Online based service strategy

Contents

List of abbreviations

1 Internet - mass media tool used worldwide

2 Internet based service strategy - a common trend?!
2.1 What is a strategy? How is it defined?
2.2 What are the characteristics of a strategy?
2.3 Which strategic changes happen?

3 Which concepts of internet based services exist?
3.1 Information strategy
3.2 Communication strategy
3.3 Transaction strategy

4 Example of a concrete configuration of service strategies
4.1 How is online banking defined?
4.2 Deutsche Bank's homepage
4.2.1 Information strategy on Deutsche Bank's homepage
4.2.2 About db OnlineBanking homepage

5 Why does Deutsche Bank use online based service strategies?
5.1 Competitive advantage through cost reducing
5.2 Online banks versus branch banks
5.3 Customer's satisfaction as one key term
5.4 Problems with online based services
5.5 Client's acceptance of online services

6 Conclusion

Bibliography

List of abbreviations

illustration not visible in this excerpt

1 Internet - mass media tool used worldwide

The electronic communication market was revolutionized by a new kind of mobile phones - the smartphones. Producer such as Apple Inc. or Samsung Electronics GmbH are highly specialized in building up these little computers combining a mobile phone with an organizer, personal storage for data, music and pictures as well as the technical foundation to reach the worldwide web independent from location and time. Also be highlighted are tablet computers. This latest product trend combines all functions of a smartphone with those of a personal computer. A research of BITKOM (based on data from European Information Technology Observatory (EITO) shows a dramatically in­crease of smartphone sales in 2011 (11.8 million (Shahd & Dr. Pols, 2012)) and for 2012 a turnover of over 15 million smartphones is expected (Shahd & Dr. Pols, 2012). Meanwhile, there was an increase of internet user too. “The Internet appears to be cheap, efficient, and ubiquitous channel for transmitting Electronic Data Interchange (EDI) transactions” (Porra et al., 1997, p.1). So, it offers the user the immediate availa­bility of news and newspapers, shopping portals or social communities in an easy and very comfortable way. Consequently, 51.7 million people in Germany used the internet regularly indicating by a survey made by ARD / ZDF of 2011 (Reitze & Schachter, 2011). That effect to Banks identifying the new market and use this common trend to form a new distribution channel. Online based services especially online banking solu­tions are the bank's answer to the easy availability of internet. As a result, banks record an increase of 12% of all online sold banking products (EFMA, n.d.). But how does it work? Which strategic concepts may use a bank? Which services are provided by the bank and how gets the customer access to them? Is there a relationship between the in­crease of internet user and the increase of online banking users? Do cost reducing and client's satisfaction influence banks in its strategic decisions making?

All these mentioned questions would be answered in detail within the next paragraphs of this assignment. It is one of a huge number of various studies and surveys dealing with the topic of online banking and its distribution channels. There are also books, e- papers and newspaper articles describing the topic from different perspectives and as­pects as well as analyzing background information and reasons according to effective­ness and profitability. Further, they focus on influencing factors and consequences for customer, possible problems and sustainable solutions. To combine the previous bullet points and describe the causal chain the following assignment gives an overview on internet based service strategies and specifies them with the example of the Deutsche Bank's product db OnlineBanking. The assignment is structured by defining some gen­eral aspects concerning strategy, elements of strategy and a short summary of the main changes in strategy. Afterwards, it gives a detailed view on the three main concepts of internet based service strategies followed by the example of Deutsche Bank's homepage and its product db OnlineBanking. The example discusses how Deutsche Bank imple­ments these service strategies as a concrete configuration in its daily business. The last paragraph analyses the reason of providing online based services, advantages and disad­vantages for both Deutsche Bank and its clients.

2 Internet based service strategy - a common trend?!

In this chapter some general questions about strategy and internet based service con­cepts are made and answered.

2.1 What is a strategy? How is it defined?

A strategy itself is defined as the basic and long term oriented behavior of a company and its departments in relation to the environment. With a complex combination formed by schemes, methods and activities a strategy helps the company to realize its future goals as well as to gain competitive advantages (Mosena et al., n.d.).

