Rivalry, Market Structure and Innovation: The Case of Mobile Banking

He, Zhaozhao

doi:10.1007/s11151-015-9466-z

Cited by 15 publications

(12 citation statements)

References 17 publications

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“…Banks are increasing their spending on technology, particularly on digital technologies that can directly improve customers' experiences. The implementation of new banking technologies affects customers (Campbell and Frei, 2010;DeYoung, Lang and Nolle, 2007;He, 2015;Hern andez-Murillo et al, 2010;Xue et al, 2011). While banks' IT investments are mostly allocated to digital technologies, there is no empirical evidence regarding the possible effect of these investments on the digitalization of the bank customer.…”

Section: Discussionmentioning

confidence: 99%

“…Some anecdotal evidence suggests that banks offer new digital services in order to strengthen customer relationships (Crosman, 2012). Moreover, it has been empirically documented that banks' implementation of new technologies affects their customers (Campbell and Frei, 2010;DeYoung et al, 2007;He, 2015;Hernando and Nieto, 2007). The provision of online banking is associated with higher customer retention rates (Campbell and Frei, 2010;Hitt and Frei, 2002;Xue et al, 2011).…”

Section: The Role Of New Banking Technologies In the Adoption Of Digimentioning

confidence: 99%

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The Effect of Banks' IT Investments on the Digitalization of their Customers

2020

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Banks all over the world are investing in new banking technologies at a time when bank customers are progressively going digital in several dimensions of their economic and social interactions. Together with their existing perceptions of digital services, new banking technologies may path the way to accelerate the digitalization of bank customers, thereby achieving private and social efficiency gains. This paper exploits the fact that banks' IT investments are mostly allocated to digital technologies to examine if such investments affect the digitalization of bank customers. The results show that banks' IT investments have a significant positive impact on the adoption of financial digitalization by customers. Banks' IT investments also increase the likelihood that bank customers undertake their financial transactions through digital channels rather than in the physical branch. This represents a change in the relationship banking channel. These findings shed light on the impact of banks' IT investments on end-users and not just on bank productivity and efficiency. Policy Implications• Regulators should consider the impact of banks' technological advances on financial digitalization. In the new digital financial era, which is driven by new banking technologies, regulators should be aware of the potential impact of technological changes driven by the banking industry.• Enhancers of technological transformations at companiesin both banking and other sectorsshould consider the impact of these changes on end-users and not on just on firm efficiency.• Since banks' IT investments in new technologies affect customers' digitalization, financial authorities should adopt policies that foster digitalization but also guarantee the highest level of security by protecting consumers from privacy violations and digital fraud.• The positive externalities of banks' investments in technology should prompt public authorities to consider classifying the amount spent as an investment rather than an expense, which would foster these technological investments and allow banks to free up capital.Over the past two decades, technological innovations have transformed individuals' lives and the economy. New terms, such as 'the technological revolution' and 'the new economy', have been coined in order to capture how innovations have given rise to new services, new job definitions and new managerial functions across various economic sectors. These innovations have occurred as a result of breakthrough technologies, such as artificial intelligence and blockchain, and also of incremental technologies, such as the diffusion and increased accessibility of digital channels. This process Global Policy (2020) 11:Suppl.1

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Section: Discussionmentioning

confidence: 99%

Section: The Role Of New Banking Technologies In the Adoption Of Digimentioning

confidence: 99%

The Effect of Banks' IT Investments on the Digitalization of their Customers

2020

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“…Studies have also elucidated vast variations in investment in capability development under different market structures. Market structure affects firms' perceptions of the private benefits and costs of capability development and their incentives to invest in the development of such assets (Frame & White, 2015;He, 2015).…”

Section: Market Structure and Firms' Capability Developmentmentioning

confidence: 99%

Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Nachum

Ogbechie

2019

Africa Journal of Management

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Privately-owned Nigerian banks hold 94% of Nigeria banking assets, the world's second largest share of local ownership. Theoretical explanations for the dominance of local firms related to liabilities of foreignness do not explain this phenomenon, as foreign banks do not experience additional costs compared to local Nigerian banks. In search for explanation, we focus on market structure, competitive intensity and their impact on capability development. In-depth exploratory study of Nigeria banking industry, based on interviews with industry experts and practitioners, supplemented by secondary data, suggests that government policies towards both foreign and Nigerian banks resulted in market structure and competitive dynamics that were conducive to capability development by Nigeria banks, whose strength arrested foreign entry. The study throws light on a regulatory approach that incentivizes capability development via discipline imposed by markets rather than by direct government intervention in the form of protectionism or favorable resource provision. It highlights the merits of studying phenomena that are inconsistent with existing theories for theory extension and development.

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“…One of the most notable technological shifts concurrent with the crisis is the adoption of online banking technology in the form of transactional web sites and, more recently, mobile banking apps. This trend has been discussed as reducing banks' unit costs, enhancing consumers' convenience and choice, and providing a means of product differentiation (DeYoung et al, 2007;He, 2015). While intuition might suggest that online banking could permit banks to substitute away from physical branch offices, DeYoung et al (2007) report contrary evidence that the online delivery channel has been used mainly as a complement to, rather than as a substitute for, branches of community banks.…”

Section: Technological Changesmentioning

confidence: 99%

Adapting to Changing Prices before and after the Crisis: The Case of US Commercial Banks

2016

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For banks, cost management has gained importance in the current environment of low interest rates. In this environment, banks' revenues from interest are under pressure, leading to renewed interest in the substitutability of banks' input factors. Substitution elasticities typically depend on two factors: cost technology and economic conditions (relative input prices or cost shares). Technological shifts and policy changes are therefore expected to affect firms' elasticities of substitution. This study estimates U.S. commercial banks' substitution elasticities during the 2000-2013 period. It analyzes the total effects of the technological shifts and policy changes on banks' substitution elasticities during that period. An endogenous-break test divides the sample into a precrisis period (2000-2008) and a crisis period (2009-2013). During the pre-crisis period, banks' inputs are inelastic substitutes. After the onset of the crisis, especially the long-run substitutability of most input factors decreases to even lower levels due to changes in both cost technology and economic conditions. At the same time, banks' response to input price changes becomes more sluggish. The results indicate that the availability of substitutes is substantially worse during the (post-) crisis period, which limits banks' possibilities for cost management.

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Rivalry, Market Structure and Innovation: The Case of Mobile Banking

Cited by 15 publications

References 17 publications

The Effect of Banks' IT Investments on the Digitalization of their Customers

The Effect of Banks' IT Investments on the Digitalization of their Customers

Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Adapting to Changing Prices before and after the Crisis: The Case of US Commercial Banks

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