2.7.5. Porter 's 5 Forces
Figure 2.10: Porter 's 5 Forces
Source: Reprinted by permission of Harvard Business Review. From "How Competitive Forces Shape Strategy" by Michael E. Porter, March 1979. Copyright © 1979 by the Harvard Business School Publishing Corporation; all rights reserved.
The Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:
i. Supplier Power: Banking is now a capital intensive business with high fixed costs and low margins (Carrington et al., 1997).
ii. Buyer Power: Customers have a choice of three other major banks to turn to when they need better service and lower prices.
iii. Competitive Rival...
... middle of paper ...
...ment system risks. Borio and Bergh (1993:63) maintain that ensuring the safety and soundness of the payment system largely means seeing that safeguards are put in place to limit the likelihood and repercussions of a failure to settle obligations – the typical trigger and propagating channel of a financial crisis – through a better distribution and control of participants’ liquidity and credit exposures.
According to Digidata (2015), payment processing and reconciliations are part and parcel of many businesses in the financial services industry. Daily banking and investment transactions need to run smoothly, consistently and in an important context of audit control and risk mitigation. Large transaction volumes, manual intervention, different banking systems, service types and processes mean that this necessary aspect of infrastructure is inherently complex and risky.
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