Can the Music Industry Change Its Tune

"A critical evaluation of the impact of change factors and strategic management initiatives on Banking Industry."

Today banking plays a vital role in our society and economy - the scale of transactions ranging from ordinary, individual customers writing cheques or using bank credit cards in shops and restaurants to enormous and complex payments by multinational companies across the world's great banking centres.

The Internet banking is changing the banking industry and is having the major effects on banking relationships. Even the Morgan Stanley Dean Witter Internet research emphasised that Web is more important for retail financial services than for many other industries. Internet banking involves use of Internet for delivery of banking products & services. It falls into four main categories, from Level 1 - minimum functionality sites that offer only access to deposit account data - to Level 4 sites - highly sophisticated offerings enabling integrated sales of additional products and access to other financial services- such as investment and insurance. In other words a successful Internet banking solution offers; Exceptional rates on Savings, CDs, and IRAs; Checking with no monthly fee, free bill payment and rebates on ATM surcharges; Credit cards with low rates; Easy online applications for all accounts, including personal loans and mortgages; 24 hour account access; Quality customer service with personal attention. (Mishra, 2006) In 1694 the first great British bank, the Bank of England, was established in London by royal charter, primarily to raise money for the conduct of the French Wars. The new bank lent the government Ј1,200,000 and quickly became not only the Government's bank, but was also the bankers' banker, used by private banks for the safekeeping of surplus funds. In 1708 the terms of renewal of the charter stated that it should remain the only bank in England allowed to have more than six partners - this prevented the formation of joint-stock banks (banks owned by a large number of shareholders) in England for over a century. (RBS, 2006)

The aim of this essay is to find out the current understanding of the factors revolved around Internet Banking. The essay will cover the background of banking, how the banking industry has changed over the years and how it's affected the internet users. The essay will also add in the discussion the PEST analysis within online banking and the impact of IT in the banking industry, the different types of theories to help keep motivated and confident. The essay will end with a conclusion on the topic in discussion and any future recommendations.

Research shows that online banking started hundreds of years ago, however a brief background of one of the worlds leading financial services providers the Royal Bank of Scotland group and its history of banking is being one of the oldest banks in the UK. Following the takeover of National Westminster Bank in 2000, the Group has continued to grow its business around the globe and, in addition to its strong UK presence, it has offices in Europe, the USA and Asia. By the end of 2002, it was the second largest bank in Europe and the fifth largest in the world by market capitalisation. In the UK the Royal Bank's branch network spans the nation and boasts a pedigree of great variety and distinction. Its history is very much the history of banking in the British Isles over the past four centuries, as the Royal Bank can trace its roots back to the sixteenth century through the amalgamation of more than 200 private and joint stock banks which comprise its past and present constituents. The Royal Bank of Scotland itself was founded in Edinburgh, by royal charter, in 1727. It opened its first branch in Glasgow in 1783 and developed a large network of offices throughout Scotland during the nineteenth century. In 1874 it opened a branch office in London and from the 1920s developed, by acquisition, a major presence in England. Banks which joined the group during these years included Drummonds (established c.1712), Williams Deacon's Bank (established 1836), Glyn, Mills & Co (established 1753) and Child & Co (established c.1580s), with business in London, north-west England and overseas. By 1970, following the Royal Bank's merger with the Edinburgh-based National Commercial Bank of Scotland, comprising the former National Bank of Scotland (established 1825) and Commercial Bank of Scotland (established 1810), it enjoyed over forty per cent of Scotland's banking business. Under the Williams & Glyn's Bank banner, it also boasted a large and growing presence in England and Wales. In 1985 Williams & Glyn's merged fully with the Group's Scottish clearing bank which thereafter traded throughout Britain as a single entity, The Royal Bank of Scotland.

In 2000 the Royal Bank acquired National Westminster Bank plc, in the biggest takeover in the history of British banking, to create a huge Group, with a highly diversified portfolio of services for personal, business and corporate customers. National Westminster Bank had been formed in 1968, when National Provincial Bank (established 1833), along with its subsidiary District Bank (established 1829), and Westminster Bank (established 1836), agreed to merge. The combined bank, which began trading in 1970, could, like the Royal Bank itself, trace its history back down the centuries through its own lineage of prestigious constituent banks. From the late 1970s National Westminster Bank had grown rapidly, extending its activities beyond domestic retail banking, by developing overseas and merchant banking interests. In 1995 the bank was restyled NatWest Group, to reflect the positioning of the company as a portfolio of businesses. After the merger of the Royal Bank and NatWest the businesses of the two groups were combined, and the enormous task of integrating their IT systems began. Scheduled to be completed in 2003, it was the largest project of its kind ever attempted, and was finished in November 2002, four months ahead of target. Natwest's retail bank continues to operate as a distinct and separate brand on the High Street. (RBS, 2006) (Refer to Appendix 1 for more on the history of banking)

The banking industry has changed in many way according to RBS (2006) due to the introduction of new products and services, the growing importance of a small number of leading banks, rapid advances in technology and the development of a national and, more recently, a global marketplace. In 1900 there were around 250 private and joint stock banks in Britain and London was undoubtedly the world's largest and busiest banking centre. The business of banking was, however, fairly limited in scope. Only the wealthy had bank accounts