The effects of technology in retail banking

Abstract

This paper was written acknowledging that technology has become an indispensable part of banking and its purpose is to analyze the effects of technology in the retail bank-client service delivery and will only refer to the back-office aspect of banking (and related technologies) as it becomes necessary to support the arguments or descriptions, therefore depth regarding this area will be intentionally limited. The paper is organized in 5 chapters. Chapter 1, Retail Banking Industry, definition and analysis. This chapter defines "retail banking" for the purpose of the paper, and presents a value chain and a five forces analysis to determine where technology could be more beneficial for the retail banks. Chapter 2, Non-financial competitors, discusses examples of existing and potential technology enabled non-financial firms to offer financial services ranging from just an information source to full blown payment channel. Chapter 3, Analysis of Relevant Technologies, brings some perspective on how technologies already adopted by end-users could be used (or are already been used) to deliver banking services. It also presents statistics about these technologies and a brief discussion on how consumers have changed their behaviors to embrace these new technologies. Some of these technologies are payment cards, mobile communication devices, internet, software agents and telematics Chapter 4, Security and Privacy Concerns, due to the nature of the products and services in the banking industry, the issue of security and privacy are extremely important and they enhance or hinder consumer adoption of new technologies. That is why these concerns will be discussed in a separate chapter. Chapter 5, Putting it All Together, building on the information gathered in the previous 4 chapters this fifth chapter presents a potential scenario of how these technologies could change the way we will do banking in the near future.