Now that financial institutions are interacting with a substantial portion of their customer base online, it becomes feasible to cross-sell niche products that don't necessarily have broad appeal.

One relatively untapped area is insurance, especially products outside the highly competitive term life and auto market. For example, in today's Wall Street Journal Family Finance column, Jennifer Saranow discussed new all-in-one insurance policies combining auto and homeowner coverage.

Other possible insurance offerings that might interest your online customers:

• Small business coverage
• Umbrella liability
• Combination credit insurance that covers multiple loans and revolving balances under one policy
• Bill insurance that would pay all previously scheduled bills for a defined period

Analysis
As any insurance sales rep can tell you, it takes time to build an insurance clientele, but once built it can be quite lucrative.

For example, if you could sell a new policy to just 1% of your online banking customers each year, by the end of 10 years you'd have 10% penetration (ignoring attrition for the sake of simplicity).

If you had 25,000 online banking subscribers and you earned $100 per year per customer on insurance, by the end of the decade you would be earning $250,000 per year from your online insurance business.

While that may not be a huge number, if you put together a half-dozen niche-product cross sales programs, you could soon be earning $1 million or more per year; money you wouldn't have had without the online channel.

We'll get back to this issue in future articles.

--JB