How Banks and Financial Institutions Are Playing a Key Role towards Globalisation of Economies - Essay Example

1. I have selected a topic ‘Financial Services’ Title: Financial Services 2. Question How Banks and Financial institutions are playing a key role towards globalisation of economies? 3. Articles Referenced 1) Salzar, M. T. (2007). ‘An approach for the identification of cross-sell and up-sell opportunities using a financial services customer database’. Journal of Financial Services Marketing; Nov2007, Vol. 12 Issue 2, p115-131, 17 2) Taylor, M. (2007). ‘Customers make banks pay for bad service’. Money Management; 9/6/2007, Vol. 21 Issue 33, p11-11, 1/6p 3) Wade W. (2007). ‘Open Solutions Deal For Vendor Closes’. American Banker; 5/11/2007, Vol. 172 Issue 91, p17-17, 1/9p 4) Knights M. (2007). ‘Integration aids fight against fraud’. Computer Weekly, 12/12/2006, p10-10, 1/4p 5) Peppers D. and Rogers M. (2006). ‘Customer Loyalty: A Matter of Trust’. Sales & Marketing Management; Jun2006, Vol. 158 Issue 5, p22-22, 1p, 2c 6) Haley, G. (Mar. 5, 2003). “An introduction to using data at DPLS.” Data and Program Library Service. Available online at http://dpls.dacc.wisc.edu/types/secondary.htm (Feb 1, 2008) 7) Marketing Basics. Available online at http://www.businesstown.com/marketing/customer.asp (Feb 1, 2008) 8) Alliance Leicester - a real plus. Available online at http://www.alliance-leicester.co.uk/home/index.asp (Feb 28, 2008) 4. Rationale for the Study: Economic activities, financial services, and banking have experienced quite a few changes in the last couple of decades. As the industrial activities see an upsurge on global scale, it requires more funds to sustain the upsurge together with enough money with the consumer, for being able to use those products and services from the industry. The institutions in turn are supposed to make their operations and services attractive enough for the industry and the customer. The value that is addition done by both operations management and operations strategy happens to be fundamental to any organization. The above mentioned articles have one thing in common; they underline the need for effective management of financial aspects of a business. Providing services or goods are the basic forms of operational activities. All organizations try to provide a combination of products and services, using available sources with them. Opening a bank account, taking a meal in a restaurant, visiting a hospital, buying a pair shoes, insuring a vehicle, a hotel stay etc. are all operations activities and their management is central to the successful provisioning of goods and services. Such value addition helps the banks and financial institutions help in making them friendly institutions to the customer base at large. Marketing consists of the strategies and tactics used to identify, create, and maintain satisfying relationships with customers that result in value for both the customer and the marketer. Relationship management, the very basis of running financial services, asks for earning the loyalty of customer. This in turn calls for keeping the workforce motivated enough, while extending valuable services to the customers. The global economy has made it almost mandatory for retail stores, banks, financial institutions etc. that an effective strategy is adopted for managing the workforce and the diversity at the organisation so that everybody is able to enjoy a better working environment and the customer too feels valued. This helps the company in taking on the competitors with fullest potential. The bank (or any company for that matter) can acquire competitive advantage on its rivals on account of marketing efforts, brand building, value creation, innovation, supply chain management, operational efficiencies etc. But more important is to sustain the advantage. The value configuration helps in sustaining the advantage. It describes how value is created in a company for its customers, how the most important business processes function to create value for customers and the way a particular company/ organization conducts its business. In this study I’ll study the nuances of banking and finance through some of the shortlisted banking and financial institutions like HSBC, Alliance Leicester etc. which I can approach through the nearby branch or through internet. It will be worthwhile to undertake such studies with banks having branches in many other cities and countries and offering range of services like savings account, current account, personal loans, mortgage services, investment services, credit cards, insurance services, many other types of secured loans etc. Many such banking institutions come out with their marketing communication campaigns enlisting their strong points and how they take pride in customer assistance, and a range of extra services and facilities. 5. Aim: To study the functioning of financial institutions and how banks and financial institutions help in providing assistance to industries as well as the consumers in addition to retaining their customer base and adding new customers to their fold. 6. Objectives The main intention of the study is to develop an understanding of the concepts of management in the banking and finance industry in general and how the established theories and principles are applied to the industry and some of the organizations. During the study an effort will be made to observe the general working at some banks and financial institutions to seek answers to the following key objectives. To analyze the levels of competition and HR scenario in the finance industry in general. To analyze the financial performances of some of the financial institutions around us and how the profitability aspect has undergone a change over the years. Prerequisite to a decent work culture is about respecting individuals and treating everyone, customers and colleagues, with dignity. What efforts the institutions are making to adopt a balancing approach towards motivating the workforce. To identify behavioural patterns of some of the customers on their relationships with the banks and reason for their being with the store. How an emphasis is now being laid on quality and what are the steps being taken by the financial institutions to adopt standards of quality. 7. Methodology As with any research project, determining the best methodology to gather data when conducting research is of paramount importance. Inevitably, any discussion of methodology involves a debate over the pros and cons of quantitative analysis versus qualitative analysis. Both types of analysis require data and facts and figures, which can be gathered either through primary sources or secondary sources. Since the nature of this study involves a broader analysis of the existing scenario, therefore we’ll have to take the help of primary sources in good measure, for gathering most of the information. Some of the primary sources will be the interviews and opinions that we seek to solicit from the customers and the working people within the superstores. Aim of this project is to research and assess the impact of a transition towards a global economy and how the finance business has been affected by this transition. Of late, there’s an increasing emphasis on e-commerce, which entails presence on the internet, online transactions etc. and some of the banks and financial institutions have also started consolidating their presence on the e-commerce horizon as well. Increasing use of net-banking and e-business opportunities provides an indication towards such a trend. During the study an effort would also be made