Every year it’s a battle to win approval for your business
plans. This process, though far from perfect, is a necessary evil to ensure
that only the most promising plans are funded.

Online banking, which in the U.S. generates little direct
revenue, often requires creative spreadsheeting to show a positive
NPV. Following are some of the positives to incorporate into a winning
business case.

•       Stay competitive: improving account retention and
  increasing sales

•       Improve sales by differentiating your products and
  services with online functionality

•       Increase cross sales, especially credit/loan
  products

•       Increase online banking and bill payment
  transaction fees

•       Create a new stream of monthly and/or annual
  service fees with a premium service option

•       Use marketing dollars more effectively through
  targeted online promotions

•       Reduce costs through self-service

•       Improve customer satisfaction, retention, and
  cross sales

Allocating scarce budget dollars

If you are looking for the biggest bang for your buck, look
to online lending and small- and micro-business initiatives. According to
Celent’s study across 1.5 million Digital Insight users (in 2001),
online lending generates four times the combined value (NPV) of banking/bill
pay. Business services were even more valuable, resulting in returns of
nearly six times that of banking/bill pay.

Everbank made a sizable investment in a new online
banking platform, a highly customized mix of Metavante and Teknowledge
software. Previously, the bank used the S1 online banking platform.

Table 1

NPV from various online banking products

Source: Celent, 10/01  For a better understanding, read
Celent’s Customer Retention and Cost Savings Drive Online Banking ROI,
Oct. 17, 2001
(1) NPV over 5 years at a 50,000-customer bank; includes direct revenues,
cost savings, and retention. (2) Per-customer figures are across all
customers, on- and off-line, consumer and small business.