The Future of Banking: The Role of Information Technology

Bancni vestnik: BANKING SECTOR AT THE CROSSROADS: CHALLENGES FOR THE FUTURE, Forthcoming

15 Pages Posted: 16 Oct 2015 Last revised: 29 Oct 2015

Marko Jaksic

University of Ljubljana - Faculty of Economics

Matej Marinc

University of Ljubljana - Faculty of Economics

Date Written: September 4, 2015

Abstract

This article analyzes how information technology (IT) is transforming individual banks and the entire banking industry. Even though the basic economics of banking have not changed, IT developments may lure banks into transaction banking (due to IT-driven cost efficiencies). However, banks should not give up on relationship banking. Instead, banks need to adjust themselves to consumers’ new preferences for IT-driven products and use IT developments to reconfigure or even reinvent relationship banking. Drastic changes are also imminent in banking due to the entry of FinTech startups and IT companies in traditional banking businesses. Government intervention and regulation give banks additional time to adjust.

Keywords: Banking, Information technology, Relationship banking, Regulation

JEL Classification: G20, G21, L86, O33

Suggested Citation

Jaksic, Marko and Marinc, Matej, The Future of Banking: The Role of Information Technology (September 4, 2015). Bancni vestnik: BANKING SECTOR AT THE CROSSROADS: CHALLENGES FOR THE FUTURE, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2656388

Marko Jaksic

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Matej Marinc (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

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