Banks and Financial Consulting in the Internet Age

Banks and Financial Consulting in the Internet Age

George Peters (Munich University of Applied Sciences, Germany)
Copyright: © 2002 |Pages: 12
DOI: 10.4018/978-1-930708-21-1.ch019
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In our analysis we concentrate on the effects of the Internet on private banking and abstract from other effects that may have changed private banking. We limit our analysis to the aspects of financial consulting; we do not discuss the pros and cons of traditional and online banks in the field of order placement. In the chapter we focus on the German private banking sector. The private banking sector1 has changed dramatically since Internet technologies have been introduced. Online banks have been founded and grown rapidly (Consors, Comdirekt, Direktanlage Bank, etc.). They do not have branch networks, but they offer their services via telephone and Internet. Most online banks do not offer financial consulting services (Advance Bank, a subsidiary of Dresdner Bank in Germany is an exception) but they provide extensive financial information on their Web sites. They are high-tech companies in comparison to the over-the-counter business of traditional banks. In the business model of traditional banks, the private investors do not have to pay for the labor and cost-intensive, face-to-face financial consulting services directly. The order and depot fees for shares and funds not only cover the transaction costs but also consulting services. The consulting services of the traditional banks are fully subsidized by the order and depot fees.

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