Internet banking: from new distribution channel to new business models

摘要

This paper examines the evolution of internet banking in the UK. Today, most banks have adopted the so-called multi-channel strategy where the internet is one of many channels through which customers can conduct their banking. However, this strategy can be implemented through different business models and it is only effective when combined with new strategic thinking, business processes and product and service offering. A review of existing studies on internet banking highlighted two prevailing scenarios based on two distinctive sets of strategic thinking. In this context the paper identifies eight models of internet banking based on recent empirical evidence gathered in the UK and highlights several emerging issues. The paper concludes that the increasing deployment of the internet and related technologies is shaking the foundation of the banking industry. Simply deploying the internet as a more efficient distribution channel will not bring sustainable strategic advantages. To compete effectively, banks will need to embrace a new set of strategic thinking, based on the 'unbundling' of banking services and processes and the 'deconstruction' of the integrated banking model. Such a transformation will threaten the profitability and survival of some incumbent banks and at the same time, bring a cohort of new opportunities and powerful new players to the market. The dominant view from the industry is that a further shake-up of the banking industry is inevitable and a review of existing strategies and business models is urgently needed. The paper will outline a new framework for banks and other financial organisations in developing and evaluating their strategies. This is still a rapidly evolving field and some themes for further research will be highlighted.