Advantages and disadvantages of implementing internet banking

Executive Summary

The merchandise that I propose to establish is on-line certification of sedimentations ( on-line Cadmiums ) or on-line fixed sedimentations. These give a fixed rate of involvements on financess deposited for a fixed period of clip. The clients can non retreat their financess before the adulthood, and if they do so they will be charged with a sensible punishment.

The macro state of affairs of UK supports the launch of this merchandise. In the wake of the fiscal crisis, the nest eggs civilization has one time once more gained currency. The British are salvaging more and more figure of British economy.

The engineering substructure of UK supports the launch of the new merchandise. It has a high cyberspace incursion. The use of on-line nest eggs merchandises is comparatively low when compared with the cyberspace incursion. Therefore there is possible for high market growing.

There are a figure of formidable rivals in the likes of HSBC, ING, Lloyds, Halifax etc. The competitory advantage can be built around more attractive involvement rates, more convenient procedures and better client service.

The bing substructure, resources and capablenesss of the bank will enable the successful launch of the proposed merchandise. The success of the merchandise will be measured on such parametric quantities like market portion captured, gross revenues, profitableness, client satisfaction etc.

The effectivity of the advertisement run will be measured on such steps like return on advertisement outgo and advertisement snap of gross revenues. The estimations made in this market program have been done with a conservative mentality. Expected net incomes have been under-estimated. The intent of the selling program is to give a vision of the selling processes that have to be implemented if we move in front with the launch of the proposed merchandise.


The nest eggs civilization in UK has regained currency in the station fiscal crisis scenario. It is the ideal clip to establish our merchandise, on-line certification of sedimentations or on-line fixed sedimentations. The financial shortage of UK is touching new highs. To finance this shortage the authorities is promoting British to salvage more. The nest eggs rate is continuously demoing marks of increasing. As the economic system recovers, unemployment falls and rewards increase farther, the nest eggs rate as a proportion of income is expected to increase.

There are already a batch of traditional and on-line involvements bearing direct nest eggs merchandises available in the market. The instance for on-line nest eggs merchandises is peculiarly strong because of the uncapped market potency of this section. The British have until now been comparatively slow in encompassing on-line nest eggs merchandises. Merely approximately 18 to 20 million British usage online nest eggs merchandises. This is about equal to the figure of users of on-line nest eggs merchandises in France which has a much lesser cyberspace incursion than UK. ( Hollensen, 2003 )

The low incursion, the extended web of cyberspace and the engineering substructure of UK support the cause for the launch of the new on-line certification of sedimentations strategy. Add to this the booming civilization of nest eggs and we have a winning instance in our custodies.


The merchandise is on-line certification of sedimentations or fixed term involvement sedimentations. It is a really low hazard clip sedimentation that offers higher involvement rates than savings histories. Cadmiums will be available for adulthoods runing from three months to five old ages. The Cadmiums will give one-year involvement rates or one-year per centum outputs or AERs that will change depending on the adulthood. Higher the adulthood, higher will be the involvement wages.

The users need to keep their Cadmiums until adulthood. If they withdraw their financess before adulthood they will necessitate to pay a sensible punishment.

The engineering will be that users can travel to the web site of the bank from where they can make full the application for opening an on-line Cadmium or fixed sedimentation history. This will necessitate 10 to 20 proceedingss. After they have submitted the application the bank will follow it with confirmation. After the confirmation is complete they can reassign financess electronically or through cheques into their history.

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Online banking package, customized for the demands of the bank will be used by the bank. This will be bought from one of the premier sellers of banking package. The online terminuss will be connected to the cardinal waiter or terminus of the bank through which the users can entree their on-line histories. ( Kotler 2000 )

For client attention prospect a call centre will besides be opened so that all clients can speak about their jobs and enquiries to existent people round the clock. This will give a assurance to clients that they are non relied on online aid but they can speak to bank at anytime for the jobs for which they can non happen the solution online.

Outsourcing of the call centre will be the best engineering that the bank will utilize to get the better of the high disbursals of call centre.


