E-Banking in Italy: An Analysis of the Evolution of Prices, Services and Competition Strategies

There are been many claims that the Internet could represent a “frictionless” and almost perfect market [1]. This belief was particularly evident in that banking industry, where Internet was considered as a source of sustainable competitive advantage for a new generation of banks focused on this sale channel. E-banking in Italy, ever if it was started later then U.S.A. and other european countries as now reached a fast expersion stage. Most of the banks though whit different timing and structures have developped web-sites to growt customers banking and trading access through Internet. At the same time new competitors not in the banking business have recently entered in the market. Our research empirically analysed the e-banking services offered by a sample of 54 Italian banks. We considered as e-banking services all banking services that can be accessed through the Internet. Data on offered services and their prices were collected on a quarterly base. We analysed the following aspects: - Trend in services offered on-line to customers; - Trend in market segmentation and in banks strategies; - The economics emerging from the competition in on-line banking. We used these data for testing the hypothesis of “frictionless market”. The obtained results seem to show that the market of e-banking services is very different from early expectations, and that economies of scale and brand remain as important sources of competitive advantage