The dynamics of technological change in UK retail banking services: An evolutionary perspective

The purpose of this paper is to elaborate an evolutionary perspective on the process of structural change that has characterized the banking industry in the United Kingdom (UK). For this purpose, the evolution of retail financial services is contrasted against the backdrop of the implementation and development of information and communication technologies (ICTs). The paper delves into the sources and the effects of technological change in banking over a long-term perspective (1840s-1990s) to point out the significance of the opportunities and the constraints that have shaped the growth and development of this industry. This is interpreted as a three-stage evolutionary process driven by intertemporal coordination across several complementary domains, including activities of production, business organization, consumption and the underlying regulatory setting. It is concluded that the evolution of UK retail banking displays the characteristics of a distributed process of innovation in which developers of technologies, service suppliers and customers contribute to the process of structural change of the industry.