The growth of narrow banks in the private market - a study of three banks

Abstract

The present study is a case study with the aim to investigate how narrow banks grow larger, how they take greater share on the private market and which function they fill. To achieve the purpose of this study, we chose to interview representatives of three different narrow banks to closely see how they work with a starting-point from the theory of the balanced scorecard, which consists of four parts, namely the financial perspective, customer perspective, internal business perspective and innovation and learning perspective, all of which being applied to see what impact they have on the study results. The study shows that the deregulations of the financial market made it possible for new players to establish themselves in the private market, where the narrow banks constitute a growing and vital element, filling a very important function. By taking advantage of some gaps in the market and offer certain financial services which in many respects are not covered by the larger banks, the narrow banks studied demonstrate their ability to maintain their competitive position and even increase their shares in the private market. Their relatively small size has both advantages and disadvantages, the former outweighing the latter. Furthermore, our material shows that the four parts of the theory of the balanced scorecard are, though in varying degrees, well integrated in the strategy of the three narrow banks studied.