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Information technology innovations and commercial banking: A review and appraisal from an historical perspective

Author

Listed:
  • Bernardo Batiz-Lazo

    (Open University Business School)

  • Douglas Wood

    (Manchester Business School)

Abstract

Technological innovation in general and information technology (IT) applications in particular, have had a major effect in banking and finance. Following Garbade and Silber (1978), this research reviews the effects on banking organisations with reference to front office or external changes as described by the nature of product and service offerings. Following Morris (1986) and Quintás (1991), the research also considers innovations in the back office or internal (operational function) changes brought about to banking organisations. Outstanding IT-based innovations are considered and grouped into four distinct periods: early adoption (1864-1945), specific application (1945-1965), emergence (1965-1980) and diffusion (1980-1995). The research then discusses the potential impact of more recent innovations (i.e. electronic purses, digital cash and Internet banking). As a result, the research provides an historical perspective on the main drivers determining adoption of technological innovation in retail banking markets.

Suggested Citation

  • Bernardo Batiz-Lazo & Douglas Wood, 2002. "Information technology innovations and commercial banking: A review and appraisal from an historical perspective," Economic History 0211001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpeh:0211001
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    References listed on IDEAS

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    1. Robert DeYoung, 2001. "The financial performance of pure play Internet banks," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 25(Q I), pages 60-78.
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    5. Walker, David A., 1978. "Economies of scale in electronic funds transfer systems," Journal of Banking & Finance, Elsevier, vol. 2(1), pages 65-78, June.
    6. Gerald Stuber, 1996. "The Electronic Purse: An Overview of Recent Developments and Policy Issues," Technical Reports 74, Bank of Canada.
    7. F.X. Browe and David Cronin, 1995. "Payments Technologies, Financial Innovation, and Laissez-Faire Banking," Cato Journal, Cato Journal, Cato Institute, vol. 15(1), pages 101-116, Spring/Su.
    8. Baltensperger, Ernst, 1980. "Alternative approaches to the theory of the banking firm," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 1-37, January.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Is there a “concrete wall” for women in Latin American Fintech?
      by bbatiz in The Cashless Society on 2021-08-24 17:40:14

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    Cited by:

    1. Bojinov, Bojidar, 2016. "Challenges for ensuring the information security of commercial banks," MPRA Paper 75772, University Library of Munich, Germany.
    2. Majid Karimzadeh & Mohammad Reza Sasouli, 2013. "Contribution of Internet Banking toward Profitability of Banking in India," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(6), pages 57-69, December.

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    More about this item

    Keywords

    Banks; competition; IT innovation;
    All these keywords.

    JEL classification:

    • N - Economic History

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