The PESTLE analysis is the analysis of political, societal, technological, legal and environmental factors to develop a context for the merchandise:

Political Factors- The political environment is in favour of our merchandise. There is a pro-savings political attitude, and this attitude has come strictly due to the effects the fiscal downswing brought to the people. Consumer is going more and more prudent to salvaging as they lose the assurance in the economic state of affairs of the universe. So this is the right clip to establish the proposed merchandise.

Economic factors- The economic system is still non in a robust form. This means that the nest eggs will be low as nest eggs rise in proportion to income. However the economic system is expected to retrieve shortly and savings rate will increase as the GDP rises.

Social Factors- The British ‘s are recognizing a new the importance of nest eggs for long term fiscal wellbeing. They are consciously doing attempts to salvage more, and if they are offered high involvement rates they will be attracted to our merchandise and will make gross for our organisation.

Technology Factors- The engineering substructure available in UK can back up the new merchandise. There is really high cyberspace use and incursion. Besides for client services aspect the call centre can be outsourced to either INDIA or PAKISTAN which will assist to cut down the cost and giving a satisfaction to client that they can acquire assist with all their enquiries by speaking to existent people.

Legal factors- The sedimentations, with certain makings, are insured under the Financial Services Compensation Scheme ( FSCS ) .This makes them a really low hazard merchandise from the point of position of clients.

Environmental factors- The engineering used for the service is environment friendly. There are no ecological issues involved with the launch of this merchandise.


Strengths- The strength is our strong banking substructure, believable trade name name and an extended loyal base of clients. We have procedures that are capable to do the new merchandise a commercial success.

Weakness- This is our first venture into such on-line merchandises. The bing human resource of the company has no experience in it. The human resource will necessitate preparation for the new merchandise which can detain the launch procedure.

Opportunities- The chances are immense. The market is untapped and hence there is besides possible for growing in the market.

Threats- The menace comes from rivals like HSBC, ING etc that have more extended experience in the sphere of on-line nest eggs merchandises.


To get the better of the above failing a separated division will be erected that will look after this on-line involvement bearing direct nest eggs merchandise. The human resources in this division will be those who have earlier experience in managing such merchandises.

The scheme of the company will be two-pronged. It will take to increase the portion in the bing market every bit good as penetrate new markets for the merchandise. For this the promotional and advertisement run will be extended.

The chief rivals will be Bankss that offer similar merchandises. Head among our rivals are:











The market will be a tightly contested one in the close hereafter. The involvement rates will be the chief point of distinction in footings of merchandises attribute. Other than that the competitory advantage can be gained on the undermentioned evidences:

A better service to the clients.

A trade name image that is believable in the heads of the clients.

Better communicating with the consumers.

The competition will be won by those who perform good on the above critical factors of success.

Selling Research

The purpose of marketing research is to mensurate the demand for the freshly introduced fiscal merchandise. Whether the demand is adequate to impart commercial viability to the new merchandise. The selling research is the first measure for inventing an effectual selling program. For marketing research we have relied on secondary beginnings of research. There is adequate dependable research on the topic. Based on that we have estimated the market size as followers:

No of users of on-line fiscal products- about 19 million

Average nest eggs of a British- lb 90

Entire nest eggs of the 19 million users of on-line fiscal products-1710 million or 1.7 billion.

Assuming 50 % of their nest egg goes into on-line fiscal products- .85 billion or 850 million lbs.

If 15 % of this goes into on-line certification of sedimentations or fixed sedimentation accounts the market size will be- lb 127 million.

Selling Scheme

The selling mix is woven around the undermentioned six Ps:

Product- The merchandise of on-line certification of sedimentations or fixed sedimentations fulfills an of import client demand of puting their nest eggs productively and at the lowest hazard. The on-line component makes the service more convenient.

Place- The merchandise will be distributed through the cyberspace. Since the cyberspace has such an extended range that encompasses all of UK, the distribution of the merchandise will be extended. Through our call centre the merchandise will be marketed to our bing clients every bit good so that they can profit from our offer.

