STRATEGY FOR NATIONAL BANK OF AUTRALIA Essay Example

Strategy for National bank of Australia

Executive summary

The National Bank of Australia carried out the situation analysis of the effectiveness of its ATMs system countrywide. After carrying out a situation analysis, the bank identified the main issue that led to the customer dissatisfaction with the bank’s ATM services. The main issue was divided into three sub-issues: the issue networking which caused most of the ATM services unreliable as they were out of service; the issue of ATM security and fraud at ATM premises; and most of the ATM users were not conversant with the ATM usage which led to the long queues and delay at ATM premises. The next step was to develop the bank’s strategy in terms goals and objectives that conformed to the situation analysis. In the course of developing its strategy, the bank established strategy in the identification of its target public through strategic communication strategy. Furthermore, the bank was delighted to develop message communication strategy that was controllable in nature; through sending of short messages services and emails to reach a specific target public. In the long-run, the bank had to implement its strategy of mitigating or removing the issues surrounding ATM systems. For a bank to know the effectiveness of the strategy, it had to do an evaluation of the implementation strategy through the use of measurable variables obtained through questionnaires from various bank respondents.

Table of Contents

1.10 Situation analysis 4

2.0 Strategy 8

2.1 Goals 8

2.2 Objectives 9

2.3 Target Publics 9

2.4 Messages 9

2.5 Message Strategies 10

2.6 Tactics 10

3.0 Implementation 10

4.0 Budget 11

5.0Timeline 11

5.0 Evaluation 12

5.1 Background information 12

5.2 Method 12

5.3 Limitations 13

5.4 Results and discussions 14

5.41 Table 1.11 ATM attribute rating 15

5.42Table 1.12 showing ranking of attributes 16

5.5 Conclusion 16

1.10 Situation analysis

Situation analysis is a fundamental method of tackling of issues and management crisis because it deals with an analysis of the public needs and image in the target market; so as to find bases of establishing and implementing long-term strategies in coming up with exceptional public image. In relation to the National Bank of Australia, a clear objective is taken in account in figuring out the proper outline of a detailed situation analysis in identifying the main issue facing the National Bank Australia, successful operation of the bank, its enhanced environment in market and outside market, and a cross-examination of the underlying strategic communication. The National Bank of Australia has boosted for many years of providing exceptional banking services to its loyal customers. The bank has extended its pride in satisfying the rapidly changing tastes and preferences through coping up with the advancing technology in the provision of online banking and ATM services countrywide. In delivering its segmentation strategy in the market, the bank has been increasing the number of ATMs even in the marginalized areas so as to reach as many customers as position; in an effort to competing comfortably with other banks in Australia. The National Bank of Australia has more ATM outlets than the number of branches as far as national boundaries is concerned.

The next thing is the identifying the underlying issue that National Bank of Australia is experiencing in the 2014. Due to the use of complicated technological systems of banking, the National Bank of Australia is encountering real challenges as an upshot of pervasive wreckage in its ATM services. The main issue is structured into three distinct parts: network problem, ATM’s complexity and ATM’s frauds.

Firstly, the main part of the problem was that virtually all the ATMS were not working and there were iterative reports on ATM fraud national wide. As part of the main issue, most of the bank users are faced with the problem of using the ATMs as they are not installed with a friendlier user graphical interface with comprehensive menus and switch-action buttons on the ATM’s face. The interfacing bank’s server with ATMs can provide extremely useful and quality services to the bank’s customers, although sometimes they can extremely be frustrating to the customers. The interface enables the effective communication between bank’s customer and the ATM machine. The National Bank of Australia has fallen into this issue where most of the users are unable to use the ATM machines and the resulting outcome is the big queues as experienced in the some streets where users stand for hours waiting for ATM services. It has been common in these ATMs that some users are unable to see the screen properly due to the location of these ATMs in relation to sun rays impact on the content view of the menus. Some new customers end inserting the ATM card in the reverse way as they are not familiar with the ATM usage. Some of the users become frustrated when they withdraw incorrect amount of money as most ATM’s menus is complicated in relation to the instructions that prompt on the screen. Most of the time, the option menus are not synchronous with their matching menu key.

Secondly, the reports on frequent ATM fraud and breakdown were prevalent in social media such as facebook and twitter. Frequent comments were spotted on media such as, ‘someone is withdrawing my money from my NBA account…the manager told me that I made a transaction through the ATM…This is a fraud!’ and others were as, “Every time I go to ATM it says ‘dear customer I am being served thank you’ so between me and ATM who deserve service, NBA seriously?” There are several types of ATM fraud that has been reported throughout the country. They can be categorized into three: currency and ATM card fraud, physical attacks and logical attacks. Currency and fraud card is a direct theft of cash from the ATM machines and also an indirect confiscation of the customer’s Identity and card information using magnetic strip reader and other tricks. Most of these ATM machines do not have camera surveillance the fact that has facilitated ATM fraud.

