Management Theory and Studies for Rural Business and Infrastructure Development, Volume 36, Number 4

Increasing the competitiveness of commercial banks on the basis of innovation

Rimas Andrijauskas, Meilutė Jasienė, Julija Staroselskaja


The main purpose of this paper is to analyze main innovations in retail banking distribution channels, identify the behavior of customers in Lithuanian market in respect of those innovations and evaluate their effect on Lithuanian commercial banks’ competitiveness. Literature analysis overviews major innovations of distribution channels in retail banking and the theoretical aspects of the effect of those innovations on customer behavior and how they help to better serve changing customer needs. The aim of the research was to understand the needs of Lithuanian commercial banks’ customers in the context of different banking distribution channels, customer behavior tendencies while using those channels, and what is customer opinion on how safe, simple and affordable different channels are. Survey was carried out by asking Lithuanian commercial banks’ customers to fill an online survey. The factor analysis was carried out based on survey results with the purpose to identify main customer segments in respect of different retail banking distribution channels. Factor analysis demonstrates that Lithuanian commercial banks’ customer segments differ very significantly in terms of what are their behavioral habits while using different distribution channels. This signals that in the context of fast development of modern and cost effective distribution channels, traditional distribution channels are still playing a major role in serving customer needs and remaining competitive in the Lithuanian retail banking market. This research could be used as a base for building an effective retail banking distribution channels strategy.

JEL codes: D41, O31, G21.

Keyword(s): competitiveness, innovations, commercial banks

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.