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This thesis studies the competitive strategy of the retail banking on the Internet. Because the U.S. is ahead of the rest the world in this arena, the thesis primarily investigates the operation in the U.S. and, as a focus, does a comparative study of three representative players-Security First Network Bank, NetBank, and Citibank.
In this thesis, the essential constituents of the Internet bank are first identified and configured. Then the origin, trends and market conditions of the U.S. Internet banks are traced. This leads to an in-depth discussion of the relative positioning as well as the advantages and disadvantages of the traditional banks and the Internet-only banks. Finally, this thesis from the perspective of the Internet-only banks tries to formulate a competitive strategy in the retail banking.
The main findings in this thesis suggest that the competition in the Internet retail banking services mainly rests on the relationships with customers. Therefore, players unable to establish a complete constellation of customer relationships will ultimately face insurmountable difficulty expanding their market shares. For the Internet-only banks, their advantages may not sustain long because the traditional banks can provide some important services that the Internet-only cannot do and they can also invest without much difficulty to provide similar online services.
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