Financial Innovation in Internet Banking: A Comparative Analysis

29 Pages Posted: 28 Feb 2008

See all articles by Francesca Arnaboldi

Francesca Arnaboldi

University of Milan

Peter Claeys

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences; European University Institute - Economics Department (ECO)

Date Written: February 15, 2008

Abstract

A key strategic issue for banks is the relative success of pure Internet banks and internet banking facilities offered by existing banks as part of an overall banking strategy (the click and mortar model). The object of the paper is to compare the performance of the two models across countries: Finland, Spain, Italy and the UK that have different banking systems and different levels of technological advance. From the fuzzy cluster analysis we found that internet banks are hard to distinguish from banks that adopt both click and mortar strategies. Country specific features seem to be important in explaining differences across banks. We therefore explain the performance of banks by a group of selected bank specific features, country specific macroeconomic indicators and information technology related ratios over the period 1995-2004. We find that the strategy of banking groups to incorporate internet banks reflects some competitive edge that these banks have in their business models.

Keywords: Banks, Internet, Innovation

JEL Classification: G21, O32

Suggested Citation

Arnaboldi, Francesca and Claeys, Peter, Financial Innovation in Internet Banking: A Comparative Analysis (February 15, 2008). Available at SSRN: https://ssrn.com/abstract=1094093 or http://dx.doi.org/10.2139/ssrn.1094093

Francesca Arnaboldi (Contact Author)

University of Milan ( email )

Via Festa del Perdono 7
Milan, 20122
Italy

Peter Claeys

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 191
B-1050 Brussels
Belgium

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,529
Abstract Views
7,147
rank
17,003
PlumX Metrics