Strategic planning in the banking industry : analysis, discussion and prospects

Abstract

The environmental jolts that the banking industry has been confronted with, has challenged banks to change their strategic direction. It has forced them to redefine what the business of banking is all about, to determine how their existence can be retained and to discover what is the key to survival within the dynamic and competitive environment surrounding them. Several questions are nowadays being asked. For instance, are the traditional deposit taking and loan making activities generating enough profits for banks, or is there a need to exploit new opportunities in new areas of business? Given the globally prevailing, unfavourable economic climate, what measures are being taken by banks to remain competitive within their markets? Are the international standards being imposed on banks and forces of regulation leading to a change in the way banks operate? How important is technology in banking today and what is leading to the development of new products and innovative distribution channels on the market? How is the relationship between the bank and its clients, and how are customer perceptions changing? What are the measures being taken by banks to attract customers and retain their loyally within such a competitive environment? This dissertation seeks to provide an answer to all the above questions, in addition to others. In brief, the study gives an overview of how are European and Maltese banks responding to the factors and forces surrounding them and what strategic actions are being pursued. This dissertation also determines whether Maltese banks are following the European trend or not.