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Case | HBS Case Collection | November 2000 (Revised May 2002)

FleetBoston Financial: Online Banking

by Frances X. Frei and Hanna Rodriguez-Farrar

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Abstract

As the ninth largest bank holding company in the United States in 2000, FleetBoston Financial Corp. provided a myriad of financial services, including retail banking, loan origination, and brokerage accounts. This case explores how FleetBoston responded to the Internet and the rise of new competition from both within and outside the banking industry. The majority of the case acquaints students with how customers interact with financial services, how these firms make money, and what are their challenges and opportunities. The majority of retail banking customers are unprofitable, making for a unique operating environment in which innovations are consistently aimed at reducing costs. Because customer behavior contributes directly to costs, innovations center on providing lower cost channels for customer transactions. Unfortunately, each new channel increases overall costs, and banks are still faced with reducing costs. In addition, the Internet has given rise to new competitors, many with lower cost structures and revenue potential outside banking.

Keywords: Business Model; Borrowing and Debt; Cost Management; Banks and Banking; Consumer Behavior; Service Operations; Competition; Online Technology; Banking Industry; United States;

Language: English Format: Print 16 pages EducatorsPurchase

Citation:

Frei, Frances X., and Hanna Rodriguez-Farrar. "FleetBoston Financial: Online Banking." Harvard Business School Case 601-042, November 2000. (Revised May 2002.)

About the Author

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Frances X. Frei
UPS Foundation Professor of Service Management (Leave of Absence)
Technology and Operations Management

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More from the Author

  • Case | HBS Case Collection | November 2001 (Revised October 2017)

    GuestFirst Hotel (A): Customer Loyalty

    Frances X. Frei and Dennis Campbell

    Provides a hotel context in which to explore the link between customer loyalty and financial performance, using four years of hotel data. Challenges students to find the extent of the relationship between loyalty and performance.

    Keywords: Motivation and Incentives; Mathematical Methods; Finance; Performance; Relationships; Customer Focus and Relationships; Data and Data Sets; Accommodations Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (A): Customer Loyalty." Harvard Business School Case 602-099, November 2001. (Revised October 2017.)  View Details
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  • Supplement | HBS Case Collection | November 2001 (Revised October 2017)

    GuestFirst Hotel (B): Taking Advantage of Panel Data

    Frances X. Frei and Dennis Campbell

    Supplements the (A) case.

    Keywords: Accommodations Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (B): Taking Advantage of Panel Data." Harvard Business School Supplement 602-111, November 2001. (Revised October 2017.)  View Details
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  • Case | HBS Case Collection | October 2001 (Revised October 2017)

    Pilgrim Bank (A): Customer Profitability

    Frances X. Frei and Dennis Campbell

    Provides a context in which students can explore managerial decision making that is critically informed by data analysis. The setting is a retail bank and the decision making relates to the bank's policy toward online banking. The management team is evaluating whether the bank should charge for access to online banking, provide incentives to use the service, or devise some other policy altogether. With thousands of customers already using the online site, the bank is well positioned to assess the impact of the service on customer profitability and retention before making final policy decisions. Told from the perspective of a recent MBA graduate who was charged with performing the necessary data analysis and ultimately coming up with policy recommendations.

    Keywords: Banks and Banking; Customers; Profit; Banking Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (A): Customer Profitability." Harvard Business School Case 602-104, October 2001. (Revised October 2017.)  View Details
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