Identification of web-based solutions for the business model of medium-sized cooperative banks : evidence from consumer expectations

Abstract

Although cooperative banks in Germany gained trust and higher reputation during the financial crisis they are still fearing the "commodity trap". This phenomenon makes their classic retail products redundant. The emerging topic of business model designing poses a solution and enables a rethinking of this unique type of banking. Web-based solutions in the context of this thesis try to prepare this discussion for bringing the brick and mortar banking business "on-line". They are based on the web (channel) as a part of the business model. The thesis focuses especially on the neglected role of the internet: cost pressure and a lack in management attention put the "vr-banks" behind. Therefore, the enormous opportunities which lie in the integration of the internet in the so called multi-channel-approach are shown. With a customer survey (n=493) across 13 vr-banks in Western Germany the assumptions on how to smoothly design a more web-enabled business model were tested. The most important hypotheses deal with the customer´s perception of the vr-bank´s value proposition: the personal advisor and the branch network show a high importance and facilitate a high security; however, 98.5% of the respondents state that the vr-bank should care more about the customer-relationship. A spot check on incoming e-mail tickets showed that one fifth of all electronic requests were caused by inquirers that previously had dissatisfying contact to an employee of the bank. Although, the overall perception of services is satisfying (61%), two thirds of the respondents find that the vr-banks are not exploiting the potential of their business model enough. They show great support for new services and possible new partnerships. However, there are significant differences among the various target groups. Demographic variables like family environment, aging and the baby boomer generation should dictate the pace for web-based solutions. 90% of the sample is using the internet demanding high security and a great ease of use. In some points, especially concerning possible partners, the customer perception differs significantly from the bank managers´ opinion and other current research that deals more with the internal bank view. But these factors identified are only the vanguard of a complex framework that has not been discovered, yet. Due to the low rate of absorptive capacities in vr-banks the degree of exploration in this paper is adjusted to the minimum-effective-dose. All results and recommendations are condensed in a small framework that creates a possible information system.