Renata
stasiak – betlejewska[1]
Stanisław
borkowski[2]
The
computerization as one of main directions
of the retail banking development
Abstract: Changes happening in
competitive surrounding of the financial services sector as well as tendencies
in behaviours of market customers forced retail banks into fixing their
attention on seeking new possibilities of
the activity development possibilities and new ways of bank organization
management. Potential
possibilities, which are created by dynamic progress in the scope of computer
technologies development, caused that
the computerization had become one of main directions of the retail banking
development in
The motives as well as connections of the retail
banking computerization with bank strategies and effects
of introducing new computer technologies at chosen banks developing the retail
banking in
Key
words: retail banking, computerization, computer projects, strategy
1. Introduction
The entry of Poland to the European
Union, which means also opening of the Polish bank services market for banks
coming from West-European countries hence the increased degree of the
competition on the bank services market forced retail banking into taking new
quality, directed mainly for adapting the offer action to needs of the
customer, standards of
the innovative service and the competitive offer.
A high profitability of assets was a
positive side of polish retail banks for a lot of years, what than resulted
from the low financial lever and low scale of assets. Bank assets return indicator,
measured with gross profit, amounted to the 1.3%, while the average interest
profit margin amounted to the 3.6% in Poland in 2001 [Stasiak – Betlejewska R.,
Borkowski S., 2007]. The profitability of banks is to a considerable degree
sensitive to the interest rates decrease. Nowadays, when profit margins more
and more approach to the level in
the European Union countries, worsening the banks effectiveness follows.
Analysing
the structure of banks profits in
In a view of differences, which are
noticeable among native retail banks and
West - European banks, the retail banking in
of assets, to differentiate sources of revenue, to develop services providing
with profits on payments and the commission.
Taking the specificity of rival
financial institutions into consideration, retail banks concentrated their
action in period 2004 – 2006 on [Stasiak – Betlejewska R., 2006]:
- on the side of the market on:
fitting the strategy to anticipated changes in behaviours and expectations of
customers, concentrating on services with the highest value added, cross selling (package deal consisting
in the connected sale a few, related financial services), improvement of the service
standard, the course of loyal programs,
- on the operation side on: the
diversification of financing sources with using the capital market instruments,
the increase of the financial lever, the development of the active allocation
of capital tools in the banks framework, streamlining risk management systems,
standardization of procedures, the technology development.
Every bank, carrying operational
activity out, enlarges and modifies own action area through: implementing new
services, creating essential procedures and rules,
the implementation of next distribution channels. Diversified needs of
customers forces banks to implementing the offer orientated to individual
market segments in the form of: cheap and uncomplicated services, simplified bank
credit procedures (scoring), the
investment consultancy or even a tax consultancy for individual high profits customers.
A growth of an interest in credit, accounting and protecting services is being
forecast (mortgage credits, credit cards, in debt instruments) (recommending
the payment) in the area of traditional bank services.
2. The meaning of computer technologies in the bank strategies
A need of seeking new solutions in
the scope of new computer technologies, besides natural seeking new product and
organizational solutions, is an element being characteristic
of contemporary strategies of banks developing in the retail area. Making aware
of the need of new computer solutions implementing induces banks for tying
computer investments together with strategy purposes. Banks, planning
introducing computer technologies are asking themselves: what investments in
computer technologies should one make in order to enhance the bank strategy? [Earl
M., 18, 2000].
Computer projects are one of more
important elements of the contemporary bank strategy, mainly because of them
complicated character. These projects cause changes both in the bank work organization
as well as the structure, changing entire bank management philosophy. New
computer technologies are treated often, in bank operational plans, as the tool
supporting the bank’s development. These technologies constitute the condition
of the effective realization of the individual customer service strategy. Investments
expenses connected with computer technologies’ introducing are concentrated on
areas giving the chance of achieving the long-lasting advantage over the
competition. These areas have a strategic importance, bringing perceived and
felt by the customer benefits. These are mainly undertakings connected with
inserting new distribution channels and enabling an analysis of needs and customers
behaviours [Stasiak - Betlejewska R., Borkowski S., 2007].
