Strategic E-Commerce Aspects of the E-Banking/E-Lending Industry

Abstract

Major advances in technology, especially those that leverage the growth of the Internet, are playing a key role in the development and evolution of the banking and lending industry. In order to succeed, banks must create and implement a more aggressive strategy and move away from the primarily defensive strategy if they are to return to acceptable levels of ROI. E-banking/e-lending can significantly reduce the amount of time it takes to process loans and related services by allowing the potential borrower to do much of the work themselves. The cost savings for presumably many thousands of applications per year will be substantial. However, the start-up costs for e-banking/e-lending can be significant. Lenders must be confident of sustainable volume projections. E-banking/e-lending also allows lenders to reach borrowers outside of their traditional market areas. Several strategic factors and various models are discussed to identify the emerging tendencies and to explore the opportunities and threats within a strategic framework.