Analysts from Forrester Research wrapped up its recent Finance Forum with a panel discussion, sharing their insights on the current state of online financial services.

Here are brief summaries of some of their observations and recommendations: o As part of the industry-wide cutback, many financial companies are tightening their e-commerce budgets and are leaving Internet projects in the hands of their chief information officers. This will turn out to be a mistake in the long run because online businesses, when managed by CIOs, tend to become IT projects, and not consumer-oriented projects as they should to be. o Despite the market slowdown, financial companies shouldn't reduce their online budgets too drastically. The economy is going to recover in three to five quarters, and firms that continue to support Internet projects now will reap the benefits later next year. o When choosing technology vendors in the current environment, financial companies should pick established firms with the strongest balance sheets and largest customer base. This is not the best time to pick start-ups with great ideas but little business foundation. o A recent Forrester survey of 2,500 investors found that declining stock market performance had little impact on people's preference for wealth management style. Investors who demanded personalized attention from financial advisors last year remained that way, while those who liked a self-directed management style also held onto their preference. o Most consumers do not find wireless stock trading to be a compelling financial product. Its appeal will mostly be limited to highly active traders. o E* E*Trade Group will gain momentum, make further inroads into banking services and become a threat to more established financial institutions.

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