E-banking, governance and local banks: The Italian case

Timely adoption of e-banking seems crucial for all banks to secure future business. However, local banks' corporate governance patterns may retard innovation and, hence, their embracing of e-banking. Using data on Italian banks, this paper confirms that the adoption of ebanking was significantly more sluggish at banks with a low turnover of board members — the typical situation of local banks endowed with rather static corporate governance structures. However, the second part of the empirical analysis presented fails to identify impacts on bank interest rates stemming from increased competition from e-banking. The results suggest that local banks in Italy, even though lagging, may still have a window of opportunity to adopt e-banking and, through it, expand and improve their supply.