Internet Customer Acquisition at Bankinter

Class Discussion Questions

At the time that this case was written in early 2003, electronic banking or e-banking was something that
was immediately familiar to all banking clients, regardless of age, socio-economic status or location. All
banks have embraced the Internet, despite the dot.com implosion for the simple reason that e-banking
costs are substantially less that the costs of servicing clients needs through other banking channels. The
challenge for banks (including Bankinter) is customer acquisition and by implication customer retention.
The fact that it is relatively easy to switch accounts from one bank to another has meant that while IT can
facilitate customer lock-in, it can also foster disloyalty. Accordingly, banks have turned to a new type of
application called customer relationship management (CRM) to learn more about their existing customer
base and to identify who, among non-customers, might be worth targeting.
Please read through the following questions and be prepared to discuss your answers in class. Before
class, please ensure that you are familiar with Bankinters website: http://www.bankinter.com (an English
language link is available at the top of the homepage).
1. How has IT helped or hindered Bankinters customer acquisition strategy? If you were in charge of a
small community bank, how might you use IT to steal market share from the bigger retail banks?
(Hint: think about what HSBC, ING and Emigrant Bank have been doing recently).
2. Bankinter thought about becoming a pure-play e-bank but decided not to go that route and to instead
leverage their physical presence to become a bricks and clicks bank. What are some risks that pureplay e-banks face that hybrid banks can avoid?
3. On p. 3 of the case, the author notes that the bank is starting to measure profitability for each product
and for each customer. This concept is very close to what marketing folks call customer lifetime value
or CLV. Do some research on what CLV means and then think about how a bank might determine a
new customers CLV. Remember, that CLV is prospective you are predicting how much profit you
can earn from this customer.
4. How might you build a profile of the typical type of customer that the bank would like to target? Take
a look at the information provided at the bottom of p. 5, the top of p. 6, and the reference to CRM on
p. 7 to think about what sorts of information would go into creating this profile. Think also about how
avoidance of Type I and Type II errors might guide your decision making.
5. In the software world, we have become used to the concept of bundled pricing. When we buy MS
Office, we buy (and pay for) multiple products at the same time, even if we dont end up using them.
Is it feasible for a bank like Bankinter to use bundled pricing for its products and services as part of a
customer acquisition strategy?
6. Chargebacks are mentioned on p. 3 of the case chargebacks are a way for the parent bank to charge
the e-banking division for the services that are consumed on its behalf. What do you think about this
way of capturing and recovering costs? Is it a good idea? What risks might arise from using this
method to capture the costs of IT operations in general?
7. Is the Internet the great equalizer that it is believed to be, making it easier for the little guy in this
case, small community banks or relatively unknowns like Bankinter to compete with major banks?
8. How would Bankinters customer acquisition strategy benefit from adding account aggregation to its
service offerings? (Hint: log on to Yodlee.com to see how account aggregation works).
9. Critique Bankinters portal strategy as described on p. 6 and p. 7. Contrast their portal strategy with
what they have done with e-collaboration. How are portals different from e-collaborators?