Portal Promises--and Perils.

• Author: Mariyappa, Tej
• Position: Electronic commerce in the financial services industry

E-commerce portal. Those are buzzwords you hear tossed around these days in the financial services industry. Bankers use them in sentences like: "We've got to have an e-commerce portal, and we've got to have it today!"

So what's an e-commerce portal and what's so darned important about it? The issue of e-commerce portals is likely to come up today as many financial institutions develop their second and third generation Web strategies. Banks are looking to portals to chive website usage and service adoption as they expand their offerings into new online territory--such as brokerage, health insurance, life insurance, travel and shopping options--and deliver a more personalized online experience.

In the rush to discover untapped opportunities, however, financial institutions need to take the time to develop and deploy the right e-commerce portal strategy--one that supports their underlying business objectives. Before banks look at portal solutions, they should understand just what a portal is. Webopedia.com defines a portal as a website or service that "offers a broad array of resources and services, such as e-mail, forums, search engines and online shopping malls." The first Web portals were online services, such as American Online (AOL), which provided access to the Web. Today, many traditional search engines, as well as e-businesses across virtually all industries, have integrated portal technology in order to attract and keep a larger audience.

For Internet banking users, e-commerce portals act as the online consumer's financial destination. For Internet banks themselves, portals are the natural progression in expanding service offerings. Internet bank portals come in two varieties: hyperlinked and vertical.

Hyperlinked: Financial institutions link to third-party service providers for expanded services. While this takes some of the Web development and maintenance responsibilities off the financial institution's plate, it also reduces the bank's control over it's brand, advertising and additional revenue opportunities since customers would be forced to exit the bank's site in order to take advantage of third-party products and services.

Vertical: Keeps customers within the confines of the financial institution's online space, thereby enabling the institution to retain control of its brand; prevents competing ads from being shown to customers; reserves the right to display its own ads; and even partners with others to target ads at customers...