New Distribution Models for Financial Services: The Italian Bank’s Approach to the On Line trading development

In recent years, customers’ demands on financial services have changed significantly and the number of customers who engage in electronic commerce for financial transactions has increased considerably in the past years (Business Week, May 25, 1998). Due to the increase in income as well as improved information on financial services, customers are becoming more price-sensitive, more rational in decision-making and thus more challenging to the vendors. The present analysis is focused on the Italian banking sector; however, some aspects taken into consideration here may be in common with other countries. Porter’s five forces model is used to show how the Italian banks could leverage the advantageous cost asymmetries given by their existing distribution channels to pursue simultaneously cost leadership and differentiation, providing the trading on line service. The lack of specific competencies and assets together with a number of tactical and strategical drivers suggests that these new services could be object of outsourcing.