Spatial tracking systems that make banks' floor plans and product positioning more effective;
5. Intelligent interactive displays that reflect the interests of the watcher;
6. Use of wireless tablet personal computers (PCs) for client interviewing; and,
7. Videoconference virtual experts for collaborative selling (56).
The same features that characterize high performance banks in their brick-and-mortar operations appear to relate to the use of technology as well, with the best performing banks having identified the optimum mix of services for the markets they serve. For instance, Grasing reports that, "Banks are taking a variety of approaches in implementing technology to make improvements in retail delivery. The methods differ, depending on the bank management's mindset toward the purpose of the software and its valued place in the new business or service delivery processes" (3). The main point in this area is that high performance banks apply technology in ways that help minimize errors as well as the cost and time required for individual transactions as well, making banking operations more efficient and allowing more time for new revenue generation (Grasing 4).
Based on the results of a recent independent survey conducted by the Robert E. Nolan Company, Grasing reports that the Nolan Efficiency Ratio Benchmarking Study found no relationship between a given software system and higher performance. These findings suggest that higher performance is related to how well the applications have been integrated into banks' operations rather than the specific software application that is in place (Grasing 4). The findings that emerged from the Nolan Efficiency Ratio Benchmarking Study also indicate that teller efficiency is significantly higher in top-performing banks compared to the banking industry averages: "The data demonstrates that high-performing banks handle 13% more transactions per month than average banks. The relative cost per transaction is 35% higher in the average banks than the high-performing banks" (Grasing 5). Moreover, the results of the Nolan Efficiency Ratio Benchmarking Study also found that high-performance banks have:
1. A work distribution of 55% on sales and account opening;
2. An 18% distribution on fee and non-fee services;
3. An 8% distribution on customer problem resolution; and,
4. A 19% distribution on administration and other services.
By sharp contrast, personnel in lower performing banks spend an inordinate amount of time involved with problem resolution, thereby allowing less time to be devoted to sales and opening new accounts (Grasing 5). For instance, high performance banks enjoyed a rate of 152 new accounts per employee compared to the average bank's 139 new accounts, representing a significant 9.35% difference (Grasing 5).
Likewise, another indication that high performance banks use their time and resources more effectively than the banking industry average is reflected in the fact that top-performing banks open just 25% of new deposits to the total deposit account balances compared to 32% for average performing banks. These percentages indicates the new non-time deposit account balances as a percentage of total non-time deposit balances was 14% in high performance banks compared to 20% in average performing banks, suggesting that high performance banks are not required to develop as many new deposit balances because they are realizing higher returns on their existing deposits compared to average performing banks (Grasing 5).
Other salient findings that emerged from the Nolan Efficiency Ratio Benchmarking Study included the importance of having an organizational culture in place that encouraged efficiency, the elimination of waste and value added activities at every opportunity by...
According to Grasing, "Deployment is as much a part of the success of the tools as it is with any technology. . . . Applying science and analytics to the data suggests that the most pertinent information will lead to selling new products to existing customers. This analysis also applies to the possible loss of customers. In this way, banks may prevent the attrition of their customer base" (5).
The main themes that emerged from the Nolan Efficiency Ratio Benchmarking Study were not earth-shattering by any means, and Grasing suggests that the majority of banks understand that these metrics have basically reflected the same features that have characterized high performance banks for the past several decades. However, Grasing also emphasizes that, "What makes the difference between the top-performing retail banks and the average performers is the way they design and deploy their resources to achieve sales and service goals for their customers. The numbers tell a story over time. The comparative gap in efficiency ratio between the top performers, 27.1%, and the average bank, 47.5%, is significant at 20.4%. Interestingly, of the 20.4% gap, the personnel cost gap is 10% and the other operating expenses is 10.4%" (6).
The research showed that the environment in which banks compete today has changed in significant ways in recent years, with consolidation and deregulation introducing a number of challenges for banks of all sizes and types to remain competitive. The research also showed that the high performance banks were generally characterized by higher returns on assets compared to the banking industry average, but there were a number of other features that set them apart from lower performing banks as well. These features included more efficient use of time and resources to generate revenues, higher levels of banking personnel performance in the conduct of their duties, the integration of technology where it have the most significant effect on efficiency of operations and an organizational culture that emphasized the need for profitability and top-level performance. Finally, a consistent feature that characterized high performance banks compared to their lower performing counterparts in the banking industry was a solid financial structure combined with good strategies that took into account the unique market in which they competed and these attributes were shown to contribute to higher performance irrespective of the prevailing economic climate. Taken together, high performance banks were shown to have identified the optimal mix of products and services combined with more efficient operations compared to their banking industry counterparts, features that are characteristic of virtually all types of companies regardless of the industry in which they compete.
Bielski, Lauren. (2007). "Today's Elements Tomorrow's Branch: The Branch Was Supposed to Phase out. It Hasn't and May Never. What Will the Branch of the Future Feature? Self
Service and Collaboration." ABA Banking Journal 99(6): 55-57.
DePrince, Albert E., William F. Ford and Thomas H. Strickland. (1999). "The New High
Performers Stretch Their Lead." ABA Banking Journal 91(11): 36.
Donner, Suzanne and Cathy Dudley. (1999). "Balancing Customer Contact and High-Tech
Delivery." ABA Banking Journal 89(1): 18-20.
Grasing, Robert. (2003). "Branch Performance by the New Numbers." The Journal of Bank Cost & Management Accounting 16(3): 3-5.
Hanley, Claude a., Mark P.…
structure' theories by making use of a new method. To achieve this, the case study shapes strategies of bond investment centered on diverse term-structure models to decide the best performing strategy. When making use of a "Manipulation-Proof Performance Measure," the case study attains the finding that in agreement with preceding literature, a pro-active method that is grounded on time-changing term premiums may create the foundation of an effective bond
Banking Sample The banking industry, over the last decade has undergone significant change. Industry regulation such as Dodd-Frank, Basel 3, and international capital requirements have now made the industry safer and more transparent. However, due primarily to the crisis of 2008, some banks are more stable than others. In many instance, due to unethical practices of the past, many banks are now suffering as they struggle to attract market share and
Bank America Case Study From Goldsmith & Carter textbook, select Bank America (Chapter 2) case study assignment - uploaded Write a (5-7) page paper: 1.Outline talent management program led success company. Bank of America case study The modern day working environment is a highly complex and intricate field, in which employees and employers have to continually meet new demands, standards and challenges. Employees, for instance, have to perform new tasks at superior
Key findings from the analysis are provided here: Income Statement Variance Analysis Bank of America achieved a 37.4% increase in revenue between 12/31/05 and 12/31/06, driven by acquisitions and organic growth in Retail Banking and Card Services. Cost of Revenue increased 53% in the same fiscal period. Net Income increased 28% from $16.4B to $21.2B also driven by the acquisitions completed during the period. As a result Earnings per Share on a
Credit Risk Management Banks are an important part of the economy of any nation. Traditionally, the banks operate as financial intermediaries serving to satisfy the demand of people in need of various forms of financing. Through this, banks enable people to purchase home and businesses to expand. These financial institutions therefore facilitate investment and spending that are responsible for fueling the growth of the economy. In spite of their vital role
Regulation of Banks Banks are an important aspect of any modern economy. They provide financing for commercial businesses, access to payment systems and a variety of financial services for the economy as a whole. The integral role that banks play in the national economy is demonstrated by the need for and practice of banking regulation and as part of the lessons learnt from the recent global financial crisis, provides a government