Thirdly, the source of the problem of ATM’s failure was due to the failure of networking within the National Bank of Australia’s VPN (Virtual Private Network); where the ATMs failed to connect to a remote server. Virtual Private Network is a protocol of communication with high network security and difficult to be hacked. Besides, customers have been crowding in National Bank of Australia branches and often went home without money or deposit. The ATM services provide with customer with means of paying for services such as shopping and transport services as they can access money since ATMs are spread countrywide. Due this widespread of this problems many customers have taken the initiative of reporting the issue of ATM failures and fraud to the branch managers of various branches of the National Bank of Australia; and consequently, reaching the top executives of the National Bank of Australia.

The National Bank of Australia organization chart is complex but is so simple to grasp. At the top of management consist of a board of directors, in which there are Executive directors and the Chief Executive Director is the shareholder member of the bank. In addition, the bank has created a corporate governance skeleton that props the bank’s overall operations, as well as providing a way forward the flow of information and authority. The centralized framework provides with the directions for decision-making processes through risk management; strategic planning; financial management; operational planning and succession planning incorporated in the National Bank of Australia 2014 strategic management. The bank offers its financial services to over 12, 4000,000 customers, and 12,200,000 people use over 10,000 ATM outlets; and the bank has more than 20,000 branches; with more than 1800 stores and service centres national wide.

The ATM problem experienced by the bank led to the disorganization of the bank’s customers in the 2014. The National Bank of Australia has been proud of their exceptional services and yet there was obliged to deal with quality ATM service issues in its endeavours. In order for the bank to contain the problem, it had to effect management change along with outsourcing IT services to deal with the issues related to the security and effective operation of the ATM machines country wide.

It was advisable for the National Bank of Australia to adopt the necessary initiative in rectification of the ATM machine systems. To effect change management the National Bank of Australia appointed a new CEO Cameron Cline. The new CEO has taken the necessary steps in the transformation of the institutions reputation, focus and management of wealth in the Australia. As part of his strategy, the new CEO Cameron instigated on retail banking so as to promote the bank’s declining market share. The strategy was to restore the institution’s reputation through offering of its services using cost reduction and some free service strategies in a bid to attract its customers. However, the strategy has not been triumphant and has contributed to the bank’s division earnings. Furthermore, the strategy has not been satisfactorily in raising the margin and cost to income ratio in spite of convalescing cash earnings, customer satisfaction and market share. Another strategy used by the National Bank of Australia was the effort to espouse the bank’s ATM platform in the advancement of the trading efficiencies. The whole ATM system had to be renovated very fast in order to serve frequent bank’s ATM users who could not access the ATM service throughout the bank’s ATM outlets countrywide.

The National Bank of Austria reacted immediately to the issue, by first making apologies to its loyal customers for the issue. The bank took instantaneous steps in resolving the unsuccessful ATM transactions as a result of the ATM system wreckage. However, the bank encountered a difficult time when resolving the issue of the ATM fraud and promised to refund the amount fraud if the bank is certain beyond any reasonable doubt that the fraud was not as a result of the customer’s negligence. Fortunately, only 10 customers were recompensed with amount that was fraud.

In response to the network failure in the ATM the bank, the bank opted to replace the older 5, 000 ATM machines with recent ones. The bank had to outsource its Information Technology to the Dell where Dell Company was mandated to install and manage information technology infrastructure, ATM infrastructure and printing services. Although this initiative was costly, the management realized that it was good for the bank in the lifelong returns. Additionally, the bank installed 20,000 surveillance cameras fitted with magnetic face recognition technology to monitor and contain the ATM fraud. Moreover, the bank provided its customer with hot phone numbers to be calling any time they become suspicious of the problem in the ATM systems. The main focus of the National Bank of Australia was to maintain the ATM infrastructure safe, uncomplicated and updated. As far as public relation is concerned, the issue could have been properly and effectively communicated to the public through the strategic communication strategy.

2.0 Strategy

2.1 Goals

The goals of the situation analysis were:

  • To improve its public image through provision of quality ATM services.

  • To create a good relationship with its customers through offering satisfactory ATM services.

  • To maximize profit through effective ATM service delivery.

  • To increase its fidelity level to the customer through offering ATM services with a high level of security.

