Banking 2015: a classic strategy battle of scale vs focus
Abstract
Purpose
This article examines the trends that will likely define the future of the retail banking industry in the next decade and the strategic imperatives for success.
Design/methodology/approach
Scenario technology and trend analysis.
Findings
Large players will generate higher aggregate profits by reaping the benefits of super scale, while niche players will aggressively pursue the most desirable customers by addressing their needs in distinct ways – those in the middle will get squeezed.
Research limitations/implications
Combining the results of the IBM CEO survey with market research and interviews with industry executives, the authors have identified five key areas of ongoing innovation that have the potential to fuel enormous growth for the retail banking industry: retail payments, mortgage loans, account and product integration, global expansion and the customer experience.
Practical implications
There are four strategic imperatives banks must follow to cultivate innovation and position themselves for sustainable growth.
Originality/value
All banks, but small and medium sized banks especially, will have to specialize and focus on their core strengths – those activities in which they excel – and partner with best‐in‐class specialists for everything else.
Keywords
Citation
Hedley, K., White, J., Petit dit de la Roche, C. and Banerjea, S. (2006), "Banking 2015: a classic strategy battle of scale vs focus", Strategy & Leadership, Vol. 34 No. 3, pp. 51-58. https://doi.org/10.1108/10878570610700875
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Company