CASE STUDY [\'First Bank\' PLC] \'First Bank\' has recently begun to offer Inter

Question

CASE STUDY ['First Bank' PLC]

'First Bank' has recently begun to offer Internet banking to extend its range of services to the customer and decrease the demand on branch personnel. However, the web site has been experiencing difficulties with a slow response rate to customer inquiries. Demand for the Internet service has also been much lower than expected. As operations manager the company requires your view on the following issues:

1. Explain the competitive consequences of ‘pulling out’ of internet banking for this company.

2. Discuss the impact a decision to ‘pull out’ of internet banking will have on this company and similar companies in terms of future technology-based initiatives.

3. Identify the strategic role of operations of a Bank and explain, how can a bank improve customer take-up of its internet banking initiative?

Explanation / Answer

1. Internet banking has become the need of the day. The decision of the bank to introduce the internet banking is to overcome the difficulties of the bank employees as they find it difficult to handle the large number of customers and also to make banking handy. Now that the bank is facing a trouble as the response to the internet banking is slow from the customers, it would be a bad decision to pull out the same. The consequences of it may be competitive as well as a blow to the future development. Any change in the technology or the system will be imbibed by the society very slowly. As the banking sector deals with money it is obvious that the customers may show resistance to change to internet banking. While all the competitors of the bank change to net banking and this bank alone pulls out, the efficiency of the bank would be at stake. The employees of the bank would have a very hard time in doing even the minute jobs for the customers which they would have done in fraction of a minute through internet banking. The processing time will be too long and the customers will have to spend long hours in the bank to have their job done. The competitive banks implementing net banking will have relatively less crowd in the bank and the efficiency of the work woud be high. More over the bank can expand its horizons through net banking by finding new customers through new technology. By pulling out the technology the bank may end up in losing its position in the business market.

2. In the global business world change is inevitable. Internet banking is also such an evolution in the banking sector. With the growing population and the increase in the number of account holders it would be very hectic for the bank to handle all the customers by itself. The customers will have to approach the bank for deposits, with drawal and even for knowing their account balances. This would make the banking process very tedious. Any the bank will be stuck up in doing the clerical job only. When the customers find some other bank providing new technolgy they would change to them and old banks will be out of customers. When ever there is a change in the technology the company should embrace it and educate the customers to use it and also make it user friendly. As in the competitive business world only the fittest could survive.

3. Implementing the internet banking can be a challenge to the banking sector as the idea is new and the customers who are used to do every thing manually may not accept the sudden change. This initiative can be implemented succesfully by operations department of the bank by following certain strategies. First stage being knowing the customers. The bank has to know the customers and sort them in the aspect of age and education qualifications. The aged and not so educated customers would be the one who are reluctant to accept the change. The rest can be given a brief about the net banking through telephone or representatives. The next step is to educate the customers about the net banking facilities and options and make them understand the time they would save if they switch to net banking. The bank should have a strong customer service team and helpline numbers for the customers to gain the trust of the customers. Even after implementing these strategies, it will require lot of patience and time as the acceptability of the customers vary from person to person.

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