It took awhile, but financial institutions of all sizes have finally realized that investing in a full-service website complete with interactive marketing and registration functionality is critical to expanding their client base and increasing their total assets under management.

Unfortunately, according to a new report from Boston-based financial services research and consulting firm Aite Group, most banks and credit unions aren't making the necessary commitment to a comprehensive online marketing maturity model that would allow them to monitor, benchmark and evaluate the effectiveness -- or lack thereof -- of their online conduit to investors.

Whether a firm is just rolling out its online storefront or has been steadily building out and improving its websites for a decade, implementing an online marketing maturity model will increasingly determine which institutions attract and convert browsers to investors and which firms fall by the wayside as younger, more technologically savvy investors bring their investment dollars to the table.

"Until recently, there's been a bit of a Catch-22 situation with online marketing," said Aite Group analyst Ron Shevlin. "Banks haven't seen much in the way of online product applications so they have believed the online channel isn't a big source of acquisitions. The problem is part of what drove that was the fact that many banks either didn't offer online product applications or didn't offer effective online product applications."

Shevlin said banks and broker-dealers have changed their tune in recent years as more Gen X and Gen Y investors have joined the fold, seeking to either apply for or research new investment products. Thus far, however, most firms are playing catch-up to the online-only firms like ING Direct who have invested their time, money and efforts exclusively on the online channel.

"But despite this increased focus on the online channel, many financial institutions have limited experience and skill sets for marketing online," he added.

For a little perspective, Aite Group back in 2006 predicted that banks would need to become "considerably more effective" with online marketing to fend off looming competition on a number of fronts, particularly from online-only financial institutions.

Five years later, after surveying 74 financial institutions, including 12 of the 25 largest retail banks and 50 credit unions, Aite analyst concluded the majority are "under investing in online marketing and digging a hole for themselves that may jeopardize their overall marketing effectiveness."

Among banks and credit unions queried, the report found that less than half currently have targeted banner ads or email messaging built into their websites. Only 25% of these sites have the capability to intercept messages after customers log into their accounts and fewer still integrate their existing customer relationship management (CRM) systems with their online marketing applications to provide what could be some extremely valuable, holistic data that could be used to sell new investment products and services.

To turn all this readily available data into something useful, Aite Group recommends financial institutions install the same kind of capability maturity model found in other industries and business development processes to wring as much value out of their online presence as possible.

By focusing on the demand generation, demand conversion and account creation processes -- and thoroughly and objectively evaluating each component at every step along the development path -- financial institutions will no longer be flying blind when it comes to their online marketing and sales activities and have a manageable platform from which to recommend, budget and execute improvements.

Each process is evaluated in comparison to competitors as well as internal performance metrics to determine whether it has matured to the point that it's either "optimized" -- incrementally fine-tuned, innovative and guided by formal, strategic decision-making -- "integrated," which means all the marketing activities related to the process are ingrained across all products, channels and organizational lines of business or merely "performed" -- essentially some of the features and processes are in place but there's no real strategic oversight or accurate measuring techniques.

Once this formula is in place, it's a matter of improving on each facet until the bank or credit union reaches a level of optimal performance across all three core processes.

"Financial institutions need a map to figure out what to do in order to build an online marketing capability," Shevlin said. "That's what the maturity model strives to be."