Promotion-The publicities will be done extensively. We will hold three separate advertisement schemes. These schemes will be dependent on the type of media. The three types of media that we will utilize for puting our advertizements are:

Print media which will include newspapers, fiscal newspapers magazines etc.

Electronic media that will consist the assorted telecasting channels.

Internet advertisement which will include advertisement on assorted web sites and networking sites. A particular focal point will be on the internet media as for market incursion we are aiming those who use the cyberspace extensively and are comfy with cyberspace enabled minutess. Google Adwords and Google sense will besides be considered so that client looking for good involvement rates on their economy can see our merchandise on top as they use the biggest and most sure hunt engine on cyberspace.

We plan to utilize separate advertisement bureaus for planing the advertizements for the different types of media. The advertisement run will based around our cardinal thought of “ Increasing your nest eggs. ”

Besides the advertisement bureau we will besides utilize the services of a Public Relations bureau to make a favourable environment before the launch of the merchandise. For establishing new merchandises PR is a valuable tool.

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Price- The costs involved in fiscal merchandises like this one for the clients are the psychic costs. But as Adam Smith, the male parent of economic sciences, justly said, “ The greatest costs are the psychic costs ( Vanhoose 2002 ) . ” We have reduced the psychic costs by doing the whole procedure as simple and every bit transparent as possible. The convenience of utilizing our merchandise will be unmatched.


The execution agenda will be as follows:

Planing – 30 yearss.

Software Development-45 yearss.

Name centre development and outsourcing-45 yearss.

Execution and testing of the software- 30 yearss

Planing of publicities run – 30 yearss

Recruitment and preparation of human resources- 60 yearss

The critical waies will be:

Planning-0 to 30 yearss.

Software development- 30 to 75 yearss.

Name centre development and outsourcing- 30 to 75 yearss.

Recruitment and training- 75 to 90 yearss.

Therefore it will about take 90 yearss to establish the new on-line certification of sedimentations merchandise.

If any of the critical way activities is delayed it will detain the whole undertaking. But to counter this we have already taken a clip frame of six months for the launch of the new merchandise.

The new division that will look after the procedures of the on-line commercial sedimentations will hold approximately 150 people.


Cost of merchandise development ( excepting package development ) -pound 1 million

Ad budget – lb 2 million.

Therefore excepting package development, the approximate costs will come at around lb 3 million.

We have calculated the current market for on-line fixed sedimentations to be around 127 million lbs yearly. We plan to capture 10 % of this market in the first twelvemonth.

10 % of 127 million- 12.7 million

Grosss in the first year- 12.7 million lbs.

We expect a growing rate of 5 % per annum in our market portion.

Therefore Grosss in the 2nd twelvemonth -13.3 million lbs.

Grosss in the 3rd year- 13.9 million lbs.

We have assumed a changeless market size for the interest of simpleness. However if we take in the growing in the entire market as incursion increases farther, the grosss will be much higher than our estimations.

The entire figure of clients in the first twelvemonth will be about 1.9 million. We have the resource base to provide to such a big sum of clients in the first twelvemonth itself. We will leverage our bing capablenesss to make so.


The merchandise launch will be controlled by monitoring and commanding the critical activities. The success of the selling program will be based on the public presentation in the first twelvemonth on the undermentioned parametric quantities:

Gross saless or grosss in the first twelvemonth.

Market portion captured.

Penetration into new markets.

Profitableness or the rate of return on the investings.

In the subsequent old ages the public presentation will be measured on the undermentioned parametric quantities:

Growth of the market portion of our merchandise in comparing to the industry growing.

The satisfaction of the clients with our service.

The success of the advertisement run will be measured on the undermentioned parametric quantities:

The per unit gross revenues generated on the per unit outgo of advertisement. This can be computed from the expression: Annual sales/ Annual outgo on advertisement.

By ciphering the advertisement snap of gross revenues. Advertising snap of gross revenues is the per centum in gross revenues if the advertisement outgo is changed by 1 % .The expression for this is: Ad Elasticity= Percentage alteration in sales/ Percentage alteration in advertisement.

The purpose of the above prosodies is to hold an nonsubjective prosodies for measuring the public presentation of the selling program.