Trying To Solve The E-Business Puzzle

Virtually every business that historically delivers lots of transactions in a brick-and-mortar environment is ripe to move large chunks of its business online.

Banking is clearly an obvious one. There are real opportunities here given that the large traditional banks can't move fast enough. The big banks are in danger of seeing some young up-and-comer do to them what Amazon.com did to Barnes & Noble and Borders Books.

Citigroup has already spent a reported $160 million to build an E-business and thrown some 1,200 employees at the problem. An effort like that means there are all sorts of pockets from which resellers with expertise can grab chunks of the development effort.

The large banks clearly understand that an aggressive start-up that does not have the legacy of brick and mortar just might come along and hit them over the head with an E-business-only strategy that offers aggressive rates on the more lucrative banking services.

Smaller traditional banks are not immune here either, and without an E-business plan they may be squeezed out completely over time. The only real reason to actually walk into a bank these days is for loans and other high-end banking services, all of which would be more convenient to obtain electronically.

Brokerage houses are finding their business quickly being sucked away by the online trading houses, and banks just might be next.

One of the development issues that surrounds E-business banking is electronic bill presentment.

Many of us have already moved to bill payment electronically. I, for one, selected my current bank based on the fact that it had electronic bill payment services early and without charge.

However, I still have to wade through all my paper bills each month and then manually sign onto my bank's Internet site and type in who I want to pay, how much they should receive and when. Why can't I receive my bills electronically, allowing me to pay them quickly without having to type in the amount? There's an opportunity and eventually a need for all utilities and others that deliver a monthly bill to move in this direction.

The real rush to E-business will happen in the large enterprise accounts first because they are the most vulnerable right now to aggressive entrepreneurs with the vision to launch online-only versions of these services.

Real estate appraisals are an area within the banking system that is ripe for an online E-business solution.

Getting a mortgage requires the bank to do an appraisal of the property. To accomplish this, someone has to physically go to the house, take pictures, look at the property and then do a search of real-estate records to find comparable sales.

While this entire process may not be ripe for automation, certainly a chunk of it can be.

The issue is the Internet gold rush has lots of brick-and-mortar enterprise businesses that are rightfully running scared. They understand the vulnerability. Is anyone out there still using a full-service stock broker these days, for example?

Enterprise partners need to understand the threat that not having an E-business strategy is to their accounts and then be aggressive in presenting their ability to help those accounts get to the goal line quickly.

Robert Faletra is editorial director of the CMP Channel Group. He can be reached at rfaletra@cmp.com or (516) 733-8612.