Leveraging corporate identity in the digital age

The emergence of the Internet has completely revolutionised industries and has restructured their value chains. Traditional “bricks and mortar” businesses are facing the prospects of losing their competitive advantage owing to the emergence of new competitors in the “new economy”. The regulatory changes in the financial services industry and the explosion in the use of the Internet for e‐commerce have given rise to unforeseen competitors in the banking industry – the “non‐bank” financial services providers and the “pure” Internet banks. These competitors are not restrained by the high costs of the branch infrastructure and as a result are able to differentiate on the basis of offering high interest rates. These players are fast and flexible. In spite of being newcomers, they have the potential to grow and recast the rules of the banking industry. Yet, incumbent banks still have the strongest sustainable competitive advantage: their corporate identity. Managers in the “new and old economy” must realise that corporate identity is an important strategic element that should be considered in the need to differentiate.