2.2 What are the characteristics of a strategy?

Strategies are mostly characterized by the following explanations based on information from Gabler Wirtschaftslexikon (Mosena et al., n.d.):

- areas of activity especially the scale of environmental relationship (scope/domain)
- the resources of the enterprise and the associated skills to achieve the strate­gic goals (distinctive competence)
- the competitive advantage
- synergy effects which may be established through strategic decisions

In addition some further items from following source (Schwenker, 2011, p.83)

- a strategy reflects the attitude, values and wishes of the executive board
- a company's strategy is always future oriented and is based on prospects of the development of own competence and knowledge
- strategies should not be understood as a result of a chain but as a process

2.3 Which strategic changes happen?

Prearranged and especially by the markets very well organized framework conditions are responsible for a strongly characterized economic system. For that reason, compa­nies have to adjust their strategy in the scale of external factors. One of them is the in­ternet. The worldwide web modifies markets, changes the competitive situation and therefore new market structures are being created (Luffmann et al., 1996, p. 43 and Hacker, 1998, p. 69).

In the seminar paper (Ghanawi, 2012, p.3) mentioned typical characteristics of the in­ternet changing markets are:

- Velocity of information transfer
- Synchronicity or interactivity
- Low operating costs

In today’s very fast life cycle it is not sufficient only to react to superficial changes to stay successfull. The secret is to identify such trends in early phases and to pick them up within the company's strategy. Furthermore, it has to be considered to integrate these trends into the division strategy.

The integration of European markets, the continuously increasing velocity of innova­tions as well as globalization have caused new ecological problems. The economic sys­tem has to interact with them to contribute its share too, but the key term has to be both the demand of far reaching perspectives and the detailed answers and statements of the management. So future development is going to change traditional strategic manage­ment methods and will extend the view of making decisions (Ghanawi, 2012, p. 3).

3 Which concepts of internet based services exist?

To reduce the enormous availability of different internet based services the next para­graphs concentrate on three interactional communication concepts: information, com­munication and transaction.

3.1 Information strategy

Information strategy describes how a company handles the availability of its data to gain a competitive advantage. This strategy can be seen as a detailed and complex plan developing within the daily business activities. According to the relationship between the company and the environment the plan promotes the company to a superior position. Viewed in detail, the company is able to provide information to their customers or online users occupying the inferior role of an information recipient. Information is not only used to inform customers but also to influence them, their attitude and their behav­ior and that nearly everywhere. That means almost every company distributes infor­mation about itself, its products and services via advertisements, promotion campaigns etc. to cause a representative effect. In summary an information service system includes:

- Information about a company and its goods and / or services
- Influence customer's behavior
- References for further developments
- References for any kinds of consulting services

Cf. four sources: (Honegger, n.d.) / (Schnydrig, 1999) / (Bair, n.d.) / (Hanson, n.d.)

3.2 Communication strategy

The communication strategy is the extension and develops of the information strategy by using additional features and communication instruments, e.g. dialog and interaction possibilities. Therefore, it is significant to define a communication strategy before or­ganizing, developing and building them up to detailed advertisement plans or promotion campaigns. These actions help the company to gain more control on its daily business and consequently it diminishes doubt, emphasizes planning and involves customers.

Key terms of a communication strategy are:

- Information distribution
- Clarifying issues within the relationship of a company and its environment Cf. three sources: (Anon., n.d.) / (Mosena et al., n.d.) / (Fischler, n.d.)

3.3 Transaction strategy

The transactional strategy outlines the company's exchanges of products and services with its environment to gain an added value for both. That means, the company has to communicate and to distribute information to its partners by using both previous men­tioned strategies. As a result, the transaction strategy causes the highest interaction level with its best-know representative in shop systems. There, the focus was on automation of single functions first, nowadays the first priority has cross-company and cross-selling integration. Transactional strategy covers:

- Communication between company and environment (action and reaction)
- Solution findings by providing request
- Relationship building

Cf. three sources: (Codjia, n.d.) / (Richards, n.d.) / (McClure, n.d.)

To visualize the mentioned items different concepts of internet based service strategies are explained and evaluated in the previous paragraphs. Looking further to the next sec­tions, their concrete realization will be outlined on the example of how Deutsche Bank implemented the concepts and how they use the different features within their product db OnlineBanking.

4 Example of a concrete configuration of service strategies

Describing the Deutsche Bank product db Online Banking as an examples for a configu­ration of the service strategies analyzed before the next paragraphs are structured start­ing with some general facts about online banking and followed by detailed information on handling and usage of only private clients. Finally, the objectives of both bank and customer are discussed.

