Strategies in Banking and Financial Services Firms: A Survey

46 Pages Posted: 12 Nov 2008

See all articles by Ingo Walter

Ingo Walter

New York University - Leonard N. Stern School of Business; New York University (NYU) - Department of Finance

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Date Written: December 2003

Abstract

This survey paper reviews the basic parameters of strategic positioning and execution in multi-functional financial services firms. We begin with a model of financial intermediation between end-users of the financial system as a way of locating specific financial intermediation functions. Shifts in intermediation shares are superimposed on this flow-of-funds profile, focusing on their implications for alternative business models available to financial institutions. The next section of the paper links the structural story to a normative strategic positioning matrix, which combines standard structure-conductperformance precepts with the potential realization of scale, scope, x-efficiency, marketpower, transaction- and information-cost dimensions, as well as imbedded risk exposures and conflicts of interest. The final section of the paper considers the value of natural hedges incorporated into multifunctional business platforms against the accompanying potential for a conglomerate discount in the share price.

Keywords: Financial services, Banking, Strategic positioning, Strategic execution

Suggested Citation

Walter, Ingo, Strategies in Banking and Financial Services Firms: A Survey (December 2003). NYU Working Paper No. FIN-03-050, Available at SSRN: https://ssrn.com/abstract=1300190

Ingo Walter (Contact Author)

New York University - Leonard N. Stern School of Business ( email )

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New York University (NYU) - Department of Finance

Stern School of Business
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New York, NY 10012-1126
United States

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