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IntroductionFiled Under: General

The authors analyse the impact of the increasing utilization of information and communication technology (ICT) and electronic commerce on the coordination of specific transactions in financial services. In particular, two business processes commonly occurring in the contractual relationship between a financial institution and its customers will be considered: bank transfers and stock purchases. The chapter focuses explicitly on the relationship between a bank and its customers which, in contrast to internal and
inter-bank processes that have already been subject of intensive research, has been neglected so far.

The basic principles of New Institutional Economics and the instruments developed in the context of the Transaction Cost Approach serve as theoretical background for the study and further discussion. The chapter develops and implements a proposal how to exemplify and to compare these processes under the varying influence of certain technologies. Therefore, a cost model is developed that will be used in the following to assess two basic transactions in this specific area. The intention is to reveal the basic phenomenon and to document the reasons for the current utilization of ICT in this sector by emphasizing relative reductions of transaction costs by means of electronic commerce. The basic statements and conclusions are underlined and illustrated for Germany in an empirical section. At the end of the chapter, future perspectives and impacts on the chosen topic will be given and derived.

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