Banks rushing to adopt electronic commerce are pouring away their money without a clear idea of how to recoup it. A new report from management consultancy Ernst & Young has found that although banks will spend proportionately the same amount of money on Internet technology in 2001 as they now do on branches, most have no idea how to make money from the Web. "Many of the banks surveyed seem compelled to invest now without a definable strategy," said Jonathan Charley, Ernst & Young's banking partner. Ernst & Young's report, Electronic Commerce and Connecting to the Customer, questioned over 100 banks in 26 countries. It found that despite the money banks are investing in Ecommerce, 96% of banks are not expecting to increase the sales of their products via the Web. Many have also missed some of the key benefits the Internet brings: over half admitted that the processing of Internet enquiries usually starts more than 24 hours after they were originated. In Europe, only a third of banks believe the Internet will help them to retain customers. They could be right, commented Charley. "Ironically, the very infrastructure that makes it easier to deliver a wider range of products and services to keep customers happy also makes it easier for customers to compare and contrast competitors," he said.
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