The changing internet related environment at overseas branches and operations of banks has such a big impact on the online banking related decision making process.
While multinational companies (MNCs) such as banks have been making use of internet banking as the main investment related strategic policy alternative, smaller banks too have been making use of it in order to achieve positive synergies over the internet (Durkin, and Howcroft, 2003). However while the former have being able to increase their net investment expenditure on internet banking on a larger scale, the latter have only been able to increase such investment on a smaller scale. As a result a clear dichotomy between the two entities can be noticed. Big business organizations including some international banks have adopted growth oriented communication policy measures primarily with the intention of enhancing growth drivers such as merger and acquisition (M&A) related synergies while smaller banks have basically relied on capturing niche markets.
Online banking related benefits have come to be identified with positive organizational outcomes as well. Therefore internal and external growth drivers of banks operating internationally are mostly determined by either the success or the failure of the average banks online banking policy. In fact according to recent World Bank reports nine out of ten companies engaged in international business operations have invested a greater percentage of asset related investment funds in ICT. This is because that such investment brings about a qualitative shift in their operational environment and capabilities (Bell, 1976). Such capabilities include incremental growth rates in financial management cash flow, quality, sales revenue and profits. While big banks have successfully made use of online banking activities to achieve these organizational goals, smaller banks have been less successful because they lack adequate resource portfolios to engage in competition at every level of operations.
Despite a series of online banking related investment successes by big banks, there have been some policy related lags too. For instance the operational environment of a bank is constantly influenced by the changing circumstances in the global environment. The current economic downturn has played a very important role in changing the fortunes of many banks. Falling demand and supply constraints have forced many banks to adopt variety of online banking policies in their international operations (Mackay, 2003). According to available statistics already there are signs of falling internet related investments in overseas operations of banks, though so far no fully-fledged study has been undertaken into a comprehensive assessment of the impact of the economic downturn.
Online banking strategy requires well defined organizational goals and such organizational goals might vary from one banks to the other. For example some international banks are faced with a different set of policy alternatives while small banks have a completely different set of priorities and opportunities (Mattelart, 2003). Therefore it is very important to consider multinational banks and smaller banks separately.