4.1 How is online banking defined?

Online banking is an internet based platform on which banks provide bank related in­formation to their customers and on which the users are able to execute their bank trans­actions. So far, online banking is only used by private and business clients (this assign­ment will only concentrate on private clients) with the aim of comfortable access to their banking products (Hacker, 1998, p. 41).

As the term online banking is now defined the following paragraph starts with detailed information on how the information strategy is implemented within the homepage of Deutsche Bank.

4.2 Deutsche Bank's homepage

The self-presentation of Deutsche Bank in the internet as well as providing special and explicit information on its homepage are essential for the customer's first impression. Therefore, it has to be designed professionally and clearly so that customers find the necessary information quickly and by themselves. The next section looks closer at the homepage.

4.2.1 Information strategy on Deutsche Bank's homepage

The general Deutsche Bank's homepage with following URL: https://www.deutsche- bank.de/index.htm frames the center of all eventual activities. It keeps the customer informed about news, the latest projects and investments, general information about the bank (e.g. the company and its structure, history, figures etc.), company's related infor­mation (e.g. about the Annual General Meeting, cultural activities or significant ap­pointments) as well as the function of navigation to other more specific sub-homepages. One of these sites is db OnlineBanking which allows users the access to all the banking products e.g. account, security account etc.

4.2.2 About db OnlineBanking homepage

The subordinate homepage for db OnlineBanking (https://meine.deutsche- bank.de/trxm/db/) also functions as navigation point for further sub-homepages. In the following paragraphs four sub-homepages (cash solutions, product variety, FAQs and the tool “messages to the bank”) will be further explained.

4.2.2.1 Cash transfers and standardized cash solutions

The key term of db OnlineBanking is to administrate customer's financial needs with the focus of a local and time wise independant handling. In detail this means the clients have the technical possibility to get an overview on their financial situation, to transfer cash, order shares or make other investments etc. have their account available wherever and whenever they want. Providing the customer with this service can be seen as first step in the new information technology area. But to adapt to any developing client's needs as well as being competitive to others Deutsche Bank offers their clients further services to be more flexible for their personal needs. These are illustrated within the next subsequent sections.

4.2.2.2 Product variety

On the subordinate homepage for db OnlineBanking Deutsche Bank does not only offer the possibility to open a demo cash account for testing the range of features, functions and options but also to propose a real cash account. Further, this website links to differ­ent other subordinate homepages where the whole product variety of Deutsche Bank is presented. Starting with standard cash accounts including various features and services further sites cover to electronic cash- and credit cards, savings products and ends with complex investment and finance solutions. Through each click on a certain product the client gets more and detailed information about the product as well as the possibility to order the product or to make an appointment for more help with a bank clerk in the bank branch. For immediate help with technical issues or general questions the next section outlines a further possibility to get answers and problem solutions.

4.2.2.3 Frequently Asked Questions (FAQs) and service support

As mentioned in the previous paragraph with the FAQs Deutsche Bank provides an op­tion to get answers to the most frequently asked questions. There, the user may find support on how to deal with various problems, where to find further answers to special questions like security aspects but also user guides for different procedures and prod­ucts. The aim of FAQs is the following. Instead of writing an email or calling a hotline the customer may save both time and money by reading first the FAQs to solve the problem. If a problem or a question is not mentioned in the FAQs, the customer has the option to contact the db service support directly via mail or phone. The reason why Deutsche Bank has FAQs is to reduce simple and high frequent requests for service support as well as saving costs in the service support division especially in regards to service personal and technical equipment.

So summing up, simple technical and user-related questions are answered within the FAQs; for more specific and complex cases there is a service support in place to help the customers by contacting the support team directly.

The subsequent paragraph will continues with another communication element within db OnlineBanking.

4.2.2.4 Messages to the bank as communication method

After the log-in process via different access channels (personal identification number / transaction number, WebSign (Deutsche Bank product) or mobile TAN) the customer has access to all his activated products, personal information saved by Deutsche Bank and further services. One of these services is the tool “Mitteilung an die Bank” which enables the customer to send a message to the bank relating to topics like questions to a product, order a product, close a product or request for sending more information. So contacting the bank is only one service the customer can use. Further services are men­tioned and explained in the following paragraphs.

[...]