Internet bank failures :: essays research papers

Product failures happen more often than many people would think. The failure can result from many elements of a products campaign such as the introduction to a stale market, missing the target through improper ad campaigns, and most importantly, not modifying a products concept to appeal to a foreign market. Web banks, also known as internet-based banks, are one such example where the success that originated in the United States was not transferred to Europe. Instead, failure occurred because of three main reasons: the money plant, the lack of access points, internet fraud, and lack of unity among neighboring countries. Banking in Europe before the introduction of web banks was very basic. People were drawn to the personal attention they received from the customer service staff, the multiple access points such as ATM’s and local branches, and the ability to use new technology such as the internet to check balances and transfer funds. The banking structure was very similar across borders of countries and was what people were used to since the evolution of banking. People trusted their banks and showed a great deal of brand loyalty, an important factor that was overlooked when introducing web banks in Europe. Web Banks very quickly turned into a large failure for many companies across Europe. The initial concept of web banks was that they would provide many services to you in the comfort of your own home, often at far lower rates than traditional banks. While many traditional banks such as Vontobel Holding AG have many requirements to hold accounts with them such as a minimum balance charge and low interest rates, web banks main concept was to offer banking for free with no balance requirements, multiple loan opportunities, and the tracking of many separate accounts under one umbrella. Realization soon came that most banks were built on the personal customer service that it provided and the money that kept the bank afloat was the money earned off loan interest and account charges. This left many bankers in Europe to second guess the new web banks. "It would have been hard for us to establish full relationships with new customers, and we couldn't really see where the revenue was going to come from." With no solid revenue stream and no personal attention, a cornerstone for banking success, it is any wonder that the proposed web banks even were invested in.