Majority of retail banks in
A sphere of bank service distribution, an area of computer technologies applying,
is the most visible for customers and having essential operating and strategic
meaning for the bank. In own strategies, banks demonstrate an intense interest
in service distribution channels’ diversifying. Fixing one's attention on
searching of new forms of bank services distribution results above all from the need to solve a
problem of unprofitable units network and possibilities, which are given by new
computer solutions, becoming profitable a year by
a year. At the moment, developing of widely comprehended home – banking’ services
is
a main point of the retail banking development’s strategy, what is also
connected with
a change of the bank activity model. A traditional bank services model including
the service sale in the Internet is the most popular model at present.
Moreover, banks adapt computer
technologies, which are imposing the duty of operational plans’ integration
with implemented computer solutions straight out how it happens in
the case of CRM system’ implementing. An appropriate the CRM technology’ implementing
depends on earlier implementing of customer relationship management’ strategy.
The computer way of customer contact management is known as the crucial element
of contemporary enterprises strategies, in it among others and of banks
strategy. In the case of the mBank, technology e-CRM lets realize earlier created
communication strategy and promotional campaigns strategy, as well as effective
offer creating.
Saying about connections of computer
technologies with bank strategies one should emphasize that computer solutions’
implementing should earlier appropriately be planned and be reflected in
operational plans of the bank. Previous integrating the process of
the computerization with the bank strategy is required. Only such an attempt
will allow appropriately to determine computer needs of the bank and to design
the system, which is supposed to support operational activity of the bank. A
principal aim of the bank modernization strategy should be an integration on
new computer solutions with existed solutions. Moreover, it is consequence of
accepted computer solutions. It allows
not only for correct functioning of introduced technologies, but above all for
enabling the access to all information gathered in each of adapted systems.
3. Inspection of
computer projects realized in the retail banking in
2001 – 2005
In order to showing character of
action connected with the retail banking’ computerization, more important initiatives of computer projects
will be below discussed. There are some banks were included in the research
group like: PKO BP S.A., ING Bank Śląski S.A., Bank Zachodni WBK S.A.
and mBank, which is a part of company called BRE Bank Group, constitutes the
research object presenting the virtual banks group (leading retail activity in
the Internet). The selection of research subjects wasn't accidental, because
each of these banks is representing the different source of the origin of
foreign capital (initiating and financing new computer and organizational solutions),
different technological solutions and the diversified scale of taken market action.
A motif of the computer technologies adaptation in order of supporting
activites was detailed both in the PKO BP S.A. strategy and in different bank
strategies analysed in this article.
Bank PKO BP S.A., in 2001 –
the result of the laws update, especially update of the Accountancy Act’s regulations
(which obliged issuers of securities let get to the public turnover and banks
for making out consolidated financial report according with International Standards of the Accountancy
- MSR). It caused the need of adapting to new principles of computer systems
accountancy as well as widening the functionality of new Integrated Computer Cystem (ZSI).
Widening
the functionality of the system was connected with PKO BP aspirations to the
achievement
of computer solutions level, typical of adopted standards in leading European
banks. Moreover, a number of benefits resulting from the operating processes’ standardization,
simplifications of the infrastructure and services management well as increasing
the operating safety, are an effect of this process.
The ZSI implementation
provided simpler and much safer access to offered services as well as
shortening the time of the customer service in bank units. With reference to
prices of offered bank services, the mode of planning them, implementing and
the alteration, ZSI lets for the better control over the agreement of future
initiatives in the mentioned above scope with assumptions of the PKO BP strategy
and pricing policy. The ZSI Implementation also enabled full
replacement of bills, in spite of the fact, that current conception of main
unit was supported. The realization of the project of ZSI implementing was
connected with: with
the change of procedures and unit processes, the unique scale of the project,
the need of bank workers training, complex character of organizational changes
at the bank.
In 2002 – 2005 bank PKO BP S.A. was
realizing strategy of the modernization
[Strategy
of PKO BP S.A...., 2006]. A planned and carried out of the unit’s equipment
modernization and procedures raising process stayed in frames of mentioned
strategy, what was combined with the new computer devices’ appearance at PKO BP
institutions to the much wider scale than so far and with changes in the
organization of the bank work. It next caused standardizing of organizational
structure’s of distribution bank network.
Exploiting abilities created by the
realized strategy of the modernization and judging changes of outside
conditioning, in 2006 PKO BP S.A. set about to the new accomplishment of
strategy for 2006 - 2008 determined with name of the strategy of the innovation [Strategy
of PKO BP S.A...., 2006]. The realization of this strategy has to provide
to the bank updating and boosting activity on new markets as well as creating
the new quality of the service offer based on modern solutions in the scope of
management, in particular in the scope of
the corporate culture of the organization [Strategy
of Powszechna Kasa Oszczędności Banku Polskiego S.A. for 2006 - 2008].
