Can Brick & Mortar Leaders Be Brick & Click Leaders?

  • Written By: R. Lynch
  • Published: April 12 2000


IT Management Issue

Size matters. To be in the hunt, financial services firms need to function in a single global capital market tied into many local markets. Financial services continue to build momentum towards global growth, continuing the migration from what had been a predominantly local/national business focus. This growth is being fueled by:

  • Loosening regulations

  • Increased savings and investments in the developed world

  • A continuing pattern of investment banking/commercial
    banking convergence and consolidation (sometimes burdening companies with duplicate capabilities which slows momentum)

  • The impact of the Internet and technology on both the financial markets and business operations in global financial services

Financial service firms are also feeling pressure to deliver sustained and predictable profitability over an extended horizon in an increasingly volatile business environment. This volatility can be linked to many factors, including the increased commoditization of products (current pressure from e-commerce), the rapid pace at which products and services can be copied by competitors, and the soaring costs and risks associated with information technology decisions.

There is also a trend towards "all in one" service offerings, where customers, with access to vast amounts of information, are now more knowledgeable and mobile and have access to the full range of investment banking products and services. Financial service firms must compete in all of these areas if they plan to maintain long-term client relationships.

Business Implications

To help illustrate the issue, consider Zurich Financial Services, a global leader in the financial services industry specializing in financial protection and asset accumulation. Zurich Financial is moving fast on many fronts; concentrating on reorganizing its many subsidiaries (e.g., reorganization of Property groups), combining operations, selling non-strategic businesses, and making acquisitions. Perhaps the most significant business implication is their move from bricks to clicks. Zurich Financial is partnering with technology companies to fill holes on the e-commerce front and launching projects from within. Several recent initiatives include:

  • A major addition of fund and asset management business and the launch of a virtual bank in Switzerland (Zurich Invest).

  • Zurich Commercial is designing financial packages to meet individual needs by using Cognos web solutions to access and analyze customer profile data; rendering older static, costly, and time consuming monthly reports obsolete.

  • Creation of an e-commence hub (portal through which brokers have access to all Zurich Financial products and possible third party products).

What is in store for companies like Zurich Financial?

Information Technology Management Implications

Statistics show that close to 80% of the IT projects initiated by financial services companies without a business case and clear business objectives are considered failures by executive management.

The customers of financial institutions expect integrated services. They do not want to have to identify themselves repeatedly and carry multiple pin numbers to gain access to multiple accounts.

The changes that the online revolution is bringing to financial services are daunting. Below we document a series of IT and operational issues that companies face:


  • Maintaining a global view and providing one face to the customer.

  • Keeping back-end systems such as financial accounting up with the pace of the front-end systems such as web banking and investing.

  • Impact of the web on agents and brokers; including how to handle channel conflicts.

  • The user interface for direct to consumer transactions must be responsive, intuitive, and integrated. For example, is it obvious how a consumer would sign on once and change his/her address for all accounts with your institutions? and its affiliates?

Data Warehousing (data integration, data sharing, data provisioning)

  • Do multiple systems appear as one to the customer? to the company?

  • Is data extraction synchronized across systems?

  • Do data provisioning systems respond to requests for new data items fast enough?


  • Is the company's electronic messaging system an enabler for effectiveness, efficiency, and agility?

  • As the company continues to acquire, are the e-mail systems tied together seamlessly (i.e., not only communicate with each other but facilitate calendaring, information sharing, centralized directories, etc.)?


  • Is the company and customer data private, trustworthy and legally compliant?

  • Does the company have a firewall(s) protecting its confidential and high-risk data & assets from external attack? - From internal attacks?

  • Does the company have an Intrusion Detection System deployed on its network?

Business & IT Management Response

As the hectic pace and nature of change in the Financial Services industry continues to magnify complexity, cost, and risk issues, IT and business leaders must work together sooner and be bi-lingual; speaking in the language of IT and business. To do that business and IT leaders must reassess critical leadership competencies. According to Results-Based Leadership, a TEC partner and recognized expert in leadership alignment systems, the move from bricks to clicks will require a new emphasis on competencies such as:

  • Taking a strategic perspective - the ability to take a broad, long-term view of the business and its future and developing a distinctive focus and direction for the organization so that it will be able to outperform the competition and attract and excite employees and investors.

  • Turning vision into action - communicating a consistent and compelling understanding of the organization's vision and translating it into defined plans tactics so that employees throughout the organization understand what they need to do to make it a reality and are committed to being part of it.

  • Aligning the organization - acting to ensure that the organization's internal enabling systems (e.g., structure, systems, and processes) are aligned so that it can more effectively execute its strategy (e.g., how to handle channel conflict).

  • Speed and agility - supporting and enhancing the ability of the organization to act quickly and decisively so that it can adapt sooner and more effectively than the competition to changes in the unpredictable, uncontrollable business environment.

  • Building customer commitment and intimacy - keeping in close touch with the needs of targeted customers and building their commitment and loyalty to the organization so that firm equity is created and sustained (e.g., tailoring a company's approach and products to the subtleties of local overseas markets).

  • Supporting collaboration - fostering a spirit of trust, cooperation, and collaboration in working relationships throughout the organization so that the boundaries that often detract from organizational effectiveness are broken down and expertise flows to where it is needed in a timely manner (e.g., broker automation that allows real time access to company data and new roles for brokers).

The combination of clearly articulated organizational capabilities and the clear definition of the leadership attributes required to build them will help to:

  • Accelerate the speed with which financial services firms deploy high quality globally integrated services

  • Reduce the risks caused by 'internet speed"

  • Deliver distinctive products to global customers

  • Design for, and build to, efficient global service delivery

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