Discussion Papers

Alwin Mahler

Strukturwandel im Bankensektor - Der Einfluß neuer Telekommunikationsdienste
Nr. 184 / März 1998


The banking industry is considered to be a pioneer in the usage of new telecommunication services, especially in the context of electronic banking. Banking services are characterized by a high information intensity of the value chain and the resulting products. Regarding the high usage of banks in conjunction with rapid developments in telecommunications makes the investigation of consequences of telecommunications use on the structure of the banking industry of special interest. In order to explore this, expert interviews with representatives of various banks were undertaken. These also provide the basis to test hypotheses derived from frameworks in industrial economics and organization theory. Increasing usage of new telecommunication services especially impacts on the customer interface. The telecommunication based "value chain" for banking services in relation to customers is shown for the case of T-Online - Deutsche Telekom’s videotext service - and especially for the Internet. Over this platform transactions are offered which not only include brokerage services but also the realization of payment services for this open platform, which are especially crucial for the further development of electronic markets. Experts also see major changes in other areas of banking like depositories or in internal business transactions of banks, in addition to how money is transfered.

As a result of the new value chains shaped by telecommunication services in the back-office, a relatively high degree of vertical integration of telecommunication services in banks is observable. Little outsourcing of information- and communication technology based functions to specialized suppliers was observed. Moreover, for the future the experts see coordination forms closer to hierarchies for outsourcing, such as service companies belonging to the same banking group. Therefore the data do not support the hypothesis that an independent industry for the supply of telecommunication services to banks will emerge. Their strategic importance and their changing structure - the Internet might be seen as paradigmatic for this - mitigate against this development. However, regarding the hypotheses of the impact of telecommunication services on the coordination of economic activity in general, there is some evidence for a shift away from hierarchies. The data give evidence for this hypothesis for coordination within companies and for coordination forms on the continuum between markets and hierarchies with a tendency towards "symbiotic" arrangements and electronic markets. Especially for banking services, it seems that the development of electronic markets is well on its way. Using Porter’s framework for the analysis of the structure of industries, the study concludes by showing major changes on the structure of the banking industry as a consequence of the increasing usage of new telecommunication services. Implications are seen by the experts especially with regard to the problem of overcapacity built up and for the customer interface, which lead to a further increase of customer sovereignty.

Only German language version available.

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