Americans have long been accustomed to a plethora of choices and customization for almost every type of consumer product. But in financial services, consumers still have to choose from mostly one-size-fits-all products.

Traditionally, personalization of financial products has been difficult to bring to the mass market because of its high cost. But many companies have been discovering that Internet can make the process more affordable and efficient. And according to Jaime Punishill, a senior analyst at Forrester Research, firms that do not embrace the new technology and personalize their products stand to lose millions of dollars from missed revenue opportunities and extra expenses. 'Most of the products currently offered by financial companies are substitutable and not at all tailored to individuals,' said Punishill, who recently spoke at the Forrester Finance Forum, Prospering Within eBusiness Networks. 'They need to customize their products and prices to improve the bottom line and to stop profit-margin decline.' Additionally, offering similar financial programs makes it easier for customers to switch service providers. According to Forrester Research, 21% of all mutual fund holders consider switching every year while more than 75% of mortgage borrowers change lenders when they choose to refinance. And credit card products, on average, are on the books for less than one year. But using the Internet to personalize financial services is no easy task, and many companies still fail to make their products stand out. 'For example, most customers we survey say that they can't see any significant difference between major financial Web sites,' Punishill said. 'Customers want more from these Web sites than just a personalized greeting when they log on. If online offerings aren't differentiated, it can further erode companies' margins.'

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