The impact of scale effects on the prevailing internet-based banking model in the US

• Autores: Alexandre Momparler Pechuán, Francisco José Climent Diranzo
• Localización: Notas técnicas: [continuación de Documentos de Trabajo FUNCAS], ISSN-e 1988-8767, Nº. 630, 2011
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • Internet-based banks use a technology-intensive production process that may benefit from scale effects as they grow larger. This paper analyzes whether the predominant Internet-primary bank in the USA generates technology-based economies of scale.

    There is evidence of both favorable and adverse technology-based scale effects. As the leading Internet-primary bank gets larger, the financial performance gap with traditional banks shrinks while some of its critical competitive advantages wear down.

    The results suggest that unless the prevailing Internet-primary bank preserves the distinctive advantages of the Internet-based business model as it improves financial performance, it might end up converging with its branching competitors.