a bank with 501 or more branches. Mid sized is anywhere from 101 to 500. It appears there is some kind of “hump” that occurs as institutions begin to ramp up their service by adding … Continue reading The mid-size bank hump and the arms race hypothesis

In a dramatic shift that has ocurred over the last 10 years, Internet now forms a significant part of a majority of Canadians’ lifestyle. TheStar.com – Living online the new norm for Canadians 68 per cent of adult Canadians used the Internet for personal, nonbusiness reasons in 2005. In Toronto, that number rose to 75 per cent. Almost 2/3 of adult Canadians who used the Internet from home did so every day during a typical month. About six in 10 Internet users used it to read news or sports, or to conduct their banking online. Demographic factors have resulted in … Continue reading Living online the new norm for Canadians

Google continues to push the envelope for Internet business models.  From Customer World. Google says it will make a large number of online coupons available at no charge to consumers via its Google Maps service, while AdWords marketers have the opportunity to pay for a coupon-link alongside their ads. The methodology is not yet developed for how this will work, with several alternatives. Cost per download model – Pay per coupon downloaded( base level pricing) Cost per redemption model – Pay a little premium if the coupon gets redeemed Cost per repeat use model – Being Google, they can track … Continue reading Google coupons available for AdWords marketers

The commoditisation of mortgages until they are reduced to the banking equivalent of selling milk at the grocery store continues. They are low profit products that serve as introductions.  Mortgages are commodities to get customers in the door.  This detailed analysis of the banks’ 3rd quarter expected results is illuminiating with regard to mortgages and the profitability pressures felt by the Canadian banks. Canadian Banks & Insurance: BMO CM Preview of Cdn Banks Q3 2006 Earnings New mortgages continue to be originated at tighter margins than a year earlier. There is little doubt that the residential mortgage business has been … Continue reading Mortgages are reduced to door openers for Canadian banks

This article confirms my own observations in Manhattan May. A Bank for Every Block – New York Times At the intersection of 32nd Street and Park Avenue in Manhattan, a Citibank branch sits on the northeast corner. A Commerce Bancorp branch is across the street. A North Fork bank stands over the southwest side. And taking up the fourth corner spot: a new branch for J. P. Morgan Chase, which is not more than a short sprint from an HSBC banking center up the block. The business results are becoming dysfunctional. Deposit growth is expected to slow, and some data … Continue reading A Bank for Every Block

Account alerts are a key component for online banking going forward.  While Javelins definition might be a bit over the top we agree on the importance of alerts. Javelin Strategy and Research » Alert Growth Doubles Following ATMs and Internet Banking, Alerts Signify The Next Revolution in Personal Finance Internet banking has evolved and account alerts are not only a key next level, they will deliver greater customer loyalty by always being “there” for the customer.  Account alerts are sticky. Key points in online banking evolution before we got to alerts: account information bill payment customer service requests cheque presentment/ … Continue reading Alert Growth Doubles

Interesting and thought provoking meeting with a colleague today. Topic was customer behaviours, behavioural economics, and impacts on how we develop banking strategies. How we leap that chasm between strategies and results that can be directly attributable to those strategies? We all want to grow revenue, and let’s say there are 4 ideas on the table to generate revenue. All will require customers to buy into the idea and buy our products. At some point, it becomes a leap, and do we really know what constitutes success? Then layer in customers’ rapidly altering behaviours as a result of internet. Its … Continue reading Are customers behaviours changing

Westpac (Australian Bank) indicates that online marketing is not for it, because brand experience is not driven online.  When I started to read this article I misread it as a bank that doesn’t get it, but reading on, I feel quite the opposite.  Westpac understand the (Internet) medium well as it applies to big banks. The Better Banking Blog: Why Westpac won’t be spending more online Westpac says three things drive customer satisfaction – customer experience (around 50 per cent), products – their functionality and pricing (around 20 per cent), and brand perception (around 30 per cent). (Note:  this description … Continue reading Why Westpac won’t be spending more online (for marketing)