“Big digital bank” vs “local bank”: How to cope with the controversial situations?

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Mauro Paoloni ORCID logo, Giorgia Mattei ORCID logo, Niccolo’ Paoloni ORCID logo, Valentina Santolamazza ORCID logo


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The Italian banking system has changed profoundly and nowadays banks have to adapt their strategies to attain an adequate level of profitability (Mattei, 2019). Digitalization and mergers and acquisitions (M&A) are useful to obtain this result. However, at the same time, they can have a negative impact on the relationship between the bank and the territory, compromising the local economic growth (Caporale, Di Colli, Di Salvo, & Lopez, 2016). The objective of this work is to understand if any strategies could be undertaken to maintain the territorial relationship even when M&A and digitalization have become necessary. The methodology used is an ethnographic exploratory single case study (Yin, 1984). The information collected using semi-structured interviews is interpreted through qualitative inductive content analysis (Elo & Kyngäs, 2008). The interviews suggest that even when M&A and digitalization have a negative impact on the relationship between bank and territory, these two processes, if well-managed, could both improve the bank’s profitability and the contact with the local reality. Therefore, if a strategic management process is defined in advance, it is possible to maintain, or, even gain profitability.

Keywords: Profitability, M&A, Banks Dimension, Strategic Management, Digitalization

Authors’ individual contribution: Conceptualization – M.P., G.M., and N.P.; Methodology – G.M. and N.P.; Investigation – M.P.; Validation – V.S.; Writing – Original Draft – N.P. and V.S.; Writing – Review & Editing – G.M.; Supervision – M.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G34, O33

Received: 29.09.2020
Accepted: 18.11.2020
Published online: 20.11.2020

How to cite this paper: Paoloni, M., Mattei, G., Paoloni, N., & Santolamazza, V. (2020). “Big digital bank” vs “local bank”: How to cope with the controversial situations? Risk Governance and Control: Financial Markets & Institutions, 10(4), 8-21. https://doi.org/10.22495/rgcv10i4p1