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December 13, 1999

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E-Transformation
Financial Services Stay Out In Front
Companies recognize importance of E-business technology

By Jennifer Mateyaschuk

Illustration by James O'Brien inancial-services firms are ahead of companies in most industries in deploying E-business across the majority of their business units. In the next year, they'll lengthen that lead.

According to InformationWeek Research's E-Business Agenda Study, 96% of IT and business managers surveyed in financial services say their companies have widely deployed E-business or will be doing so in the next year. That's one percentage point higher than IT companies, and considerably ahead of the other three vertical industries surveyed.

In addition, 59% of financial-services companies have created a Web-only business division or are about to, and half plan to participate in a vertical-industry market consortium in the next year.

Chase Manhattan Corp. is considering spinning off a Web-only company as its next move. "The Internet is changing everything we do," said Joseph Sponholz, vice chairman of Chase, at a recent internal meeting of Chase's IT managers. "We must ensure that we evolve as it evolves."

Steve Sheinheit, executive VP of corporate systems architecture with Chase, says one of every four expense dollars is spent on technology. Last summer, the company relaunched its Web site to make it easier to use. Next year, the company will add the ability to view returned checks and to file merchant charge-dispute forms online.

Partnerships are becoming increasingly important to the financial-services industry: 45% of financial-services respondents to the InformationWeek Research survey say their company is engaged in Web partnerships, while 29% are pursuing that tack. Earlier this year, for example, Chase formed an alliance with ShopNow.com Inc., whereby Chase customers can make purchases on ShopNow.com's Web site using their Chase accounts.

chart Prudential Insurance Co. of America is using the Internet to expand into other lines of business, including financial services. The company's PruOnline site lets customers access information about account balances, insurance policies, and money-market and mutual funds. Consumers can also get insurance quotes, pay bills, and transfer funds at the site.

The ultimate goal, says Prudential, is improved customer service. To that end, Prudential is linking its call centers and back-end systems so customer-service agents can provide information about any of Prudential's businesses. The company's real-estate group is working to provide sales agents with wireless devices that will let them view multiple-listing databases and financial information.

An insurance subsidiary of Sisters of Mercy Health System St. Louis, a health care provider, is experimenting with an online enrollment service to let its business clients who get insurance also register for health-care coverage. "This would reduce the time involved in enrolling," says John Ward, senior consultant for Sisters of Mercy. Sisters of Mercy will likely partner with other companies to expand beyond enrollment services, too.

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