Interactive TV Strategies for Consumer Financial Services - A Brief Summary

In the past two years all major consumer banks have made investments in interactive television. Their strategies may have been defined by a desire to establish an early presence and build experience of operating on a new digital channel. They have typically developed "walled garden" interactive assets on some or all of the interactive TV shopping platforms.

Financial services should now be looking to evolve their iTV offerings. The following issues will have a crucial impact in the next 2-3 years:

- Growth of digital TV subscription will slow down. The impressive growth so far has largely been driven by the offer of extra programming channels and the subsidisation of set top boxes by platforms owners. The effect of this will begin to decrease through 2001.

- Most industry t-commerce forecasts are excessive. Projected revenue targets on most platforms will be missed – partly due to the slowdown in digital subscriber growth, partly due to the slow consumer uptake of interactive services and partly due to the general economic downturn.

- Platform technical capability is limited and upgrades are dependent on massive investment from the owners – many of whom are already debt-laden and experiencing decline in their traditional revenue models. A variety of problems, including limited return path capability, network congestion and low specification set top boxes will place constraints on the range and nature of interactive services available.

- Consumers seem particularly averse to conducting personal banking/financial transactions via the TV. Some recent studies by platform owners and independent groups have shown that a majority of consumers perceive the PC as being more suitable [The Pace Report - 2000]. This is not helped by limitations of using the TV as an interactive device. Specifically:
--The difficulty in using the remote control for complex functions
--The low penetration and slow response time of infra-red keyboards.
--Low resolution screens
--Slow interaction response on interactive TV

- Specialist design and usability approaches are essential to establish a presence in an increasingly cluttered interactive TV market. Sound consumer insight and profiling are also essential to rationalise the financial services offering and maximise returns.

- Emergence of enhanced TV formats will allow for immediate transition from the entertainment-oriented broadcast stream to the transaction-oriented interfaces. By using broadcast content to stimulate transaction, financial services will have greater access to an audience that is currently unaware of the services on offer.

Although many of the above points seem to take a negative view of prospects in this market, significant opportunities do still exist. Specifically:

- Growth and development of existing properties: To survive in a crowded interactive financial services platform, service providers need to conduct frequent usability testing and (through promotional screens and interactive advertising) maintain a high profile on the respective interactive platforms.
- Develop partnerships with broadcasters and content creators to ensure participation in emerging enhanced TV formats.
- Ensure integration of services and customer data across all digital channels and high street outlets.

Ultimately, the financial services that will achieve success with the medium are those that rationalise their approach by taking into account the changing consumer and technological environment for interactive TV.

Murray