Article
Re-modeling Retail Banking in the Crowd
December 2014| by Mehul Jain
Today, global retail banking sector is grappling with a myriad of challenges. The business environment has never been as difficult before, as it is now. In past years, especially post the global crisis in 2008, the industry has been characterized by rising costs to retain existing customers and add new ones, depressed profits, muted economic activity and low consumer confidence in investments. Citibank, the third largest bank in the US, closed its retail business in 11 markets across the world that were not profitable, to lower its operating expenses. It’s worth noting some of the vital factors that have put retail banking on cross-roads.
a) Increasing cost of regulations
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This implies that although they had a bank account they also used other alternative services for their banking needs. This is a clear indicator of eroding retail banking revenues and a shift towards unconventional banking options.
d) Changing consumer behavior and rising expectations – Today’s customer is a lot more knowledgeable and demanding than he was a decade ago. He needs convenient access to banking through multiple channels, greater control over his personal finance and decisions through customized advisory services and data analytics tools and an optimal customer experience across channels. According to a survey of nearly 4000 retail banking customers in US and Canada conducted by Accenture in 2014, 71% consider their banking relationship to be transactional rather than relationship driven while 51% want their bank to proactively recommend products and services for their financial needs. Internet and mobile banking has long been considered as a differentiating factor and constitutes an integral part of every banks digital strategy. However, in today’s context, consumers just do not expect high quality service through these platforms but also seamless integration between
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This disruptive innovation has been in the news for the last 5 years. The jury is still out and people divide opinions on the benefits it brings to the society and the risks it comes with. However, there is no denying the fact that intelligent factions of the society are looking at it as an opportunity rather than as a threat. As per Massolutions report crowd funding platforms raised $2.7 billion in 2012 and successfully funded 1 million projects and campaigns. This figure is said to have almost doubled to $5.1 billion in 2013. According to the World Bank report entitled “Crowdfunding’s Potential for the Developing World”, developing world could bring in $96 billion worth of investments a year by 2025 with China alone accounting for $50 billion. These statistics are pretty conservative as the study included only individuals with a certain minimum income levels and then factored only 1% of their investment portfolio allocation to crowd funding. No institutional investors were included in the
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Retail banking is the cluster of products and services that banks usually provide to consumers and small businesses through branches, the Internet, and various channels. “Bank of America serves more than 38 million consumer and small business relationships in the nation’s fastest-growing and most diverse communities. Sales, service, and fulfillment are provided through more than 5,800 banking centers and nearly 17,000 ATMs in 29 states and the District of Columbia. We also offer our customers the leading online banking service in the United States, with more active online bill payers than all competing banks combined, as well as a 24-hour telephone banking service that earns high ratings for speedy and easy self-service”. Bank of America is
“Consumers today is on the go, multitasking and reaching them is much more difficult than it used to be. Habits are changing high tech gadgets are a must and music and TV is dialed up on demand dictated by the consumers. Consumers are choosing how they want to interact with the environment on their turns. A trend that has created many challenges for companies that are seeking new customers. No longer do American Express has just a captive audience watching three networks or going to the mailbox as their only incoming source of information and correspondents. Consumers are choosing how they want to interface and interact. Marketers need to be where consumers want them. Consumers have various cards to choose from and repeat offers in the mailbox all over ruined with options and as a result, finding a good time to talk with marketers require more creativity. Today, there is too many messages, and American Express trying to figure out if anything getting through” (Kotler & Keller, n.d.).
The banking industry is under pressure in today’s business climate. Banks have been through big changes. There is opportunity, but there is also increasing competition. To be the preferred bank means changing “good enough” into a unique value proposition. And that means changing the way people have always done things, change on this level requires cutting edge technology. Change cannot be achieved with a simple directive or surface adjustment especially within the banking industry. It requires an innovative rethink of the entire system, in a strong partnership between bank leaders and their change agents. New systems and policies must support the strategy to be successful. The real test of a good strategy implementation plan is whether the people understand the strategy, are motivated and enabled to implement it, and actually start achieving its goals.
The Royal Bank of Canada (RBC) is a blue-chip financial services company, and the largest of its kind in Canada. The bank is considered a blue-chip company due to its relative low-risk as an investment. With over 16 million public and private clients in over 35 countries, the bank has a secure international financial holding. They serve a wide fiscal demographic; with wealth management services for investments and high net worth clients in North America, and general personal/commercial banking services available for the general market ("Royal Bank of Canada"). As well as being an internationally recognized brand, RBC has weathered extreme economic strain, for example, during the crash of the American housing bubble in 2008 RBC boasted a 9 month high in their stocks ("Corporate Profile"). This evidence indicates a history of financial security and future stability.
