Need PPT

Problem, research and resolutions

The banking industry has over time experienced an increased number of players who have worked to intensify competition. One major crucial way of how one can ensure a competitive advantage is by keeping costs as low as possible. Agency costs are one area where most banks are struggling to cope. Banks that have agencies in different geographical areas incur huge agency costs. In addition is the huge amount of money most banks have to pay for the different premises their branches occupy. These work to significantly cut into the profits of the banks and deny them chance to offer better prices and generally convenient products for their customers. The other problem in the banking sector is the long period of time one has to wait for a small amount loan to be approved. In most banks, one would have to queue and even come on a different date to receive their loan. This is despite the fact that the loan may only be of a small amount.

There are a number of business and technological drivers that have resulted to the above problems. First, the huge number of participants in the banking sector has given customers different choices and one can easily switch from one bank to another. Customers have grown highly sensitive about the prices being offered and they would in most cases go for the cheapest option. Banks therefore have to ensure that they keep their rates as friendly to the customer as possible. Globalization has intensified competition and forced companies to venture into distant locations. This is what has seen most banks incur huge agency costs and other spend substantial amounts of money renting premises in other areas. Different banks have products that are almost similar and about the same prices. In this case, the distinguishing factor remains the convenience of the service; for example the time one would take to acquire a loan and whether it would require any kind of travel. The number of mobile phone users is experiencing tremendous growth and most people are relying on their mobile phones to perform different functions. Banks have had to follow suit by moving away from the traditional queuing before one can access a soft loan.

Resolutions

Mobile banking is a major solution to the above problems as it ensures low costs and convenience for the customers. The customer is only required to download the mobile banking application of their respective bank and thereon they can make loan requests. Whichever place they are, customers can conduct transactions with the bank and they would not have to waste time lining up to get a loan. There is no paper work involved and the banks would require a smaller number of personnel (European committee for banking standards, 2003).

The second solution would be the use of online portals. The online portals allow the members of the bank to manage their accounts from whichever place they are at any time. The customers would not have to travel to the bank or its branches to have certain services as they could do it on their own.

The third option to partner with communication companies to offer banking services to the customers. The communication companies in this case would agree to offer banking services for the bank through their lines.