Technology and innovation in retail banking distribution

The issue of distribution of retail financial services has received growing attention in the academic and professional literature and has been hailed as an increasingly important factor in determining whether or not a company competes effectively in its chosen markets. In an increasingly competitive and deregulated environment, superior distribution strategies concerned with how to communicate with, and deliver products to the consumer can provide institutions with significant competitive advantage in the marketplace. In effect distribution provides the basis for differentiation rather than the core service itself. Discusses developments in the distribution of retail banking services in the UK; more particularly, the emergence of home and telephone retail banking delivery systems will be highlighted, with the successful introduction of a telephone banking service by First Direct, a subsidiary of Midland Bank, being used as a case study to explore current developments.