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Key Success Factors of Banking Industry

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Key Success Factors of Banking Industry

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Key success factors refer to those factors which are important to future competitive success of industry members. These factors include product attributes, competitive capabilities, resources, competencies, market achievements etc. It is very important for the strategists to understand the landscape of industry in order to identify the most important competitive success factors. Due to changes in driving forces and competitive conditions, the key success factors of one industry differ from other. Banking industry is broadly divided into two types of banks i.e. virtual banks and brick and mortar banks. The key success factors of banking industry is discussed below.

key success factors of banking industry is discussed below. Technology Subscribe in a reader RSS Enter

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Latest technology plays a very important role in the banking industry. It helps in introducing innovative products according to the demand of consumers. Technology can be used to lower down the cost of transaction and improve the quality of products. For example when the banks realized that they can lower down their transaction cost by installing ATMs and debit cards they did so. It saved the overhead cost and improved convenience for customer by providing 24/7 service. Online banking is increasing tremendously due to rapid technological change.

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Key Success Factors of Banking Industry

Industry of virtual banking is attracted by low cost. Competition is such high that to survive in industry low cost is very important. As virtual banks have no physical existence of branches and ATM network so they have great advantage to offer their products at lower rates than brick and mortar banks. Due to low overhead cost, virtual banks are charging lower transaction cost which gives them a plus point.

PRODUCT INNOVATION

Product Innovation is one of the major success factors in the banking industry, Since all the banks are offering similar products therefore differentiation is very important for the future survival. Banks are trying to come with different innovative products in order to differentiate themselves from other banks.

in order to differentiate themselves from other banks. QUALITY Service Quality includes all the dimensions of

QUALITY

Service Quality includes all the dimensions of quality which the consumers want. Brick and mortar banks have the advantage to directly contact with the customers due to which customers feel satisfaction. On the other hand, in virtual banks there is lack of person-to- person contact which forced consumers to resolve their problems over the phone or via E- Mail. In many cases such contacts frustrate some customers.

Mail. In many cases such contacts frustrate some customers. BRAND IMAGE (RECOGNITION) Categories Accounting Principles

BRAND IMAGE (RECOGNITION)

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Key Success Factors of Banking Industry

Brand image plays an important role in selecting the product or bank. For example City group and Bank of America are two major players in the industry with huge resources and they have major market share as well. That’s why most of the people wish to be their customers. On the other hand, virtual banks are not so much popular and have a low market share. In this way, market share and brand awareness within banking industry is a major concern for them.

SIZE OF THE COMPANY

Size of the company is an important key success factor. In banking industry size of bank refers to the total market share, total assets, total number of branches and ATM’s, total number of customers etc. Brick and mortar banks have a good market share due to which they can compete effectively. Contrary, virtual banks have relatively lower market share in USA banking industry which is a major problem for them.

LOCATION AND CONVENIENCE

It is important to note that convenience attracts consumers. For example if a bank has wider network then it will be convenient for the customers to make transactions easily. In this case virtual banks have advantage over brick and mortar banks. Internet only banks can be accessed any where in the world through internet. Virtual banks have no ATM network and no branches, requiring customers to use other banks’ ATMs, or by using cash-back services with debit cards. The growth of the internet in the last few years, has forced many brick-and-mortar banks to consider and develop online banking.

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Key Success Factors of Banking Industry

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9 responses to Key Success Factors of Banking Industry

9 responses to Key Success Factors of Banking Industry Kelvin says: August 27, 2012 at 6:19

Kelvin says:

August 27, 2012 at 6:19 am

I’m a finance and banking graduate working in an MFI. I’m conducting research on Key succes factors in banking industry.

sachin b.s says: September 29, 2012 at 2:14 pm

sachin b.s says:

September 29, 2012 at 2:14 pm

gud

avg consumer says: September 10, 2013 at 8:15 pm

September 10, 2013 at 8:15 pm

service quality ?

 
afnan says: March 17, 2014 at 5:19 pm

afnan says:

March 17, 2014 at 5:19 pm

very good explanation about the key factors of success of bank industry

gladys says: August 4, 2014 at 1:48 pm

gladys says:

August 4, 2014 at 1:48 pm

nyc

saed says: February 8, 2017 at 10:43 pm

saed says:

February 8, 2017 at 10:43 pm

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thats very sweet?

Key Success Factors of Banking Industry

thats very sweet? Key Success Factors of Banking Industry Babrah says: May 2, 2017 at 5:46

Babrah says:

May 2, 2017 at 5:46 pm

Like that

Cece says: says:

November 25, 2017 at 9:29 am

This has been very helpful

November 25, 2017 at 9:29 am This has been very helpful Daniyal says: January 17, 2018

Daniyal says:

January 17, 2018 at 8:07 pm

This text can’t copy but i want to copy these headings and matterial.

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