12/2/2019 Key Success Factors of Banking Industry

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Key Success Factors of Banking

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 mbalectures  September 28, 2010  9 Comments

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 Subscribe in a reader

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.

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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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BEST RATES

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.

QUALITY
Categories
Accounting
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
Principles of Accounting
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- Advance Research Methods
Mail. In many cases such contacts frustrate some customers.
Business Research

Economics

Macro-Economics

Finance

Introduction to Finance

Management

Principles of Management

Strategic Management

Marketing
BRAND IMAGE (RECOGNITION)
Consumer Behavior

Principles of Marketing

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Brand image plays an important role in selecting the product or bank. For example City SWOT Analysis
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 Others
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 Psychology

major concern for them.

Sociology

Statistics

Descriptive statistics
SIZE OF THE COMPANY
Supply Chain

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
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USA banking industry which is a major problem for them.
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LOCATION AND CONVENIENCE Types of Research Approaches

Porter Five Forces Analysis of Mark

and Spencer (M&S)
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 Classification of Motives
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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9 responses to Key Success Factors of Banking

Industry

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

gud

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

service quality ?

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

nyc

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

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12/2/2019 Key Success Factors of Banking Industry

thats very sweet?

Babrah says: May 2, 2017 at 5:46 pm

Like that

Cece says: November 25, 2017 at 9:29 am

This has been very helpful

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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