Professor Seabrooks comments:

suggest you put your executive summary on your home page (this page). Insert links in the executive summary text so the reader (me) can follow your arguments through to the detailed pages.

I also suggest that you start each page on your wiki with a summary of the key points in paragraph form. Then the reader quickly gets the key idea, and can then look down the page for the detailed information supporting the summary.

Overall, remember that the wiki has to be as well organized and easy to understand as a written paper.

Instructor Comments 4/16

You guys are making good progress
You need to focus on "the impact of the internet" rather than retail banking as a whole. You've done this in parts but the emphasis is uneven
You need a little more depth in the services that retail banks offer, how they make money and how the internet has affected them. I have posted some articles that explain how retail banking works, and these should provide enough detail for you. You should try to explain how different products have been affected by the internet in different amounts e.g.
- Deposit gathering
  - Collect deposit with low interest payment and use that deposit to make a loan to collect higher interest
- Lines of credit, Credit cards, Mortgages
  - Lines of credit, Credit cards, and mortgage are different type of loan that bank will use to charge higher interest rate.
- Payment services (incl for small businesses) - competition from PayPal?
  - Payment service is one of bank’s businesses, which charge fee for financial transaction. PayPal could be a potential competitor for the bank to take over financial transaction business from the bank.

Try to develop a "storyline" (i.e. a key theme) about how the internet has affected the retail banking business

1. Internet has provides conveniences, 24/7 and accessible from anywhere.

2. There are banking functions that can be better serviced through Internet(virtual banks)

(balance checking, bill payment, and money transfer)

3. Internet only banks are profitable(lower operating cost), and can provide lower fee to customers

4. However Internet banking will not completely replace traditional banking anytime soon.(->Business model)

You can combine competitive strategy and marketing strategy if you like, but they are slightly different:
- Competitive strategy: "how will I beat my competitors?" e.g. "I will focus on serving business customers better than anyone else"
- Marketing strategy: "how will I create profitable transactions?" e.g. 4Ps: "I will offer the lowest price for wire transfers"

If you work with the material you have plus what I've put on the wiki you should have enough. Don't hesitate to ask if you need help.

RDS

Focus on the internet aspect of banking, not on the banks as a whole. I'm looking for you to explain how the internet has changed the banking industry.

Questions for Prof. Seabrook from 4/6:

1. Can we use powerpoint for our presentation as opposed to Google docs? We all know how to use powerpoint and do not have experience using Google docs. No. The whole point of this class is to learn new things! Google Docs is very similar to PowerPoint, except that it is a tool where you can all work on the same file. Last year's students learned to use Google Docs successfully and so can you.

2. When trying to determine profitability for Wells Fargo/Wachovia I noticed that there were several different financial statements on the investor relations page and I was not sure how to answer profitability as a whole? I decided to use the statement that concentrated on loans and deposits. Any suggestions please? Jeff I will have a look and get back to you.

-Yes, you are on the right track. If you just research the traditional retail banks your project will be too boring. You will find that they all do pretty much exactly the same thing: offer online bill payment etc. But the much more interesting and important effect of the internet on banking is the additional competition from internet banks and other financial institutions competing for deposits, mortgage lending etc. Some banks sell insurance services too (such as annuities), but direct sellers compete there also. You should look at all the major lines of business of retail banks and see how the internet has affected competition.

---You Need to Clarify the Scope of Your Project ASAP

As we discussed yesterday, banking is a big industry. It can include:

Retail banks: Citibank, Bank of America, Chase have big consumer and business banking businesses
Brokerage houses: Merrill Lynch (now part of BofA), discount brokers such as Charles Schwab, TD Ameritrade, many others. The big retail banks also have wealth management divisions competing in this business
Investment banks: Goldman Sachs, Morgan Stanley,...
Credit card issuers? - American Express, CapitalOne etc. provide lines of credit. These are not banks but they compete with banks for short-term financing. Many banks issue credit cards

Other financial services companies include asset managers (Putnam Investments, Fidelity,...), as well as private equity firms, hedge funds etc. However, these are not banks.

You need to be clear on what you mean by a bank. One definition might look something like this: "Provides FDIC insured checking accounts, savings accounts and loan financing (including car loans and home loans) to individuals and small to medium businesses" (you may find a better definition online somewhere).

Once you define your industry you can figure out who the competitors are

If you use something like the above definition you have excluded brokerage houses and investment banks. However, you still have some work to do to figure out who is in the industry and who competes with it:

Charles Schwab, Ameritrade and Merrill all offer banking services
ING offers an internet bank that takes deposits and usually pays higher interest that the main street retail banks
Everbank offers online checking, HSBC direct offers online savings, E*Trade bank is an internet bank with no physical branches...
Ditech.com, Countrywide (now taken over by someone - Chase?) and others compete to provide loan financing, especially mortgages (in the boom time! There's been a lot of consolidation since)

Some ideas for next steps

Think about the impact of the internet on this industry
- When the internet became widely used some people predicted that bank branches would practically disappear, replaced by ATMs. Has that happened? Why or why not?
- How has the internet affected competition in the banking industry?
- How do internet-only banks compete with tradional full-service banks?
- How has the recent banking industry near-collapse affected internet banking?
Find an industry survey e.g. check out the American Bankers Association statistical data and their Overview of the Banking Industry; see also this review of internet banks [found by googling "internet banking" and "online banking" - a good place to start your research!]
When you're done with comments from the instructor you may want to create a page called "Instructor Comments" and move them there, so my comments don't mess up your wiki