Page 8 - Banking Industry analysis (H)

Threat of New Entrants

“The commercial banking sector
relies on creating trust amongst

clients, having a competitive

infrastructure, and information
about customers. For a new bank to

attract customers, the bank needs to create brand
awareness. The banks need to offer attractive

products and services that make customer defect from
their bank. The oligopoly setup makes it difficult for

new players to enter the market since the customers

are spread out across the five major banks (Office of
Fair Trading, 2010).” (4)

The threat of new entrants was seen to be low due to the

capital needed and government regulations; however,

international players with cash can enter the market and

potentially disrupt the status quo.

New entrants is classified as Medium