Connected Commerce Gives Banks the Opportunity to Strengthen Relevance and Gain New Sources of Revenue

NEW YORK, NY and SAN JOSE, CA -- (Marketwire) -- 09/29/08 -- Important consumer segments such as baby boomers trust online payment providers more than they trust traditional banks, according to a survey on retail financial services recently conducted by the Cisco® (NASDAQ: CSCO) Internet Business Solutions Group (IBSG). Consumers are demanding the same convenience they receive online when shopping in a brick-and-mortar environment. This dramatic shift in consumer expectations presents a considerable market opportunity for financial institutions that embrace connected commerce. The average incremental value of connected commerce for the top 20 U.S. banks is estimated to reach more than $100 million yearly by 2015. For more information on the Cisco IBSG retail financial services survey, please visit www.cisco.com/go/ibsg/financialservices.

In an effort to help clients stay competitive and increase their profitability, Cisco IBSG, the company's global strategic consulting arm, surveyed more than 1,500 consumers to better understand how their behaviors and perceptions shape the evolving commerce landscape of shopping and payments. By monitoring what innovative companies are doing to attract and retain customers in retail and related industries, Cisco IBSG helps financial institutions take advantage of leading, innovative practices to remain relevant.

The research reveals that evolving customer preferences among all age groups represent both a challenge and an opportunity for financial institutions. As consumers increasingly use the Internet and mobile devices to make purchases and payments, banks are subject to both customer attrition and revenue loss. The research also shows, however, that banks can reverse this trend and use their connections to merchant and consumer payment data to create new revenue models from advertising, cross-selling and value-added services surrounding points of sale.

"Retail financial institutions are uniquely poised to enable the next evolution of connected commerce," said Jim Greene, vice president and global head of financial services, Cisco IBSG. "The profound shift in consumer shopping preferences, coupled with the pervasiveness of the network, presents a tremendous opportunity for financial institutions to evolve from simply being a provider of the payment element of a purchase, to being a uniting factor among consumers, merchants, advertisers, product manufacturers and payment providers."

Consumers Prefer the Online Channel

Historically, the online shopping experience was designed to imitate the brick-and-mortar experience.