Decline of Traditional Banking

2 Key excerpts on "Decline of Traditional Banking"

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  eBook - ePub

  Transformation for Sustainable Business and Management Practices

  Exploring the Spectrum of Industry 5.0

  • Aarti Saini, Vikas Garg, Aarti Saini, Vikas Garg(Authors)
  • 2023(Publication Date)
  • Emerald Publishing Limited

    (Publisher)

  Chovanová, 2006 ). Consequently, electronic banking is also a form of DB. This is because e-banking allows the customer to make a transaction electronically that was previously done by the customer by visiting the bank. Therefore, traditional banking services that are transferred to a digital/electronic environment can be defined as digital/electronic banking.

  With this digitalization, the banking industry opens to a single platform around the world, not as individual countries as before, but as a global village. To survive in a globalized, liberalized, privatized, and competitive market, banks must improve and update their services with the support of new and existing technology. According to many academic writings, e-banking has long been considered an innovative product. That is because banking is constantly being digitized, digitalized, constantly being renewed, and innovated to add conveniences and new experiences to their customers through the technology (Edwin, Okpara, Ailemen, & Mike, 2014 ; Enders, Jelassi, König, & Hungenberg, 2006 ; Shah & Clarke, 2009 ; Sohail & Shanmugham, 2003 ; Solomon, Shamsuddin, & Wahab, 2013

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  Trust, Power and Public Relations in Financial Markets

  • Clea Bourne(Author)
  • 2016(Publication Date)
  • Routledge

    (Publisher)

  Regulators, seeking to increase competition and transparency, are limiting product bundling and ancillary sales, dictating fees and commission structures and requiring data about customers’ history be made available to competitors (Allchin et al. 2016). Banking profits from payment processing for credit- and debit-card payments have been disrupted by new regulations reducing revenues. Powerful interlopers such as Amazon, Google and PayPal saw their opportunity to lure merchants to cloud-based platforms with discounted fees for participating in customer promotions (Economist 2014). Self-service tills at Home Depot, the US home-improvement store, lets customers use PayPal. Google offers a virtual wallet. Amazon allows customers to transfer money. Facebook and Apple are also interested in financial technology or ‘fintech’ (Economist 2014); like Google, they are amassing vast quantities of data on how users behave. But banks were transforming their business models long before these latest pressures emerged. The traditional image of a bank is a place that makes old-fashioned loans to individuals and small and large companies. This is no longer the true image of banking in Western markets where low interest rates continue to dominate. Capital markets perform many of the services once performed by banks; free from heavy regulation, capital markets can apply innovations, greater risks and aggressive hedging activities (Dodd 2014). Twenty-first-century banking shifted its focus from lending to securitisation, advising companies on how to ‘tap’ capital markets for finance and converting financial assets into tradable securities, thus putting less of the banks’ own capital at risk (Ben-Ami 2001). Now that banks no longer depend on assets on their own balance sheet, there is no limit to their capacity to create credit. Banks have effectively taken over the role of money-creation in national economies (Dodd 2014)

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