Nexity and the U.S Banking Industry

1. The chief economic characteristics of the online banking industry for those using only Internet banking the leading factors that affect their decision of banking online are security, convenience and rates. With regards to the economic characteristics the main difference with online banking is that the rates tend to be higher for those companies that only offer Internet banking and no branches. Some of the other economic characteristics might be that all the banks are beginning to offer online banking, which makes it easier to conduct different types of transactions such as bill payment; money transfers and keeps track of your accounts individually. The online banking industry is one that is in the stages of development they are still very new and not many people feel safe and secure in using online banking as there are many threats to the transactions such as hackers and identity theft.

2. The online banking industry is rapidly changing as the number of customers that are beginning to use their services is increasing. This is due to convenience and that they are able and manage their bank accounts 24/7 this provides flexibility for those customers who are not able to go to the banks during the daytime. The online banking industry is also changing in a way in which they are offering more secure transactions and are secured and the transactions are guaranteed by the federal government. Also many banks offer protection against identity theft in the form that if you notice that purchases were made and you didn't make these purchases they will refund your money to your account and take it upon themselves to further investigate the matter. This creates a sense of reliability and responsibility of their customers and they are able to make transactions feeling secure that their identity is not in jeopardy. Also the demographics are changing and as the baby boomers are now retiring and are getting more technologically adapted then they too are beginning to use online banking as it is convenient to a lot of people who are disable and are not able to go the branches to do certain transactions. Also as a new generation of individuals enters the workforce they are more technologically equip to use online banking and are more comfortable with its service.

3. What I liked about Nexity's strategy was that they were able to recognize that they were targeting a niche market and decided that if they did only focus on a small geographic area that it limited them only a certain amount of customers. They were well aware that other online banking companies had focused on specific market niches and demographics such as E*trade which focused on security traders and G&L Bank which targeted the gay and lesbian community. They decided that they couldn't focus on just one specific group so they went ahead and offered their niche service to the entire nation. They were able to do this with very successful online advertising and the help of print ads in such newspapers as The Wall Street Journal and The New York Times. This created many opportunities for them as it made them the lead players in the online banking industry. In their advertising the offered customers a number