Many states still limit or prohibit commercial bank branching. In addition, the McFadden Act prevents banks from branching across state lines. It has been suggested that…
Many states still limit or prohibit commercial bank branching. In addition, the McFadden Act prevents banks from branching across state lines. It has been suggested that anti‐branching laws inhibit competition in the banking industry. This follows from the notion that bank markets are localized, and that anti‐branching laws prevent banks from penetrating local markets adjacent to their main offices. Two interesting hypotheses arise from this conjecture. First, do banks operating in unit‐banking states have a profit advantage over their counterparts in states that allow state‐wide branching? And second, is there any significant difference in profitability between banks in limited‐branching states and banks in state‐branching states? In other words, are there diminishing returns to branching deregulation? Research reported in this paper answers these questions.
Although it was predicted that bank branches would quickly become obsolete in a computerized society, the reality is that many full‐service branches are not closing but…
Although it was predicted that bank branches would quickly become obsolete in a computerized society, the reality is that many full‐service branches are not closing but rather evolving to meet changing needs. The role of the branch manager is crucial, and is also changing. In particular, managers are expected to take a lead in marketing activities. A questionnaire study was carried out to examine managers’ changing roles, using two samples of branch managers, one from Canada and one from Spain. Managers were asked to rate 21 function variables on their importance in bank management and in facing new market trends. Differences were found between the two samples, as were similarities: both identified managerial ability, strategic autonomy of the branch and business development through increased marketing ability, as important building blocks for the future role of branches and their managers.
The available evidence is partly consistent and partly inconsistent with a negative association of branching restrictions and the number of banking offices. In this paper, I present evidence that the failure to consistently find such a negative association of branching restrictions and banking offices is quite robust. I suggest that the endogeneity of the banking restrictions and regulators' unmodeled behavior are the basic source of the inconsistency. I conclude that there is no evidence that suggests substantial changes in the number of banking offices with the introduction of interstate branching.
Service is a vital, multi‐dimensional ingredient of the relationship between customers and their bank, or, more especially, their branch. Further, word‐of‐mouth…
Service is a vital, multi‐dimensional ingredient of the relationship between customers and their bank, or, more especially, their branch. Further, word‐of‐mouth recommendation is a valuable source of new business and is often based upon the range of services available. It is therefore an important function of branch management to monitor on a daily basis the quality of service given to customers and, more globally, for Head Office management to have available an occasional measure of the levels of service available at individual branches.
London Clearing Banks (LCBs) are currently endeavouring to improvetheir overall branch delivery system by adopting strategies whichpromote branches as marketing centres…
London Clearing Banks (LCBs) are currently endeavouring to improve their overall branch delivery system by adopting strategies which promote branches as marketing centres. This approach is necessary because of the substantial inherent disadvantages associated with the branch network. Branches are expensive and as distribution channels they are less than efficient. This inefficiency stems from the fact that customers need to be “induced” into them and also because branches are relatively inflexible and difficult to adapt to changing market conditions. As a consequence the strategies are identified and discussed, which are currently being implemented by banks in an endeavour simultaneously to improve both customer satisfaction and the efficiency of branch networks by making them more responsive to the needs of the market.
A decade ago the threat posed to branch networks by emergingalternative distribution channels was largely perceived of in terms ofthe eventual effect they might have on…
A decade ago the threat posed to branch networks by emerging alternative distribution channels was largely perceived of in terms of the eventual effect they might have on the size and number of operational branches. Although still a valid concern, this consideration has proved to be of less significance and certainly of less academic interest than the innovative approaches of banks in seeking to preserve branch networks as important components of their distribution mix. Examines the different strategic responses of the banks to the problem of what to do with their branches and concludes that these responses all have one important characteristic in common, namely, that they are all market focused and profit based.
This chapter examines the transition in the US banking industry from a community to a national logic, developing a general model to explain how and when shifts in…
This chapter examines the transition in the US banking industry from a community to a national logic, developing a general model to explain how and when shifts in institutional logics occur. Based on qualitative historical evidence and discrete-time event history analysis predicting the introduction of legislation favoring the national logic, this chapter proposes that dramatic exogenous events such as the Great Depression or more gradual processes such as modernization favored the industry's transition to the national logic, but that such exogenous events had a greater influence in areas where strategic actors could capitalize on them. The qualitative evidence presented here suggests that struggles involving organizational identity and “legitimacy politics” played an important role in the shift in logics. Our theorizing focuses on how, when the environment changes in an incremental fashion, actors are primed with new possibilities, which may shift their collective identities, but when environmental changes are discontinuous, they provide actors strategic opportunities to alter the balance of logics in the environment.
The purpose of this paper is to assess the antecedent of satisfaction and loyalty in the context of a multi-channel banking environment. Multi-channel banking involves…
The purpose of this paper is to assess the antecedent of satisfaction and loyalty in the context of a multi-channel banking environment. Multi-channel banking involves both branch and electronic banking channels through which the customers interact with the bank.
The study involved a customer survey of 229 respondents, which used a convenience sampling approach through intercepts and interviews held at bank branches. A structured questionnaire was used, and data were analyzed using structural equation modeling.
While examining factors such as perceived ease of use, branch service quality evaluation, satisfaction, and loyalty, it is observed, using structural equation modeling, that perceived ease of use and branch service quality are antecedents to satisfaction and satisfaction positively affects the loyalty.
Although it is realized that digital banking will positively influence loyalty, the role of branch service quality cannot be ignored. The role played by the ease of use is higher than branch service quality evaluations.
The purpose of this paper is to illustrate the effect of including the customer as a resource in efficiency measurement. Variations in counting the customer illustrate the…
The purpose of this paper is to illustrate the effect of including the customer as a resource in efficiency measurement. Variations in counting the customer illustrate the different impacts on efficiency between a transactional and a relational approach to bank branch marketing.
The paper uses data envelopment analysis to analyse the efficiency of the branch network under consideration. This technique, while well established in the bank branch efficiency literature, is used here to gain insight into how relationship and transactional paradigms are affecting performance.
Although the average profile of the efficiency scores was similar, the scores of the individual branches differed greatly depending on how customers were counted. Some branches then can be typified as relationship oriented while others as transactions oriented bearing in mind that all branches have both remits.
Future research in efficiency measurement should include customers as a resource of the bank given the importance of them for the activity of co‐production. Careful consideration is required however of the method of accounting for these customers bearing in mind that different conceptualisations may significantly affect the efficiency score of the individual branches.
This paper sheds light on what is happening at branch level in a large network in the UK in terms of how transactions and relationship marketing approaches are affecting efficiency scores and the objectives of the branch. It also answers a call for research into organisations that simultaneously use relationship and transactions marketing.
The results of a first attempt in Hong Kong to set up a systematic procedure to search for profitable retail locations for setting up branches of commercial banks are…
The results of a first attempt in Hong Kong to set up a systematic procedure to search for profitable retail locations for setting up branches of commercial banks are reported, using a local Chinese bank as an example. It is possible to identify customer profiles, chart trading area patterns, create a market share estimation model and calculate the profitability of possible areas for setting up a new branch in order to develop a priority list for consideration in retail branching. Undertaking such research in developing countries is quite different from that in developed countries, due to the lack of data and research facilities. Experience from this attempt should be instructive to banking practitioners working in other newly industrialised countries.