Overlooked exposure
Article Abstract:
Consideration of and planning for the potential impact of the Internet revolution on the banking industry have generally focused on the retail sector and ignored the commercial sector. Failing to include commercial banking in Internet strategizing can be dangerous because this sector can suffer from the growth of electronic banking in several ways. Online banking services may reduce commercial banks' revenues from cash management services, weaken their relationships with corporate customers, lessen their float revenue, undermine their ability to collect valuable customer information, and weaken their standing in the payments system. To succeed in the new marketplace, commercial banks must orient their product development efforts toward online services, leverage new customer information available in the electronic setting and partner with retail banks to take advantage of innovations in Internet banking.
Publication Name: Banking Strategies
Subject: Business
ISSN: 1091-6385
Year: 1998
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Moment of truth
Article Abstract:
CheckFree Corp's leadership position in the home banking market is being undermined by its recent disappointing performance, uncertain market demand and the entry of powerful competition. The prospects of the Norcross, GA-based provider of electronic bill pay services for home banking had been promising, given the advances in Internet technology and the emergence of electronic bill presentment. However, the company's stock fell 41% after the announcement of its dismal 2nd qtr 1998 earnings and its earnings per share forecast for FY 1999 of just 12 to 16 cents, down from consensus estimates of 32 cents. In addition to this, CheckFree faces strong competition from the Microsoft/First Data Corp joint venture MSFDC. Other potential rivals are Princeton TeleCom, CyberCash Inc and Just in Time Solutions. Nevertheless, CEO Peter Kight insists that CheckFree's slowdown is just temporary.
Publication Name: Banking Strategies
Subject: Business
ISSN: 1091-6385
Year: 1998
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