Web Technologies and Value Innovation in the Italian Retail Banking Industry

Interpreting the outcome of a recent survey on Internet banking in Europe, [CARIGNANI et al., 2000], we point the attention to the adoption of Web technologies in Italian retail banks. Four patterns are emerging: minimal (just a presence on the WWW); tactical (Web as a distribution channel); functional (adoption of Web-based information systems); strategic (a definite strategy centered on Web technologies). While minimal and tactical adoptions are widely diffused, functional and strategic approaches are still very rare. The functional approach is mainly challenged by the underlying complexity of banking information systems and by the still immature technology. On the other side, the adoption of a Web-centred definite strategy is made difficult by unstable market conditions, together with very fast innovation. We refer to the framework introduced by Kim and Mauborgne to overcome the limits of conventional strategic approaches. Our analysis in centred on their concept of value innovation, which is pursued by shifting the focus away from existing markets, to point the attention to the creation of new market spaces. To this aim, the actors should overcome the limits of industry-wide competition, which are classified in six dimensions. The application of the Kim-Mauborgne framework may suggest concrete actions to the Italian retail banks; some exemplifications are given here. Finally the relationships between value innovation and the different degrees of Web technology adoption are explored, concluding that some of the most interesting opportunities are disclosed at the intersection of value and technology innovation actions: the degree of interaction and integration with partners and even competitors that is required by most value innovation actions may be enabled by the adoption of Web information systems. That is: the less diffused forms of adoption of Web technologies have the highest potential of generating profitable growth. Unfortunately, they are also the most difficult to achieve.