New technologies, information reusability and diversification: A simple model of a banking firm

This paper develops a model of banking technology of production and processing of information defining financial products and services as sets of information. We distinguish final and simple products. Final products are sets of simple products. Simple products are activities based on the production and management of information. We present a three-period model to examine the technological factors influencing banking diversification, specifically new information technologies. The model also studies the main implications for price and service competition as well as for industry structure. (C) 2000 Elsevier Science B.V. All rights reserved.