I was given the task to make an assignment on the subject of Business Information Management. In this assignment, I have to read and analyse a case study entitled RBS failure caused by inexperienced computer operative in India. After that, I need to make a summary of this case study because it shows what I understand in this case study. Besides that, the objective of this case study is to know the factors that have caused the system failure at Royal Bank of Scotland. The reason I want to know this factor because Royal Bank of Scotland (RBS) has faced computer meltdown with the loss of its share price as well as millions of customers unable to access their account.
Initially the bank’s core banking system was product oriented, but the need of the hour was to develop a customer oriented system, because the challenge is to build customer loyalty, cross sell, and enhance repeat business.
Introduction Pramuka Savings and Development Bank (PSDB) was incorporated in 1997 as the first private savings bank in Sri Lanka. Mr. Rohan Perera was the founder of Pramuka Bank and was the founder and chief executive officer of Seylan Bank previously. After resigning from Seylan Bank, Mr. Perera applied for license to incorporate a commercial bank from Central Bank Sri Lanka. But Central Bank only gave license to operate a Savings and Development Bank. But that was also a debatable topic.
In this case study it was stated that there were a problem happen in the outsourcing for the Royal Bank of Scotland. What happen was there were an error that happen during the routine software upgrade that cause million of that bank customer cant access to their account. The error happen when one junior technician in India was accidently wiped all the information during the routine software upgrade. The member of staff that was working under the program for the Royal Bank of Scotland, NatWest and Ulster Bank and it was based in Hyderabad, India.
Historical function of the investment banks in Malaysia. Discuss the function of banks as early as in the 50s-60s and make comparison with the 70s & 80s as well as what is new in the year of millennium.
This section was discussed about mobile banking and payments, innovative delivery channels, technologies for improved borrower identification and credit reporting, and adopting new technologies: the role of the market environment and competition. This section reviews the growth of mobile banking and payment systems and discusses technology-based business models and the role of improved borrower identification and credit reporting technologies in financial inclusion. This section also highlights that technology-based strategies for financial inclusion have varied substantially across countries and examines the features of national market environments that determine which technologies are best suited to enhance financial inclusion, as well as related to market structure and regulation that might make the success of some technology-based solutions difficult to replicate elsewhere. Major innovations in retail payment systems date back to the rise of card-based payment services. Credit cards became a wi...
Communication modern technological tools that have been enhanced by Information Technology are having an impact on changing the very structure and communication of banking. That is, clients are enabled to make their banking transactions whenever and wherever they want. Bank clients, by just logging on their online account, can transfer any amount of money from their account to any other account, check their last processed banking transactions and apply for loans and other banking services. According to Keyes ( 2000, p.591) 'electronic checks provide consumers with the benefits of convenience and safety while allowing billers to maintain their existing depository relationships with their banks'. Further, e-mails has enabled bank employees to notify their customers of any new enhanced bankin...
At one of our quarterly All Hands meetings, the president of our division discussed how growing the market share was critically important in the digital banking space. The key goal is to continue to lead this space in the future, but doing so becomes increasingly more challenging as new market competitors try to steal share. To keep ahead, we need to always bring our “A” game to the market. To create blue ocean strategies would require innovation, customer engagement, and out of the box thinking. We have to consider buyer utility, pricing, cost, and adoption. To do this would require us to be strategic about how we design, build and price our products. Even the way the business manages the different consumer segments is important. There is differentiation of the needs of different types of financial institutions. The customer centered brand management strategy we discussed in class is very useful to this type of organization. How we market to large national banks should be different than how we market to small town banks. Generally, small banks do not have the technology budget to invest in large scale digital channel solutions. Many companies decided to have different brands for their different customer segments. We discussed how this works successfully for car companies. For Digital Channels,
One of the reasons why banks adopted this new system, was the ‘boom’ in online shopping and the need for an online payment platform. For the bank themselves, online banking reduces customer service staffing levels, as well as improving speed and flexibility of business transactions. (Shih and Fang, 2004)
This is followed in section 5 by an analysis of the recent changes in the banking industry. With the development of the financial system, declining entry barriers and the deregulation of the banking industry make banks no longer the monopoly suppliers of banking services and reduce their comparative advantages which they usually hold in the past. Whether the reasons give rise to the existence of banks are still powerful will be examined here, while section 6 offers a way of considering whether banks are declining by looking at the value added by the banks. When the value added by banks is examined, banks are not a financial intermediation, which not only conduct the traditional services but also provide more diversified