to analyse how some of the financial institutions have firmed up their online presence and what type of benefits are being enjoyed by different segments of the customers and the company. While analysing the evolutionary process in the banking industry, an effort will be made to study the path taken by the industry to arrive at this position and how it has impacted the effectiveness of providing financial service to the consumer. Using reliable secondary sources of data would yield the required information to make the comparisons and further investigate the trend. Moreover, use of secondary research allows for the analysis of a broad range of topics that can be thoroughly investigated and has proven to be credible. According to Haley (2003) many researchers have opted to conduct secondary research as opposed to primary research, because of limited opportunities for conducting primary research and the costs of qualitative work that goes into conducting such a research. Therefore, in order to maximize the use of available data, we’ll critically analyse the secondary data. The advent of software’s to aid the coding, retrieval and analysis of qualitative data is another development which greatly influences the decision in favour of such data. The research used in this discussion comes from several sources including books, corporate/ government documents, reputed websites and scholarly journals. The research also relies upon documentary evidences. This type of research involves “systematic and objective location, evaluation, and synthesis of the evidence in order to establish facts and draw conclusions concerning different sets of events. This study is more of a qualitative case study which focuses on an analysis of the retailing environment, increasing levels of competition and emerging trends towards quality consciousness. The focus will be more towards the analysis of some chosen financial institutions. In order to arrive at the conclusion we need to analyse the available facts, data, viewpoints, existing studies etc. which we can do by way of; Deductive reasoning, which works from the more general to the more specific subjects. Sometimes this is informally called a "top-down" approach. In such approach we take up the ‘theory’ and then try to apply it to the hypotheses that we intend to test. Gradually we narrow down to the testing of data and observations for their applicability to the theory/ theories to arrive at a confirmation of its applicability or not. The Inductive approach on the other hand begins with collecting data, specific observations, which then lead to broader generalization and theories. Such an approach in called as “bottom up” approach. The patterns thus detected are formulated into tentative hypotheses and we can therefore arrive at some general conclusion about our subject. During this study, we’ll be making use of a balanced combination from both the approaches, to arrive at the most realistic outcome. Secondary data, available in the public domain provides us with the historical developments, comparisons, research findings etc. while primary data provides a glimpse of the prevailing circumstances within the industry and the company. To collect the primary data; Questionnaires will be distributed to a sample size of 200 persons. The sample population will be approached through email Some respondents will also be approached through direct interaction in a bank branch with some bank executives and customers. Interview with some bank senior officials Subsequently, the data will be analysed using MS office tools like MS-Excel by drawing bar charts, pie charts etc. 8. Plan of Action Time scaling helps in gauging the progress that has been made towards the completion of the project. Milestones on the way help in providing and judging the shortcomings in implementing the project. Subsequently a corrective step can be taken to bring back the project plan towards original schedule or requisite adjustments can be made in the schedule. Such an adjustment also helps in sincerely conveying to the tutor/s that we’re indeed on the job and all their efforts are not going down the drain. For carrying out this study I’ve made the following time schedule; Submission of Proposal: March 10, 2008 Interaction with the Tutor: March 20, 2008 Inclusion of suggestions by the tutor: March 30, 2008 Preparation of questionnaire: April 15, 2008 Data gathering, Lit Review etc May 30, 2008 Compiling the Modules June 20, 2008 Review of all details and requirements July 15, 2008 Submission of the Project August 10, 2008 9. Resources Requirement Primary sources: These sources will be used mainly to gain an insight into the prevailing attitude and perception towards providing better services to the customer, motivating the workforce, preserving the environment etc. Questionnaire and interview are the two important tools for collecting information from Primary sources. Towards this end; An effort would be made to interact with some of the customers of banks and other financial institutions Information would be gathered about the latest initiatives of the companies to beat the heat of competition and to provide better bargains to the customer. An effort will also be made to know about the awareness level of the companies and their workforce in general about the environmental issues and the concept of green business. Secondary Sources: These sources will be obtained mainly by carrying out an academic research. Secondary sources will help in; Studying some of the demonstrative measures used by some well known companies in enriching the financial services sector. Studying different theories of environment and how employees in a company or organisation are motivated to maintain quality standards in such a manner that it helps the company as well as the society. Online libraries prove to be of great help in gathering information about the latest technology and management techniques being implemented the world over. 10. Ethical Considerations Whilst this study required participation of human subjects, consent and confidentiality is a significant issue; this study would communicate its aim and purpose to the participants through a covering letter accompanying the questionnaires. The covering letter will also list out the contact information of the researchers and other details. By providing this relevant information, the research participants would be made aware about the study prior to completing or sharing any information. Acquiring informed consent is vital to a researcher. Such a consent document serves as a protection both for participants and for the researchers involved. Besides detailing the needs and purposes of this study and the involvement of the researchers, this document protects researchers from false accusations by ensuring that researchers know the respondents and fully understand the purposes of the research. In addition, this informed consent discloses a promise of confidentiality and protects participants from potentially harmful consequences; this consent form also ensures that the information gathered from each respondent will be used only for the purposes of this study and will not be distributed or sold to any other parties. References: 1. Haley, G. (Mar. 5, 2003). “An introduction to using data at DPLS.” Data and Program Library Service. Available online at http://dpls.dacc.wisc.edu/types/secondary.htm (Feb 1, 2008) 2. Marketing Basics. Available online at http://www.businesstown.com/marketing/customer.asp (Feb 1, 2008) 3. Alliance Leicester - a real plus. http://www.alliance-leicester.co.uk/home/index.asp Read More