Banks 'Must Become Bill Consolidators'
Banks need to "speed up their development of online billing systems and become bill consolidators", says Pritesh Kotecha, of eiStream, or telecom firms will "encroach on banks' traditional territory". In short, bill consolidators can be at the center of consumers' daily financial management, regardless of whether they are a bank, or a telco, or of what delivery channel is used. With the provision of core banking services at stake, Lafferty warns, "banks should not rest on their laurels", particularly in Europe and the UK, where telcos, not banks, "have taken the lead in updating their back offices to develop online billing services".In the UK, telcos are investigating online billing and micropayments services, despite regulatory issues, but Lafferty predicts bill consolidation services to "be launched on a large scale in the near future". But "banks would be wrong to imagine that consumers will only trust them, and not others, to provide bill consolidation or other financial services", Lafferty argues. To provide bill consolidation, however, technical integration is needed, namely the automation of back-office functions, and the digitization of data from legacy systems and imaged documents from paper-based systems, for a "highly responsive" system.
Since the Internet empowers consumers to find 'the best deal', even if it is not provided by a traditional bank, bill consolidation services are a means for banks and telcos to tap potential new revenue streams. However, banks must be wary of telcos that waive charges for access to their own financial services sites, a move that "effectively subsidizes their financial services offering", Lafferty cautions. Despite the risks, online bill consolidation enables banks to court new customers, and non-banking entities to develop new financial services offerings that could, for example, be offered with other, detailed information via a portal.
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