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Home > Library > Stable Times > Volume 3, Issue 2  The quarterly publication of the Stable Value Investment Association Second Quarter 1999 • Volume 3 Issue 2 Electronic Commerce in the Traditional GIC BusinessBy John Milberg, Senior Vice President, Pacific Life Insurance Company Are traditional GIC buyers and sellers embracing electronic commerce? The answer to this question was sought in a recent confidential survey conducted by the SVIA. The survey was sent to 17 stable value issuers and to 22 stable value buyers. Responses came from 90% of the recipients. The survey answers provide insights into the current transactions performed on the web, the motivations driving web growth, and respondents' future plans for increased web use. Today's Internet use is concentrated in the transmission of data via email. 93% of the issuers and 83% of the buyers currently transmit and accept bid specifications via the web. 53% of the GIC issuers and 67% of the buyers use the Internet to communicate contract rates and terms. Fund accounting statements are transmitted by 40% of the issuers, whereas 25% of the buyers receive fund accounting statements over the net. In addition, once a sale has been made, one-fifth of the issuers admit to transmitting contract documents via the Internet and one-half of the buyers accept them electronically. Other uses mentioned include the communication of bid results, contract language revisions, and daily rates. What factors have lead to the wide spread adoption of e-commerce? Both the issuers and the buyers agreed that the web's efficiency was a major factor in using the web. In addition they mentioned the ease of web implementation. Where issuers and buyers diverge is in being pressed to provide web functionality by their customers. 87% of the issuers say their customers pushed them to web use. In contrast, none of the buyers mentioned customer preferences as a factor. Somewhat surprisingly, competitive pressure was not a significant factor for either buyers or sellers. As for the future, both issuers and buyers expect their use of Internet technology to increase, and those who are not using it today, will probably do so in the future. For the GIC issuers, eleven (92%) of the 12 current users expect their business use of the Internet to increase. For the GIC buyers, twelve (80%) of the 15 current users expect their business use of the Internet to increase. Of the eight respondents (both issuers and buyers) currently indicating no web use, three expect to transact web business within 12 months. In summary, today's Internet use is concentrated in the transmission of data via email. The future will no doubt bring on-line shopping and buying into the picture. Both issuers and buyers expect their use of Internet technology to increase in the near future, and those who are not using it today, will probably do so soon.
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