Online Brick and Mortar: Building the Virtual Relationship

Online providers continue to challenge brick and mortar distributors in financial services. From insurance to banking, to brokerage and even investment management, the ubiquity of technology, and the public’s growing comfort level with it, have buttressed the positions of both established and startup online competitors.

Traditionally, the primary attraction of online service delivery was lower cost to the consumer. Here we think of discount brokerage or cheaper car insurance. A second factor was convenience. The ability to purchase is just a few clicks away and you never have to leave the comfort of your living room.

Low cost and convenience are still the core elements of most online providers’ value propositions. But innovative firms are increasingly delivering these benefits through platforms that are specifically designed to build “virtual relationships.” This expands the appeal of electronically mediated consumption to what might be termed the “independent market,” those who appreciate and value “in person” service and access, but who are not wholly uncomfortable with going online.

One such innovative firm is Simple, a fast growing 2009 online bank start up recently purchased by BBVA. Simple provides online transaction services with no fees. Convenience and low cost are key benefits. But Simple goes further. Through a modern and very Apple like platform, including easy to use Apps for mobile devices, the firm adds appealing features that simplify making transactions and allow rudimentary but useful budgeting through creative reporting. Simple also provides a distinctive debit card as well as direct money transfers to other Simple clients. And they offer access to actual human customer service representatives if help is needed.

The combination of simplicity, a clearly defined offer, community, low cost and a more client-centric product add up to a “virtual relationship” that may be enough to attract those still on the fence about going fully online.