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					                           Liberty Case (Summary)
    Source: Cronin, Mary J., Banking and Finance on the Internet, Editor,
    (NY: Join Wiley and Sons, 1998) pp. 107-136
    Chapter Four: From Web Strategy to Implementation at Liberty Financial
    Companies.
    Authors: Iang Jeon                    Liberty Financial Companies
              William P. Rice             Liberty Financial Companies

                         From Web Strategy to Implementation at
                               Liberty Financial Companies
    Liberty Financial Companies: is a Boston-Based assets management
    organization.
                       Managed $48 billion of financial assets on
    behalf 0f 1.5 million investors world wide.
    Services           fixed investment
                       Indexed investment
                       Variables annuities
                       Private & individual assets
                       60 mutual funds
                                       www.Lib.com
                               A large complex Organization
                                       -     
                                  New Strategic Direction
                                       -     
                Decision to engage in electronic commerce on the Internet

    Chapter Objectives: examines the factors that directed liberty financial
    management to adopt an aggressive and forward-looking electronic commerce
    strategy.

                                 The Trust factor

   The required trust between the client & the asset management company based
   on a combination of objectives & intangible factor.
1-     The overall reputation of the company,
2-     The past investment performance of the product.

                                        Reliability


                             Trust           Performance


-     How to build & adopt trust relationship through the new technology
      Jeon, Iang & Rice, William P.: From Web Strategy to Implementation at Liberty Financial Companies

-      Example: Consumer Acceptance ATM & Website on the Internet
-      The company has been offering their Mutual Funds services since 1932.
    This long-standing track record, is not enough for customers to automatically
    shift their trust in liberty traditional services onto the new & still largely
    untrusted platform of the WWW.

   A decision for Electronic Financial services requires the highest level of
   protection for the customer's.
1-                       Privacy protection.
2-                        Financial Assets protection.
3-                       Commitment to consumer education
   & support.

    Balancing resources & Returns: Strategic Decisions:
    To build a secure EC programs, their conclusion was that the risk is not
    jumping into the Internet & developing secure applications it was greater than
    the expense of staking out a leadership position.

     The Internet may become the most important development in the financial services
                                  industry this decade.
    Financial Electronic Commerce Team:
    The team objective is to study the importance of electronic commerce &
    communication Via the Internet in every area of business & personal life.
    Financial services are an information business.
                (Financial transactions/transfer/investments/clearing)


             Security                                                             Trust
           Information                                                          Financial
              Leak                                                             Assets Value

    How to tailored the individual needs from the financial services by offering
    services through the Internet?
    Designing Web-appropriate products & services that would distinguish Liberty
    financial companies from the crowd was a fundamental requirement for
    achieving a competitive advantage through electronic commerce

   Two Liberty financial initiatives,
1-    WebSaver Annuity Financial Service
2-    LEAPS (Liberty Environment for Advanced Personalized Services)
   As to illustrate the company's approach to Web product development &
   implementation.



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       Jeon, Iang & Rice, William P.: From Web Strategy to Implementation at Liberty Financial Companies

                Web Saver Annuity                              www.webSaver.com
     Annuities, which are insurance products designed for retirement savings, are
     highly price-sensitive products.
     A fixed annuity that allows customers to order policies on line from the
     WebSaver Web Site (Example: Retirement plan) policy.
     Their customer will funds the policy with a check sent through traditional mail
     to avoid potential security concerns that might hold back consumer acceptance
     of Internet Commerce.

     How to Open an Account:
1-        On-line application forms to be submitted to the Liberty Financial.
2-        The company opens an account for the customers and sends a payment
     slip with the contract through the mail.
3-        The purchaser then reads the contract, agrees to its items, signs the
     deposit slip, and returns it and the payment through mail.
4-        If the purchaser does not fund the account during 45 days, the account
     is closed.
5-        The liberty Financial also takes the advantage of e-mail to contact these
     potential customers shortly before the period expires.
     Liberty Financial uses not only the World Wide Web for WebSaver but also
     electronic mail to market the product effectively.

     Advantages of offering financial product through the Internet:
1-       The Websaver annuity cost little to develop and market.
2-        Liberty Financial found that it could provide an additional 1/2 to 1
     percent of income to customers because of lower acquisition and serving
     costs made possible by the Internet.
3-        Offering the Websaver directly over the Internet allowed the company
     to minimize sales and operating costs.
4-        Liberty specialists prefer to communicate with the consumers by using
     the e-mail instead of the telephone.
5-        Reducing the number of staff required to communicate with consumers
     through telephone from 30-40 customer support representatives during peak
     hours to 5 only representatives to handle in-coming calls and can turn
     around a large number of e-mail requests and orders quickly and efficiently.