This strategy are pointing at areas of the innovation, so as: the computer
development, the modern organization of the sale, the product innovation,
modern shaping internal processes.
The ING Bank strategy is also
demonstrating the intense pressure on computer solutions’ exploiting in the
development of retail services. The area of the Operation and IT (computer
technologies) in the ING BSK S.A. is an important element of the strategy
purposes realization. This bank, beside supporting business sectors in the
scope of implementing new services, concentrates on the realization of projects
in the scope of controlling systems improvement and the CRM system, together
with other members of the ING Group. Bank concentrates attention on raising of
the work and financial sources’ effectiveness. In the order of streamlining of
costs operating, increasing the level of the activity of operating area
automation, the simplification and the standardization of bank procedures, the
outsourcing of chosen kinds of services, the cooperation with other the ING
Group’s units in Poland (in the scope of distribution channels development,
computer science and others).
In
2001, the bank started the BSKOnLine system - the Internet banking,
which enables: starting the access to the system for every holder of the
account in ING Bank Śląski, reserving bank cards by the Internet, the
professional support for customers on the part of the HelpLine Adviser, standing orders free of charge and relatively
cheap transfers. The bank is also heading in direction of improving contacts
with customers. Acting in this destination, at
the beginning of the March of 2001, as part of the service HaloŚląski, started Call Centres which is available
twenty-four hours a day, through seven days during the week. Using services of
the operator, customers can use majorities of services, being in the offer of
the bank, i.e. to open an account, the savings bill and fixed-term deposit
accounts and to fold recommending the transfer, the standing order, the
conclusion for granting the limit of
the debt, the order of a credit card and the service HaloŚląski. A functionality of the telephone automatic
banking was also widened in the same year also (a new system of the handling of
transfers was implemented, a system of collecting charges was automated, news
bulletins were started the WAP and the SMS).
As a result of new computer
solutions’ implementing, 259.4 thousand of customers used services HaloŚląski in the end of 2001, while year earlier 102.6
thousand. In 2001,
the number of users of the MultiCash
system amounted
In the realization of strategy aims
accepted for years 2003 - 2005, the bank used effects of sell action carried
out in 2003 so as: implementation sell conception of sell network in STAREO
and Centres of the Corporate Banking, or pricing restructuring [Report of
the capital ING BSK group’s activity in 2004 and 2005]. Shaping
long-lasting and valuable relations with present customers became the base of
the realization of adopted strategic purposes. A cross - selling is an
important element here, that is offering services of different members of the the
ING Group (of individuals of the investment funds participation, pension funds,
insurance products, the broking, mortgage credits, the leasing). The ING BSK continued
the strategy in the scope of the bank network’ development, mainly in the
Mazovian, Great Poland province, Pomeranian and
a direct contact with the bank worker, in it based on the consultancy. In the
fishing for 2004, the ING BSK began the sequence of projects, which concerned
ordering more further improvement of the bank management system, in it of
organization of Regional Operating
Centres and the market expansion of the retail banking. A
development of an operation, services and technology has an essential
meaning in the ING BSK strategic assumptions.
The ING Bank Śląski invested into human resources, qualifications and
solutions in order to build place for the more further development of the bank
in 2004. For achievement of this purpose the bank appointed the Department of Administrative Services, what
enabled creating of dedicated organization, constituting the support for
business individuals units divided in sections of Sectors of the Corporate and Retail Banking. In 2004 the bank
also began
the accomplishment of the program being aimed at active transforming the
infrastructure
of electronic channels of distribution, being in having it, into the
multichannel platform of sell, distribution and services. The bank formulated
the also new strategy for Call Centre,
which predicts the development and the
Call Centre transformation into the active channel of the sale (i.e. in
contact centre). Thanks to the completion of operational plans in 2004 indeed
a number of customers using electronic channels of distribution expanded (the
number of the BankOnline system users
rose by the 21.2%, number of the telephone banking HaloŚląski’ customers rose by the 22.6% [Report of the
capital ING BSK group’s activity in 2004 and 2005, Katowice, February 2005]. In
the sequence of 2005 indeed a number of ING BSK customers using electronic
channels of distribution expanded (the number of users of
the ING BankOnLine system rose by the
136.8%, whereas of service of the telephone banking HaloŚląski by the 26.4%).
