In the past decade the financial services industry has been altered by the introduction of a new distribution channel, the Internet. The use of the Internet has provided financial institutions with new ways of reaching out to their customers. Through this channel, banks have been able to offer various traditional as well as new financial service offerings.
This medium, however, has also enabled new competitors to enter the market easily. Through the use of the Internet these entrants have been able to position themselves competitively and successfully in a short amount of time.
The introduction of the Internet and the effects of an economic downturn have resulted in increased competition in the financial industry. This increased competition has forced banks to look for ways of strengthening their bottom line. As a result many competing firms have made attempts at strategically aligning their distribution channels in an effort to gain a competitive edge.