NexityEssay Preview: NexityReport this essayPROBLEM STATEMENTNexitys major problem is their competitors size in the banking industry. Nexity is relatively small compared to their major competitors. Virtual banks, such as Nexity has only captured 2 percent of the total U.S. banking market share thus far. Nexitys lack of market share and brand awareness within the banking industry is a major concern of theirs. Nexitys problem is how they are going remain successful in the banking industry, increasing their market share, and grow within the banking industry. Nexitys competitors have the capability of offering the same products, with better customer service.
While the convenience and great rates were attracting to some online consumers, Internet-only banks, such as Nexity had suffered pitfalls stunting their growth. The lack of person-to-person contact forced consumers to resolve problems over the phone or via e-mail, which could be frustrating for some.
Concern over deposit and cash still limited the convenience of Nexity. For customers without direct deposit capabilities, mailing checks to Nexity was the only means of depositing money. Waiting for deposits to be posted could be an inconvenience for customers. Nexity also has no ATM network and no branches, requiring customers to use other banks ATMs, or by using cash-back services with debit cards. Nexity reimburses consumers $2, for four monthly trips to foreign ATMs. Customers have to cover the cost of using foreign ATMs exceeding four uses per month.
Nexity also faces an increase in rivalries. By examining Nexity within the banking industry rather than the online banking industry, we see the intensity of competition in the banking industry is increasing. The growth of the internet in the last six years, has forced many brick-and-mortar banks to consider and develop online banking. Most online accounts are held at the online divisions of brick-and-mortar banks. Of the top 10 banks in each of the 35 largest markets, more than half offer online access, according to data service Bankrate.com (The Truth). Now customers can get the best of both worlds. They are able to complete transactions both via internet or walking into brick-and-mortar banks themselves. If a customer happens to have a problem with their online banking, the customer is able to walk into their brick-and-mortar branch and talk to a representative from the bank face-to-face, which at times can be more convenient than talking to a representative from their call center or waiting to hear back from an e-mail.
It is much easier for a brick-and-mortar bank to develop an online banking system than it is for an on-line banking system to develop a brick-and-mortar banking structure. The capital required to develop brick-and-mortar banks are far greater than that of developing an online banking system.
Another minor problem that Nexity faces is that they are unable to reach the entire consumer market. Consumers without internet access are more inclined to open up an account at a brick-and-mortar bank, rather than to open a virtual banking account. According to a survey released by the Pew Internet & American Life Project the number of U.S. adults with access to the internet is 104 million or 56 percent of U.S. citizens. This gives brick-and-mortar banks the upper hand.
ALTERNATIVESNetflixs major concern is how they are they going to compete with their larger competitors and grow in size. Netflixs generic strategy is best-cost provider – giving customers more value for the money by incorporating good-to-excellent product attribution at a lower cost than rivals; the target is to have the lowest (best) costs and prices compared to rivals offering products with comparable attributes (Thompson Jr., 116). Service, coupled with a breadth of competitively priced produces, has been Nexitys strengths. For example, E*Trades annual percent yields (APYs) for their checking, one-year CD, and money market were 1.01%, 1.44%, and 1.11%, respectively in 2003. Whereas Nexitys rates for checking, one-year CD, and money market were 0.75%, 2.11%, and 1.75%, respectively in 2003. (Thompson Jr., C172). The following are alternative solutions for Nexitys problems:
Expand servicesForm strategic partnership with an outsource vendorExpand correspondent banking domesticallyExpand internet banking internationallyAcquire a brick-and-mortar banksForm strategic partnership with real estate companyExpand ServicesNexitys product offerings are: interest checking accounts, home equity lines,home equity loans, online bill paying, savings, IRA CDs, money market accounts, and mortgages, but do not include insurance. Approximately one in four households are completely without coverage. Many families that do have insurance get it through their workplace. Because they depend on their employer for coverage, they could find themselves uninsured when their family can least afford it, such as a layoff or retirement. Only 53% of Americans own any kind of life insurance making the market underserved and under penetrated (Thomas). With Nexitys low overhead cost Nexity will be able to offer insurance to their customers at a better rate than insurance companies, keeping their best-cost generic strategy. Selling insurance will also open the opportunity to cross-business, allowing Nexity to become a first-mover in offering insurance online. Nexity being seen as a first-mover will increase consumers brand awareness and brand recognition.
Form strategic partnership with an outsource vendorForming a strategic partnership with an outsourcing vendor such as Fiserv, Satyam, or Cognizant will enhance Nexitys chances for success, domestically. Fiserv provides comprehensive, integrated solutions to financial institutions in either a Service Bureau or Resource Management processing arrangement. Fiserv ITI (Information Technology, Inc.) Outsourcing provides resource complements in the areas of Client Training, Applications Conversions, Specialized Technical Support, Electronic Banking Support, Network Support, Clients Services and Relationship Management – all combined to deliver proven, state-of-the-art, one-stop shopping for data processing needs (www.Fiserv.com). Fiserv will provide all the technology Nexity needs to run its operations; from deposit accounts, to loans, to general ledger, and to check processing. Fiserv
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Forms Strategy with a Center and Center Center will connect a large IT hub with a highly advanced business operation to the global customer. The Center will provide a comprehensive network of connected data centers across India and China for the long years to come. We support high-speed connected internet technologies, enabling customers to transfer their data by simple digital transactions, without relying on special cable, DSL, or telephone cables.
This partnership benefits all of our partners. Although this partnership is not only based on our company identity and technical solutions, we also are actively working with other IT players in the field, such as SAP, Dell, and IBM. We are currently working with Cisco to develop the Cisco Connect app for business-in-class smart home devices such as the Cisco MyCamc, and Intel Power, with the potential of enhancing the Connect platform. The Cisco Connect app will make it easier for customers to connect their tablets and PC connected devices to their online data, thereby enabling the global market to respond to changes in consumer demand and cost.
Customers who want more information about how to setup a secure database of customer data can now use the secure webinar to:
provide a quick overview of current state of the art security techniques; to analyze how the security vulnerabilities are exploited.
demonstrate the current state of security techniques and how the security vulnerabilities are exploited, including:
the ability to successfully run a network attack for more than 48 hours on multiple servers in a large system with 4GB of RAM or less;
how to secure the sensitive data in each server
and how to gain access to the sensitive data in each server
How to setup the secure network (network manager)
a demonstration of the current security protocol
and how to develop a “secure” network protocol to avoid problems.
The Webinar will cover:
the basics of securing customer data between vendors;
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how to use secure network functions to support security for the data center providers;
the various methods and techniques for creating data synchronization to protect customer data;
the methods and techniques for creating secure data for customers (including the “security” layer);
how to create secure data for the customer using secure network function authentication;
the methods and techniques for the secure communication of customer data via secure network functions; and
the details of how encryption is provided in code
and how to secure customer data that are encrypted in “code mode”. The following presentations will provide examples of how to run a successful test on secure network to achieve a maximum exposure with the secure network code and how this can be managed in both a client and non-client setting.
FIServ Online Solutions
Forms Technology, Inc.
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Provides top notch analytics solutions to ensure a safe and secure data center. FIServ is a top technology partner focused in both IT and retail solutions for all of our partners of all sizes in providing top notch solutions, spanning from customer data analytics and enterprise data assurance, to security data security to IT and business data governance and corporate data compliance.
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