In the case of Bank Zachodni WBK,
the adaptation of computer solutions gained
the strategic significance already in the moment of the coming into existence
of the bank, that is of a connection the Bank Zachodni and Wielkopolski Bank
Kredytowy. Both banks took joint works for projects enabling their integration
and effective using of synergy resulting from it. It was before finalizing the
bank merger in 2001. The Project B1 was the most important
project, in frames of which the Information Central Bank System (ICBS)
[Report of the Bank Zachodni WBK’ Board for
activity in 2003].
New processes and procedures were
worked out as well as a scope and a division of tasks in units were charged as
a result of project B1 implementing. The system implemented and strengthened
the culture informed the customer and the bank service sale as well as it streamlined
operational activity of units. At the same time, together with the realization
of
the B1 program, works on standardizing the offer, procedures connected with
services and activity of individuals bank units at both banks last. The Centre
of Wielkopolski Bank Kredytowy’ Cards and The Centre of Bank Zachodni’ Cards
cooperated in the scope of
the shared offer, as a result of this network of cash machines were connected.
In years 2002 - 2005 Bank Zachodni
WBK carried out corporate strategy “For first: Customer”. According to strategy’s
assumptions, the bank concentrated on the development of areas regarded most
perspective, that are sections of the class of the Premium service in
the sector of individual customers and the SME's (small and middle size
enterprises).
The other direction of bank action had complementary character and consisted on
the structure and the main service sale improvement (mortgage credits, credit
cards,
the leasing, investment funds). Computer technologies performed the role of
resources, which had the task streamlining processes and credit procedures as
well as contributing to increasing the cost effectiveness, the course of distribution
channels and staff improvement. Thanks to implementing of new computer
solutions, clearly sales level of the bank rose compared with 2001 year. The
most spectacular increase takes place in the area of investment funds
- 1,646%. Value of given mortgage credits and concluded leasing agreements rose
appropriately by the 82% and the 79%. About 76 % also an amount of credit cards
increased in the instruction of bank customers [Report of the Bank Zachodni WBK’ Board for activity in 2003].
In
a bank productivity increased in the scope of credit application processing,
what let keep
the high standard services, at growing dynamics of the mortgage credits sale.
The BZ WBK mortgage credit became leading proposal on the market, what was
confirmed by the monthly “Money” (on the head of the most price competitive
mortage credits’ ranking on the Polish market May of 2002). Credit and housing
loans given to individual customers in 2002 achieved value 790.7 mln zloty,
i.e. about 82 % more than in 2001.
In 2004 BZ WBK concentrated on
increasing the amount of electronic operations by electronic services
improvement by the offer improvement as well as extending the offer of credit
cards. To this purpose a functionality of the home banking service was extended
(BZWBK24
application), adding next services successively. Moreover, in the
February of 2004 the BZ WBK, as first in Poland, implemented smsKod
service for BZWBK24 users
using mobile phones, what enables making remote operation for customers in the
scope available earlier only for token owners. Service, which are realized with
the help of the smsKod, were recognised
by the monthly “Chip” as a safety in the 100%. At the same time, electronic services
of the BZ WBK were on the highest place in the country in the ranking of
protections practiced by Polish online banks, [report of the monthly
“Chip", December, 2004].
The bank development strategy in
2005 was connected with a dynamic sale growth in
the scope of telephone and Internet channel. The telephone banking was
supplemented for
the possibility of making standard transactions through the phone with the advicer/teleworker
help. The 2005 year was also connected with carrying the mass migration of
credit cards out to the microprocessor technology, what was supposed to
guarantee adapting the offer of
the bank for refined standards and to minimize losses connected with frauds.
A special evidence for the fact that
the computer technology is an indispensable element of the development
activities in the scope of the retail banking, there is mBank strategy, because
it constitutes the innovative element on the market of financial services. This
strategy seems to be straight in content, what the mission of the bank is
certifying: “The maximum of the benefit
and comfort”. Modern technologies, used at the mBank, let make any
transactions via the Internet, the stationary telecommunications, mobile
communications, and via the mKiosk
network and Financial Centres. The mBank created an innovative, comfortable and
just enough safe model of the remote service for customers using the most
modern technology. The Internet technology constitutes the basic medium of the
communication and the platform, on which all operations are taking place here.
