Business Management Articles
/ Banking Service Management


by Rene T. Domingo (email comments to

Conventional banking and finance (B&F) managers using conventional management may not be ready and equipped to cope with the fast changing competitive environment, market globalization, technological advances, and increasing sophistication of the customers. The B&F manager has to be reinvented and retooled to survive in a borderless playing field levelled by globalization and information technology. Traditional skills based on functional, bureaucratic orientation and bean-counting are not sufficient or even relevant in maintaining and increasing market shares, especially the "share of wallet". Skills and expertise in cash flow management, risk and portfolio analysis, restructuring, mergers and acquisitions, transaction management, management reporting, and cost reduction are not longer guarantees and indicators of competence in a dynamic, seamless economy.

The new B&F manager should be a process manager, service driven, customer-focused, global in outlook, and literate in cutting edge technology. He should be able to operate efficiently in a seamless organization, rather than inside a box in the middle of other boxes. He should be an opportunity seeker rather than problem solver, a revenue booster rather than cost reducer or downsizer for that matter. His core competence is his expertise in delivering world class, customized and borderless financial services, employing technology and productivity as his primary resources. He does not do trade-offs, but endeavors to enhance services to clients while cutting costs at that same time. He looks at reengineering systems as the best means to create the best possible service to customers. He understands that speed of service is critical to maintaining customer loyalty. This includes responding to customers needs and requests faster and faster than expectation and competitors. One bank promises new ATM card issuance within 10 minutes and completion of any deposit or withdrawal transaction within 3 minutes. MBNA credit card company exemplifies the new wave of financial management anchored on speed of service and mass customization. Its strict standards include customer address change within one day, two-ring phone pick-up, calls transferred to appropriate party within 21 seconds, credit line increase within 15 minutes. It has daily tracking of actual performance versus all service standards.

The new B&F manager is ready for electronic commerce. He is competent in handling conventional banking as well as remote banking, branchless banking, and home banking. He knows the opportunities in digital banking, cyber-banking (broking and banking on the Internet), cyber-payments using cyber-dollars. The new B&F managers should be familiar with the management of 24-hour electronic banking, including offsite ATM's and free-standing ones located outside malls. With a personal computer and a modem, more and more banks will allow their customers to transfer funds, open LC's, purchase manager's and traveller's checks, and pay electric, telephone, and other utility bills. The new B&F manager should know how to enhance revenues and coverage through satellite communication (VSAT) to transmit/receive voice, data, image, and video information in distant and scattered markets. VSAT-based airborne ATM's in Cathay and Swissair flights will soon be available to provide passengers foreign exchange services and cash withdrawals using debit/credit cards.

The reinvented B&F manager should also appreciate the problems and concerns in managing electronic banking. He is familiar how to protect or "firewall" cyberbanks from scams and hackers, given that the Internet is an anonymous, borderless, and dynamic highway of information. He knows how the e-mail can dramatically enhance employee productivity and speed up internal and external communication. However, the B&F manager should know how to respect employee privacy rights while preventing the disclosure of the bank's confidential information, through proper monitoring of incoming and outgoing e-mail communication. The new B&F manager should know how to create, publish, and manage the bank's Web Page. More and more Asian banks are now maintaining web sites to communicate to the public and their clients. The B&F manager should know how to check the authenticity of the banks or customer accessing the Internet. He should be aware of the scope of central banking regulation of cyber-banking that are outside its jurisdiction.

The new B&F manager is competent in customer "data warehousing" which allows him to study buying patterns and do precise customer profitability analysis. This information enables him to design and deliver specific products and services to target groups in the right time and quantity. Bankers Trust offers its customers "scenario analysis" which provides all market data in real time and the client's risk position up to the last transaction he has done.

The new B&F manager should know how to manage the call centre to enhance customer service and telephone sales. Advanta Corp. has a call centre that automatically discerns a call from profitable customers and prompts a human response in less than a second. The responder also cross-sells to the special customer other products of the bank. Investment in call centres in the U.S. will reach $1billion by year 2000. Soon call centres will be linked to ATMs and branch computers. Some U.S. banks generate more than 70% of new consumer credit accounts by phone. The call centre will be a critical resource and process that the new B&F manager will have to learn how to design and manage effectively.

The B&F manager should also know how to manage his bank's intranets - the internal communication system that links the banks various units, head office, centres, and branches. Using its intranet, Hongkong Bank will distribute database information from central office to branches to improve the latter's decision making process. With intranet, the B&F manager will have the capability of getting real-time virtual financial statements from the system on demand.


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