Question

'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:

Questions

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?

Answer 1

Q1) It is inevitable for any company to face issues in the initial phases of implementation of any new technology or going online for its operations as it involves mapping the business requirements to the system capabilities most of which will be fits but there might also exist gaps.

But, the benefits from the technology implementation for the firm will be manifold compared to the initial hiccups. Below are competitive consequences of 'pulling out' of internet banking for the company -

1. The firm will initially find workaround for the issues in short-term but will fall behind the competition in long-term due to the low efficient paper and manual processes.

2. The demand for the branch personnel increases and banks get crowded due to the waiting time involved in the manual processes leading to customers switching to other banks that offer hassle-free services.

Q2) Below is the impact that a decision to 'pull out' of internet banking will have on similar companies in terms of technology-based initiatives -

1. Lower efficient manual processes increasing the waiting time for customers leading to customer dissatisfaction and lost revenues for the firms.

2. Fear of implementing new technologies in future due to the fear of failure and issues resulting from the implementation.

Q3) Below is the strategic role of operations of a Bank and the way it can improve customer take-up of its internet banking initiative -

Banking operations include both front-end and back-end operations which need to be highly efficient to reduce the costs and reduce the waiting times. Hence, the operations need to be made efficient to make the bank competitive. Implementing internet banking is a strategic initiative that helps the firm make its operations more efficient but it is challenging to sustain the efficiency if not implemented properly. The best way a bank can improve customer take-up of its internet banking initiative is to intoduce them to the initiative, provide all te required training to them, creating demos to understand the functionalities, providing them assistance through various avenues until they completely get used to it.