Environmental Analysis

The banking industry is impacted by changes in its external environment from political, economic, social, technological, environmental, and legal factors. These may not be controlled directly by the companies in the industry, but the companies nevertheless might be forced to alter their models, pricing, revenue, and cost structures, etc. in response to changing conditions. Knowledge of external environmental trends can help predict opportunities and risks for banking products.

1. Identify some of the questions you might have about the overall industry trends (political, economic, social, technological, environmental, and legal, or others). You might include questions such as, What affects demand for new car loans? or, Who is likely to seek a mortgage in the next five years?" or "How can we protect ourselves from fraud?" for instance. Identify at least one question for each of the environmental factors (political, economic, social, technological, environmental, and legal).