     The Business Advantage:
     1- Traditional Annuities cost on average 8%
-             distribution
-             commissions to broker or insurance agent
-             marketing materials
-             wholesale efforts




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      Jeon, Iang & Rice, William P.: From Web Strategy to Implementation at Liberty Financial Companies
   The few traditional annuities that are sold as direct-marketed annuities use
   newspaper and television ads, telemarketing backup (those costs can run 4 or 5
   percent) in terms of acquisition costs.
   2- With WebSaver, Liberty Financial attempts to lower the acquisition costs to
   between 1 and 2 percent.
   Cutting the cost by 2% and put it back into the product in terms of a higher
   yield. That in turn makes the product more desirable to the consumer.
   3- The Web gives the potential customers the credit to buy the product, simply
   by shortening the buying process and presenting essential information to them
   immediately.
   4-Reducing the number of printed publications required to support the
   marketing of new financial services.
   5- The Web site has an educational function. Through the WebSaver the
   potential customers can learn about annuities. Tax they have to pay.
6-     Calculate the required annuity to customers quickly.
   Example: If a customer required retiring before 59 1/2, current rules call for a
   10% penalty. The Web site is able to show the return, with the 10% reduction
   for early withdrawal.

    Marketing On Line and Measuring Customer Response:
-              Press (Wall Street Journal, Business Week, & USA Today).
-              Logging up to the site increased. Visitors increased on
    monthly bases from 1264 visitors into 7425. Once banners ads started
    appearing on the Web, the number of individual visitors jumped to
    48498 and kept on climbing.
-              On the Web advertising campaign.
-              WebSaver was positioned and lunched as low-cost electronic
    pilot program funded on an experimental basis by the corporate
    marketing budget.
    The previous benefits were sufficient to justify the WebSaver business model in
    and of it.
    Whether this type of product would meet the needs of customers?
    The Internet offered significant business opportunities that would justify a
    corporate wide priority for electronic commerce.
    The next steps were more complex and required an overall corporate investment
    to create a major advance in security and customer value on the Web.

                         Trusted Commerce takes Off: LEAPS:
    LEAPS: Liberty Environment for Advanced Personalized Services: A platform
    for implementing the company's broader vision of the value of Electronic
    Commerce and Web business models for entire organization.
    Like WebSaver, LEAPS was implemented as a real business product and also as
    a prototype for creating a new line of products and services that were intended
    to take full advantage of the interactive and customization capabilities of the
    Web.
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       Jeon, Iang & Rice, William P.: From Web Strategy to Implementation at Liberty Financial Companies
     The idea is to offer personalized, interactive experiences to their investors and
     the intermediaries who serve them.
     Putting Info on the Internet about one's company and letting customers to
     respond by telephone or by e-mail.
1-        Secure transactions and personalization.
2-        Use the latest technology to ensure true customer relationship
     management.

     The LEAPS project is based on the fundamental premise that personal
     computer use and Internet access are going to become mainstream.

     Target market: Designed for the early majority, the 35 to 40 million who will be
     on the Internet in the near future.
     Features:           - Ease to use
                        - Ease of navigation
                        - Lower barriers of entry

          Beyond Secure Transactions to Integrated Financial Services:
     Important Result in the market:
     Financial transactions on the Internet will become a standard service very
     quickly, and such capabilities will not provide a differentiating competitive
     advantage to fund companies over time.

     To keep ahead of the Web development curve and address the various
     distribution channels represented by its operating companies, Liberty Financial
     needs maximum flexibility in design and operations of its electronic commerce
     program.

     A Framework for Rapid Project Development:
     The LEAPS try to introduce new electronic products in an innovative approach
     to face competitors.
     The team focused on the identifying the business applications most likely to
     advance Liberty Financial's Leadership position in the filed and then designed
     functionally around these to avoid being driven by the technology for its own
     seek.

     As a result of this approach, Liberty now has an objective-oriented system
     environment with the user interface, business rules, and various applications.

                  Personalization: The Next Generation of Services:

     In the future, individuals will most likely be building their own, completely
     personalized Web sites. The company will have a single Web page graphic,
     coupled with a choice of options. The individual user can pick and choose what
     to put on that page.
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       Jeon, Iang & Rice, William P.: From Web Strategy to Implementation at Liberty Financial Companies
     Examples from the First Launch Sites:
1-      Account access
2-      Transactions
3-       Back-end information inquiry
4-      Interactivity
5-      Customization
6-       Sales support
7-      Financial content

     Measuring the value for Liberty Financial and its Operating Companies:
     The real bottom line of the LEAPS project is, making sales. This is an electronic
     commerce effort grounded in retaining for technology's sake.

   Key objectives are as follows:
1-    Increasing financial assets.
2-     Serving customers.
3-     Lowering costs.

        A leadership strategy for electronic commerce cannot succeed
        based on any single capability or services on the Web, but
        positioning Liberty Financial Companies to be the most advanced,
        secure, integrated, and value-added financial services provider on
        the Web is a goal aimed at keeping Liberty at the forefront of new
        developments in electronic commerce. The lessons from
        implementing WebSaver Annuity and LEAPS will help to keep the
        momentum strong.




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