Banking and technological change
Scott Loftesness points to an interesting Federal Reserve working paper that discusses the impact of information technology on banking over the last several decades.
There's an assertion early in the paper that banks have "given away" the benefits of ATMs to consumers. But in exhange, they've lowered costs (there are now four times as many banking facilities without staff -- ATMs -- than there are staffed banks, though even banks with people have grown an average of 2.1 percent a year) and been able to facilitate a vast expansion of banking products that are possible only because of IT:
Posted by Mitch Ratcliffe at November 27, 2002 10:38 AM | TrackBack
Money market mutual funds, an alternative to bank deposits, grew at an average annual rate of 10.8% from 1984-2001. Corporate equity and corporate debt (bonds plus commercial paper), which are alternatives to bank loans, grew at annual rates of 10.0% and 11.3%, respectively, overtaking bank GTA by 2001. Finally, mortgage pools and other asset-backed securities – some of which are assets that were removed from bank balance sheets and some of which are alternatives to bank financing – grew at an annual rate of 13.7% over the interval.