As a result of the Internet's impact on the financial services industry, marketing, distribution, and customer service costs and capabilities have changed substantially. New types of financial goods and services can now be developed as a result of these changes.
There has been some origination volume for more regulated and complex financial products like mortgages and insurance on the Internet (estimated at $17Bn in mortgages and $400mm in insurance premiums in 2000). Online origination adoption has been slower and more concentrated among newcomers than among long-standing enterprises in these industries.
The role of internet in online finance
When people talk about how the Internet will affect the financial services industry, they frequently focus on how much money may be saved by using the Internet to do transactional business. These long-term cost savings have the potential to create enormous value for the company.
Finally, many of these efficiency improvements come at the expense of user comfort. There may be no significant reduction in overall costs if consumers respond by using more services, particularly ones that create expenses but no revenue. Previous advancements in retail financial service delivery, such as automated teller machines, have demonstrated this (ATMs). There is no better way to characterize computers than "general purpose technologies" (Brynjolfsson and Hitt, 2000). (Bresnehan and Trajtenberg, 1995). Most of the economic value created by general-purpose technologies is linked to their potential to enable complementary developments in the organization, market structure, and products and services of Kredit Pintar pinjaman online langsung cair ktp,.
Positive change is disruptive to the present structure of an industry, causing the value to be redistributed significantly among industry actors and producers and customers (Tushman and Anderson, 1986; Bower and Christensen, 1995). If you want to know how Internet has affected financial services from Kredit Pintar pinjaman online ojk,, you need to know how the Internet influences the critical drivers of industry structure and how it allows or necessitates changes in products and services. Because it's impossible to distinguish between the influence of the Internet and other long-term industry developments and exogenous factors, this will be a challenging task to undertake. While it will be difficult to establish accurate numerical estimates of productivity effects, the direction and broad influence on productivity, profitability, and consumer surplus (consumer value) will often be evident from Kredit Pintar pinjaman online cepat cair.
We believe that three significant concerns will shape the future of financial retailing: All market participants' capacity to determine the range of accessible pricing for financial instruments and services is known as transparency. In differentiating prices amongst groups of clients, it is necessary to make more nuanced differences, adjusting their rates according to the revenue streams they create, service costs and profitability they generate; Through the process of disintermediation or bypass, the traditional roles of financial counsellors, retail stockbrokers, and insurance agents are eliminated. Each of these factors will impact the responsibilities that financial service providers will play, as well as their profit sources and tactics.
How is transparency maintained here?
However, the kind and extent of the effects of each of these problems will vary widely among financial products. The interdependence of these factors makes differential pricing a necessary response to rising price transparency to prevent margin erosion. Similarly, incentives and distribution system structure may influence the ability to deliver sophisticated (although not complex) pricing strategies to customers. As a result, the remainder of the article will be structured around studying these consequences about various financial services sectors. Credit cards, deposit banking, mortgages, brokerage, and insurance will be the focus of our examination. We will also look at the secondary sectors of the retail financial services industry.
Due to the Internet's radical transformation, we have chosen to concentrate on the retail sector. This is because the retail sector stands to benefit the most from lower customer interaction costs, the ability to reach mass markets, and the reduction of geography's role in determining financial services providers' strategic approaches. There has already been a great deal of computing, and communications-enabled transformation in the relationships among banks or between banks and consumers of wholesale financial services (for example, brokerage houses and exchanges, or large firms and their commercial lenders) before the Internet became commercially viable.