2.2 Objectives

The chief objective of the situation study was to determine customers’ satisfaction with ATM services of the National Bank of Australia. To be specific, the situation analysis was designed to determine the vital measurements of ATM SQ (Service Quality), their performance and assessment of customer’s satisfaction with National Bank of Australia ATM banking system. The analysis objective was to assess consumers’ perceptions on the significance of ATM service qualities, the observed performance of the Bank’s ATMs in each and every Service Quality (SQ) attribute as offered by the National Bank of Australia and eventually respondent’s overall satisfaction with the National Bank of Australia ATM services. The situation analysis is significant to the consumer satisfaction, service quality (SQ) and ATMs.

2.3 Target Publics

The National Bank of Australia targeted the ATM users of its ATM services throughout the Australia so as to determine consumer satisfaction with the bank’s ATM banking services.

2.4 Messages

The issue of the ATM banking system is no longer present as the bank has taken steps in advancing the ATM technology that suit customer’s needs. The National Bank of Australia has ensured safety in all ATMs by installing surveillance cameras with magnetic face recognition technology that allows only Authorized ATM users to transact (Paul 2011).

2.5 Message Strategies

The National Bank of Australia intends to use controlled media as a communication strategy. This strategy is important as the bank communicates to the target public (National Bank of Australia’s ATM subscribers) using short messages and emails into their mobile phone device. Although the mode of communication is one-way, the bank is able to communicate only with the targeted National Bank of Australia ATM’s subscribers (Paul 2011).

2.6 Tactics

The National Bank of Australia intends to implement its controlled communication strategy through the use of short messages services and emails to their ATM’s subscribers. The tools are important controlling the length and size of communication as this one-way communication. These tools are faster and cost-effective to implement the grand strategy of communication adopted by the National Bank of Australia.

3.0 Implementation

The National Bank of Australia adopted implementation of its strategies through improvement of ATM banking services to satisfy customer’s need. In the implementation, the bank replaced all the older 5000 ATMs (Costing @ $ 15,000) with recent ATMs that could maintain network throughout without even a slight evidence of a breakdown. In addition, the bank had to install 20000 surveillance cameras (costing @ $ 200) to control the rate of the fraud in most of the bank’s ATMs. Furthermore, 10 customers were recompensed with a total amount of $ 50,000 due to the ATM fraud. This action of recompensing was designed to increase bank’s credibility in response to any possible occurrence of ATM banking system of the bank. The implementation was done in order to improve customer’s satisfaction through provision of ATM Quality Services (QS) (Huber & SpringerLink 2011).

4.0 Budget

The budget of the implementation can be summarized in the table 1.10 as follows:

THE NATIONAL BANK OF AUSTRALIA IMPLEMENTATION COST BUDGET

THE NATIONAL BANK OF AUSTRALIA IMPLEMENTATION COST BUDGET

Particulars

price for each in $

total in $

ATM system

125000000

installation cost

transport

Recompensing

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$131071500

5.0Timeline

The timeline of the implementation was to be completed in one year period. The reason for that long time frame can be expressed in terms of the timeframe adopted by the bank to effect procurement process of these installations as they need relatively longer time to obtain consultation services, procurement bureaucracies and delivery from the suppliers to the correct destination, as well as time for testing their authenticity and workability before they are completely installed in respective places.

5.0 Evaluation

5.1 Background information

An evaluation of the implementation was done looking at important variables such as customer’s satisfaction and (SQ) Service Quality. The service quality is a vital construct of the satisfaction of the customers. The service quality (SQ) is the best described by the service consumers. There are many approaches of measuring the satisfaction of the consumers. Firstly, one of such approaches is the Importance-Performance Model which has two elements: the perceived service performance attributes and the extent to which belief exert to each attribute (Kounev, Gorton & Sachs 2008). Secondly, the Expectation- performance such as SERVQUAL (Service Quality) is used also to measure the satisfaction of the customer. Thirdly, the performance only (as known as SERVPERF Model) can be used to measure the customer satisfaction (Kounev, Gorton & Sachs 2008).

The other aspect is the measurement of the service quality (also known as SERVQUAL model) which is the antecedent of the satisfaction of the customers. In this model, customers are required to rate the ATM services as presented in the Likert Type scale (Tullis & Albert 2013). In applying the Service Quality (SQ) dimensions in the ATM situation, the tangible component would be physical equipment, how it appears, and support services.

