Importance of Banking Business Models Once Again Confirmed by BIS Quarterly Review

December 7, 2014 – In a paper published in the BIS Quarterly Review, Rungporn Roengpitya, Nikola Tarashev and Kostas Tsatsaronis use the cluster analysis to show the importance of banking business models.

A method used as well by Rym Ayadi and Pieter De Groen for a similar study entitled Banking Business Models Monitor 2014: Europe. The major difference lies in the classification of the banks: Ayadi and De Groen (2014) determine four models (investment, wholesale, diversified retail and focused retail banks), while Roengpitya, Tarashev and Tsatsaronis (2014) identify three models amongst banks in 34 countries (retail-funded commercial, wholesale-funded commercial and capital markets-oriented banks). One of the key findings of this study reveals that the financial crisis of 2007-08 resulted in a shift of banks towards more traditional business models, mostly towards “retail” activities, a finding that also emerges from the study of Ayadi and De Groen (2014).

Paper in the BIS Quarterly Review on Bank business models