Banking Services and The Role of Banks' Network

Based on the network theory, the study examines how a network between local banks could strengthen the quality and the innovation of banking services. In order to describe the role that a network could play in the current banking arena, the paper tries to identify two main findings. First, it argues that banking network improves the economic performance and corporate decision of the members. The second finding is the network’s ability to reinforce the competitive position of local banks in the distributing process by improving quality and adding innovation to banking products and services. The study provides both theoretical and practical insights into the opportunity of a local bank to follow a network strategy in order to enhancing its value proposition. At the same time, it provides evidence of how a bank network – considered as a collection of local banks (nodes) and links between the nodes – can be a useful strategy for small financial intermediaries to enhance their role as a service provider for families and enterprises and to support their competitive advantage in the modern banking system.