Product Innovation is one of the major success factors in the banking industry,  Since all the banks are offering similar products therefore differentiation is very important for the future survival. Banks are trying to come with different innovative products in order to  differentiate themselves from other banks.

QUALITY

Service Quality includes all the dimensions of quality which the consumers want. Brick and mortar banks have the advantage to directly contact with the customers due to which customers feel satisfaction. On the other hand, in  virtual banks there is lack of person-to-person contact which forced consumers to resolve their problems over the phone or via E-Mail. In many cases such contacts frustrate some customers.

BRAND IMAGE (RECOGNITION)

Brand image plays an important role in selecting the product or bank. For example City group and Bank of America are two major players in the industry with huge resources and they have major market share as well. That’s why most of the people wish to be their customers. On the other hand, virtual banks are not so much popular and have a low market share. In this way, market share and brand awareness within banking industry is a major concern for them.

SIZE OF THE COMPANY

Size of the company is an important key success factor. In banking industry size of bank refers to the total market share, total assets,  total number of branches and ATM’s, total number of customers etc. Brick and mortar banks have a good market share due to which they can compete effectively. Contrary, virtual banks have relatively lower market share in USA banking industry which is a major problem for them.

LOCATION AND CONVENIENCE

It is important to note that convenience attracts consumers. For example if a bank has wider network then it will be convenient for the customers to make transactions easily. In this case virtual banks have advantage over brick and mortar banks. Internet only banks can be accessed any where in the world through internet. Virtual banks have no ATM network and no branches, requiring customers to use other banks’ ATMs, or by using cash-back services with debit cards.  The growth of the internet in the last few years, has forced many brick-and-mortar banks to consider and develop online banking.