Key Success Factors of Banking Industry

Key success factors refer to those factors which are important to future competitive success of industry members. These factors include product attributes, competitive capabilities, resources, competencies, market achievements etc. It is very important for the strategists to understand the landscape of industry in order to identify the most important competitive success factors. Due to changes in driving forces and competitive conditions, the key success factors of one industry differ from other. Banking industry is broadly divided into two types of banks i.e. virtual banks and brick and mortar banks. The key success factors of banking industry is discussed below.

Technology

Latest technology plays a very important role in the banking industry. It helps in introducing innovative products according to the demand of consumers. Technology can be used to lower down the cost of transaction and improve the quality of products. For example  when the banks realized that they can lower down their transaction cost by installing ATMs and debit cards they did so.  It saved the overhead cost and improved convenience for customer by providing 24/7 service.  Online banking is increasing tremendously due to rapid technological change.

BEST RATES

Industry of virtual banking is attracted by low cost. Competition is such high that to survive in industry low cost is very important. As virtual banks have no physical existence of branches and ATM network so they have great advantage to offer their products at lower rates than brick and mortar banks. Due to low overhead cost, virtual banks are charging lower transaction cost which gives them a plus point.

PRODUCT INNOVATION