New Strategies for Financial Services Firms

The German financial services market is in deep crisis. Deregulation and the new means of communication have fostered competition and made the market a transparent level playing field. Moreover, customers increasingly demand individualized solutions to their financial problems. Many financial services providers reacted by merging to realize scale effects and adapted "me-too-strategies" that will not provide for a competitive advantage. In this book, the life-cycle-solution approach is presented. This anti-cyclical strategy puts the customer and his life-cycle in the center of interest, in order to service him according to his latent needs - wherever it is economically sound to do so. However, this book does not stop at the strategic level, but presents two concepts that help to better utilize customer relationships. Using IT as an enabler, the quality of financial advice can be improved and at the same time cost can be lowered due to streamlined consultation processes.

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The theme of this book "New strategies for financial services providers" is an equally relevant and important topic in science and practice. In the (post) informa­ tion age economy, the German financial services market and many big financial services providers are in a deep crisis. Increasing competition due to deregulation and improved transparency through new means of communication on the one hand, and empowered customers demanding individualized solutions for their fi­ nancial problems e. g. because of new working circumstances, increase the pres­ sure on the market participants to alter their strategies according to these new challenges. Many firms have reacted defensively either by merging in the hopes of realizing scale effects - a high-risk venture considering the last few years - or by adapting "me-too-strategies" (also known as "lemming-banking") that do not provide for a sustainable competitive advantage. Based on a profound analysis of developing mega-trends in the years ahead, es­ pecially in information and IT-intense market, Dr. Kundisch develops a new anti­ cyclical strategy that aims at using IT as an enabler to strengthen customer rela­ tionships and focus on individualized solutions wherever it seems economically sound to do so. However, he does not stop after the development of the strategy, but provides two important concepts that may help turn this vision and strategy into reality. Thus, he favorably and refreshingly differentiates against many contributions that stop at the fairly abstract strategic level.

Contenu

1 Introduction.- 1.1 Motivation.- 1.2 Problem Statement.- 1.3 Delimitation.- 1.4 Outline.- 2 Definitions.- 2.1 Financial Services and Financial Products.- 2.2 Financial Services Providers, Markets and Organizations.- 2.3 Financial Problem, Individualization, and Customer Relationship Management.- 3 Mega Trends in the Financial Services Industry.- 3.1 Regulation.- 3.2 Society Changes.- 3.3 Working Life Conditions.- 3.4 New Quality in Communication.- 3.4.1 Overview.- 3.4.2 Increasing Market Efficiency.- 3.4.2.1 Literature Review.- 3.4.2.2 Search Cost Model.- 3.4.2.3 Model and Its Assumptions.- 3.4.2.4 Sequential Search.- 3.4.2.5 Simultaneous Search.- 3.4.2.6 Combined Approach.- 3.4.2.7 Excursus: Simultaneous Search in the German Financial Services Market - Status Quo.- 3.4.2.8 Extensions of the Basic Search Cost Model.- 3.4.2.9 Limitations of the Analysis.- 3.4.2.10 Conclusion.- 3.5 Summary.- 4 Strategic Options.- 4.1 Cost Leadership: Mergers and Acquisitions.- 4.2 Differentiation: Life-Cycle Solution Provision.- 5 Life-Cycle Solution Provision.- 5.1 Vision.- 5.2 Strategy.- 5.2.1 One-Stop Shop Solution Provider.- 5.2.2 Individualization.- 5.2.3 Strategy of Choice.- 5.2.4 Multi-Channel Approach.- 5.2.5 Life-Cycle Consultation Approach.- 5.2.6 Customer Lifetime Value.- 5.2.7 Pricing: Business Model.- 5.3 Summary.- 6 Concepts for Life-Cycle Solution Provision.- 6.1 Research Framework.- 6.2 Content Model.- 6.2.1 Methods.- 6.2.2 Right Content.- 6.2.3 Right Time and Right Channel.- 6.2.3.1 Classification Sub-Layer.- 6.2.3.2 Channel-Selection-Sub-Layer.- 6.2.3.3 Content-Adaptation-Sub-Layer.- 6.2.3.4 Relevant Attributes.- 6.2.4 Application.- 6.2.4.1 Implementation Vision.- 6.2.4.2 Practical Experience and Implementation at Deutsche Bank.- 6.2.5 Limitations and Prospects for Further Research.- 6.2.6 Conclusion.- 6.3 Product Model.- 6.3.1 Introduction.- 6.3.2 Problem Solution Process in Financial Planning.- 6.3.3 Assumptions.- 6.3.4 Model under Certainty.- 6.3.4.1 The Financial Problem.- 6.3.4.2 Formulation and Solution of Residual Problems.- 6.3.5 Model under Uncertainty.- 6.3.5.1 The Financial Problem.- 6.3.5.2 Formulation and Solution of Residual Problems.- 6.3.6 Model under Risk.- 6.3.6.1 The Financial Problem.- 6.3.6.2 Formulation and Solution of Residual Problems.- 6.3.7 Selection of a Superior Solution.- 6.3.7.1 Superior Solutions under Certainty.- 6.3.7.2 Superior Solutions under Uncertainty.- 6.3.7.3 Superior Solutions under Risk.- 6.3.8 Discussion.- 6.3.9 Limitations and Prospects for Further Research.- 6.3.10 Conclusion.- 6.4 Summary.- 7 Outlook: The Importance of Trust.- 7.1 Introduction.- 7.2 CRM Strategies and Underlying Assumptions.- 7.3 Trust as a Vital Component of Switching Costs.- 7.3.1 Customer Loyalty in the Financial Services Industry.- 7.3.2 PDE-Services and the Infomediary Approach.- 7.3.3 The Concept of Trust.- 7.4 Special Characteristics of Financial Services.- 7.5 Effects on CRM Strategies for Financial Services Providers.- 7.6 Summary.- 8 Summary and Outlook.- 8.1 Conclusion.- 8.2 Prospects for Further Research.- List of Abbreviations.- List of Figures.- List of Tables.- References.