Thanks to applying this technology, a bank operation are possible according to the format: 24/7/365, what means that
the customer can use financial services not only 24 hours, 7 days during the
week, 365 days in the year, but these services are also available to it in the
any place in world. The availability of financial services is provided not only
through the Internet, but also with the help of mobile devices and different
possibilities of widening the functionality of offered service model, what
constitutes the value added for customers. In the sequence of five years of
activity, the mBank raised 1 million of customers and the over 4 bn zloty of
deposits, what is making it one of
the the around 20 biggest online banks on the world and one of the
Data of mBank (state for the end of
2005):
-
1 015 thousand of customers,
- 1 325 thousand of bank account,
-
4.04
bn zloty of accumulated deposits and 0.57 bn of assets of the Supermarket of Investment Funds - SFI,
-
1.6
bn of credit given to the zloty,
-
48.7
thousand of credit cards,
-
529 thousand credit cards,
-
131,7
thousand of the Supermarket of Investment Funds - SFI consumers,
-
12,4
thousand of consumers using eMAKLER service,
-
18
thousand of selled insurance policies,
-
-
870
years and 4 days and 2.5 hour spent on sides of the mBank by mConsumers,
-
7
969 366 phones get back by mLinia,
-
95
459 053 of visit at www.mbank.pl,
-
over
the 100% increase of the number of credit cards
(with granted limits in the amount of the
-
35%
eKARTY sale growth,
-
over
1000 shop windows in the Polish Internet of accepting mTRANSFER payments.
4. Summary
Analysis of the strategy of those
banks (the PKO BP, the BZ WBK, the ING BSK and the mBank) confirms the
legitimacy of the statement that computer technologies are an integral part of
the strategy of banks developing activity in area of retail banking, because of
their meaning in the development of services. In the process it is possible
also to state that services of the home banking became the base of the
perspective development of the banking, because thanks to them banks see not
only a considerable rise in the profit, but above all activities are reducing
costs. The realization of computer projects, which are reorganizing banks
activity, behind itself is also resulting in the necessity of incurring huge
costs. However in a way
a prospect of recruiting the considerable number is equalizing these costs via
customers of electronic channels.
Literature:
1. Earl M., IT strategy in the new economy, Financial Times Mastering
Management, Part Twelve, December 18, 2000
2.
Stasiak – Betlejewska R.,
Borkowski S., Bankowość elektroniczna w ocenie klientów
banków detalicznych w Polsce, [w:] IT w organizacjach gospodarczych,
[red. nauk.] Kiełtyka L., Wyd. "Dom Organizatora", Toruń,
Polska, 2007.
3. Stasiak – Betlejewska R., Borkowski
S., Banks' Activity in the Scope of Cost
Management and Profitability, [w:] Ekonomika: problemi teorii ta praktiki.
Zbirnik naukovich prac'. Vip.231 T.IV,
4. Stasiak – Betlejewska R., Borkowski
S., The Role of a Foreign Capital in a
Process
of the Computerization of the Polish Bank Sektor, [w:] Ekonomika: problemi
teorii ta praktiki. Zbirnik naukovich prac'. Vip.231. T.IX,
5.
Strategy of Powszechna Kasa Oszczędności Banku Polskiego S.A.
for 2001 - 2004, Departament Strategy of PKO BP http://www.pkobp.pl/index.php/id=strategia/zone=-1/section=ogol
z dnia 01.12.2004.
6.
Strategy of Powszechna Kasa Oszczędności Banku Polskiego S.A.
for 2006 - 2008, Department Strategy of PKO BP S.A., http://www.pkobp.pl/index.php/id=strategia/zone=-1/section=ogol
z dnia 01.12.2006.
7. Report of the capital ING BSK
group’s activity in 2004 and 2005,
8. Report of the Bank Zachodni WBK’ Board for activity in 2003.
9. report of the monthly “Chip",
December, 2004
10.
www.mbank.com.pl
z dnia 20.02.2006.
[1] mgr inż., The Częstochowa
University of Technology, Department of Management, Division of Production
Engineering, 42 - 200Częstochowa
ul. Armii Krajowej 19 B,
[2] Prof. dr hab. inż., The Częstochowa
University of Technology, Department of Management, Division
of Production Engineering, 42 - 200Częstochowa
ul. Armii Krajowej 19 B,