5.2 Method

In order to establish the measurement magnitudes, the situation analysis involved the study on 25 National Bank of Australia’s fully validated ATM Service Quality (SQ) attributes. The particulars involved (6 particulars) tangibles, (6 particulars) reliability, (6 particulars) responsiveness, (3 particulars) assurance, and (4 particulars) empathy. The participants were requested to rate or appraise the ATM Service Quality Attributes on the scales (specifically Likert Scale) 1 to 5 where the likert scale (Tullis & Albert 2013) looked like this:

1 extremely poor /extremely unimportant

2 poor/unimportant

3 neutral

4 good/important

5 extremely good /extremely important

The questionnaires were designed on 30 ATM National Bank of Australia card holders to access it authenticity and structure before they were disseminated to a 200 customers who held and frequently or at least used ATM cards of the National Bank of Australia.

The Cronbach’s alpha that demonstrates the scale’s ability to give a reliable measure was found to 0.853 and 0.776 for the performance and importance measurement (SAS Institute 2012). The questionnaires were delivered through emails with a weekly reminder so as to improve respondent’s response rate.

5.3 Limitations

The situation study was carried out in the Urban ATM users of the National Bank of Australia. The team encountered the limiting factors such as experience, culture, exposure, education and tolerance levels of the Service Quality that affected the scope of the situation analysis.

5.4 Results and discussions

From the study, 95.6% of the participants had been with the bank for at least two years. It was also found that 88% of the participants use ATM for more than once per week. Out of 200 respondents, only 143 responses were received by the team, and which represented 71.2% response rate, out of which 65.0% of the participants were male and 35.0% were female.28.8% of the participants were undergraduates, out of which 51.0% were graduates and 20.2% were post-graduates. In respect to these demographics, the analysis perceived that the participants had knowledge and capability of rating the bank’s ATM services and provides opinions on the perceived level of performance and importance of each ATM. The SQ attribute provided the general customer satisfaction of the ATM services.

The outcomes in Table 1.11 portray the total respondent percentage rate of each ATM Service Quality attribute that represented Importance or extremely importance of the Likert Scales of 4 to 5. Additionally, the table 1.10 displays the correlation between customer’s satisfaction and performance of each attribute of ATM Service Quality using Pearson’s method and 2-tailed student test for determining the statistical significance difference of the said association (SAS Institute 2012).

5.41 Table 1.11 ATM attribute rating

Particular performance importance ATM Service Quality (SQ) performance in correlation to satisfaction of customers with ATM services

Table 1.11 ATM attribute rating

Particular

performance

importance

ATM Service Quality(SQ) performance in correlation to satisfaction of customers with ATM services

Pearson correlation

2-tailed test(Sig.)

ATMs’ premise cleanliness

ATM appearance

Clean notes Issue

widespread of services

ATM speed

ATM out of order

Delay at ATMs

Security

Easy Accessibility

**notes**

The Pearson’s correlation was relevant at the 0.01 level of 2-tailed test on importance measurement and 0.05 confidence level of the 2-tailed test on performance measurement.

The Service Quality (SQ) dimensions were ranked on the basis of average ratings of the importance of the attributes in each category of dimension. The ranking of the attributes form the first to the last as shown in the table 1.12 below:

5.42Table 1.12 showing ranking of attributes

ATTRIBUBES

PERCENTAGE %

Reliability

Responsiveness

Assurance

Tangibles

Reliability is was used to refer to the extent to which ATMs offer timely, dependable and accurate services; responsiveness refers to the willingness of the service providers to assist its customers; Empathy is the care and attention of the service providers towards its consumers; assurance is the trust and attention towards ATM services, and tangible refers to the ATM physical equipment and appearance.

The ATM users would like to obtain a reliable ATM usage, the response attribute that was ranked highest. On top of that, the customers would like ATMs that are user friendly, fast, those that do not run short of cash and those that make accurate transactions, as well as ATMs that do not run out of service.

5.5 Conclusion

The study shows that, after implementation of the strategy, the ATM reliability increased considerably, as well as security at ATMs that led to increased customer satisfaction of the ATM services belonging to the National Bank of Australia.

References

Huber, A. J., & SpringerLink. (2011). Effective strategy implementation: Conceptualizing firms’ strategy implementation capabilities and assessing their impact on firm performance. Wiesbaden: Gabler.

Kounev, S., Gorton, I., & Sachs, K. (2008). Performance evaluation: Metrics, models and benchmarks : SPEC International Performance Evaluation Workshop, SIPEW 2008, Darmstadt, Germany, June 27-28, 2008 : proceedings. Berlin: Springer.

Paul, C. (2011). Strategic communication: Origins, concepts, and current debates. Santa Barbara, CA: Praeger.

SAS Institute. (2012). Base SAS 9.3 procedures guide: Statistical procedures. Cary, N.C: SAS Institute.

Tullis, T., & Albert, B. (2013). Measuring the user experience: Collecting, analyzing, and presenting usability metrics. Amsterdam: Elsevier.