Internet banking brand strategies amongst German commercial banks since the 1990s

Abstract

Purpose In the mid-1990s, market demands for around-the-clock (24/7) banking and financial transacting began to converge with advances in internet-based technologies. This confluence of forces gave rise to the birth of internet banking. Building upon the relevant literature, this paper aims to develop a set of propositions to address the following questions: what brand strategy or strategies were used at the birth of internet banking roughly 25 years ago? In the years since then, have merger and acquisition transactions involving internet or “direct” banking businesses only come to fruition where the direct bank was previously under a specific brand strategy? And finally, where there have been changes in internet banking brand strategy, have these invariably been in the ultimate direction of one particular brand strategy? Design/methodology/approach Because of the exploratory nature of the research question, this paper uses a case study examination as the research approach. In addition to gaining deeper insight into issues involving internet bank branding as these actually existed, this paper aims to propose preliminary and tentative conclusions that can later be tested empirically with larger sample size. The case studies specifically examine German commercial banks with direct bank businesses. Findings In the examination of the German commercial banks, this paper finds that their internet banking activities some 25 years ago were, in fact, never launched using an umbrella brand strategy but rather with a combined brand strategy or multi-brand strategy. Mergers and acquisitions (M&A) transactions involving internet-based direct banks were only consummated where the direct bank had previously been operated by the parent bank using a multi-brand strategy. Where the brand strategies of internet-based direct banks have been changed by their parent banks, this has invariably been in the direction of an umbrella brand strategy. Originality/value Within the marketing and banking literature, there are no in-depth examinations of internet banking brand strategies to be found. This paper, in addressing this research topic, marks the first full survey of German commercial banks with internet-based direct banking businesses. This survey, moreover, examines branding not only at the time that internet-based direct banks were first established starting in 1994 but also the subsequent development of internet banking brand strategies to the present day.