Abstract

Banks gain their main competitive advantage by designing the client-bank relationship. This becomes even more important as customer behavior changes and the internet enables new business models. This paper aims to analyze the potentials and application fields of Web 2.0 applications in private banking by developing a suitable classification system. Typical classification systems of Web 2.0 applications differentiate functional types of applications such as blogs, wikis, social networks or mash-ups. This paper suggests a user-related scheme that differentiates internal and external Web 2.0 applications and thus is aligned along bank's and customer's processes. Additionally it enhances published classifications by adding third party Web 2.0 applications as a further main category. Hence it supplements the existing functional classification system by clearly distinguishing the application owner, the interaction sphere and the communication parties involved. It aims to support researchers and practitioners to gain a holistic overview of potential Web 2.0 application fields in the external communication with clients, the internal communication among employees, and of third party Web 2.0 applications relevant to their business. An example of the world's second largest wealth manager, UBS, unveils the relevance and potentials of Web 2.0 applications along the classified areas. While the usage of internal Web 2.0 applications at UBS seems to be advanced, the use of external and third party Web 2.0 applications is still in the fledgling stages. The third party applications seem not to pose a competitive threat to private banking at present, but future changes in the competitive environment might arise, not least through younger, more internet literate clients and shifting customer behavior.

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