Can Banks Succeed in the Current Marketplace?

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Abstract
Demand‐side changes, stimulated by higher levels of consumer awareness and sophistication, have combined with supply‐side changes, mainly induced by legislation, to create a difficult climate for banks. Lacking clear strategic direction and being undifferentiated, they find themselves competitively disadvantaged, particularly in cost terms, against the building societies. There is a difference in the way in which consumers perceive banks and what they expect from banks – i.e. a convenient money transmission service ‐ and the aspirations of many banks to be one‐stop providers of financial services. Suggests that relationship banking may offer a way forward but this requires a better understanding of marketing, organizational flexibility and a clearer customer focus. This poses major organizational, customer and employee challenges.

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