Correspondence: Hernan Riquelme, PO Box 9678 Salmiya, 22097 Kuwait. Tel: +965 2517091/2/3/4; E-mail: hernan@kmbs.edu.kw

¹is a professor at the Kuwait-Maastricht Business School. He graduated with an MBA from Texas Tech University and a PhD from Manchester Business School, University of Manchester. He has conducted research in e-commerce, mobile commerce, Internet banking and, more recently, media convergence.

²is the Director of Operations at the School of Management, RMIT Business. He holds a PhD from the University of California at Los Angeles. His research interests include logistics risk management, green supply chain, e-loyalty, transport modelling, and accident analysis.

Received 23 August 2006; Revised 23 August 2006.

Abstract

This study examines factors affecting online conversion success of financial institutions in Australia. Twenty financial institutions (nine banks and 11 credit unions) were divided into four clusters based on the size of their client base. A cross-case comparison of the financial institutions in each group was then qualitatively analysed with respect to the joint effects of six variables on online conversion rate: banking practice, cost-efficiency, online banking experience, online product and service portfolio, response time to online queries, and branch network. Results of the comparative analysis show that the recipe for online success lies in getting the right combination of variables. To achieve an online conversion rate of no less than 25 per cent, financial institutions with a client base exceeding 100,000 need to have attained a cost-to-income ratio of no greater than 0.55, have three or more years of online banking experience coupled with a branch-to-client ratio between 1 and 2 per 10,000 customers. For credit unions with a client base of less than 100,000, the corresponding criteria are having a cost-to-income ratio of no more than 0.67, a response time to online queries of 3 h or less, and no less than four years of online banking experience.