Direct Line Insurance and the Royal Bank of Scotland, 1985 to 1995: Technology, strategy and diversification

Direct Line Insurance was born out of the diversification strategies of the Royal Bank of Scotland (RBS). Within ten years of its foundation it had become the first retail finance institution to establish a clear competitive advantage based on applications of information technology. Direct Line is b...

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Bibliographic Details
Published in:Zeitschrift für Unternehmensgeschichte 2013-04, Vol.58 (1), p.54-72
Main Author: Bátiz-Lazo, Bernardo
Format: Article
Language:English
Online Access:Get full text
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Summary:Direct Line Insurance was born out of the diversification strategies of the Royal Bank of Scotland (RBS). Within ten years of its foundation it had become the first retail finance institution to establish a clear competitive advantage based on applications of information technology. Direct Line is best understood as a series of technological and competitive innovations that call into question the extent to which banks' competencies must change to master alternative delivery channels to the «brick and mortar» retail branch. The success of Direct Line also highlights issues in the incursion of banks into bankassurance and the development of a business model based on fee-income (as opposed to the traditional interest-income).
ISSN:0342-2852
2367-2293
DOI:10.1515/zug-2013-0104