The Main Influences that Barclay Play in Online Banking - Case Study Example

THE MAIN INFLUENCES THAT BARCLAY PLAY IN ONLINE BANKING BETWEEN BUSINESS-2-BUSINESS S IN THE UNITED KINGDOM Submission Date Introduction The modern business environment has been changing drastically especially with the advancement of information and technology. Many businesses have been moving fast in order exploit the opportunities that exist with these developments. The internet has influenced many business practices, especially when it comes to designing marketing models and other cases of information management. Some of the industries like banking have been making sure that they develop strategies and approaches that enable their members to enjoy effective banking experiences without necessarily having to the bank physically (Sekhon, Yap, Wong & Bak 2010, 31). This has seen the emergence of many online banks, with the already existing banks like Barclays modifying their strategies in order to establish online system through which their customers can enjoy their banking experiences. One of the reasons why many customers prefer online banking is the fact that it enables them access banking services with much ease, thus reducing the transportation costs they would have incurred if they travelled to the banks physically (Sarel & Marmorstein 2004, 238). Additionally, internet banking is very fast, customers do not have to make long queues and engage customer care representatives in order to be told of their problems and challenges. For this reason, online banking is becoming the safest and fastest way by which banks are engaging their customers. With the concept of globalisation, information and technology has become an integral part of business activities (Ahangar 2011, 427). Many industries are using this approach in order to modify their approaches so that they can reach many customers across the world by increasing their market share. This paper examines the influence that Barclays bank plays in the banking industry in the United Kingdom as well as others parts of the world. Company Background – Barclays Bank Currently, the banking industry has evolved greatly, with many banks being created in order to benefit from the financial industry. Some of the banks that have remained effective and successful since inception have often relied on various strategies that seem to be in tandem with the changing market trends. Barclays is one of those banks that have been successful for a long time since its development. Barclays is actually a British multinational company in the banking industry, offering various kinds of financial services (Lodge & Williams 2002, 98; Ackrill & Hannah 2001, 19). The bank is headquartered in Britain, in the capital London. Barclays deals in various retail and wholesale operations as well as has massive investments in the banking sector. Other areas of its full time activities include creation and sale of credit cards, mortgage lending as well as wealth management. Due to its proper and effective management, the bank has managed to create more than one hundred branches, reaching more than 50 countries across the globe. It is estimated that the number of customers that the bank enjoys exceed 48 million. At the end of December 2011, the bank was estimated to have approximately $ 2.42 trillion in assets, making it the seventh in terms of the largest banks across the world. In its operations, Barclays is run on three main business clusters; first is retain and business banking, which deals with small and medium enterprises as well as individual’s financial issues. Second is wealth and investment banking, which offers investment advice in capital and financial markets. The last cluster is that which deals with corporate and investment banking, which deals with corporate entities. Barclays has such a long history, tracing its origin from the times of goldsmith banking businesses that were established in London in the 1690s. After its development, James Barclay got interested in the business, becoming an active partner in 1736. The years that followed saw the banking industry become famous, with many people preferring to keep their money in these banks managing their investments effectively in the banking systems. This saw several banks that had been established in London including Gurney’s Bank and backhouse’s bank uniting to trade under the brand Barclays and Co. Barclays later became a strong institution, managing to establish several branches across the UK, something that made it become the national bank, being preferred by many people. it is actually Barclays that became the first bank in the world to deploy the first cash dispenser, something that was a new technology in the banking industry. 1918 saw the bank spread its arms further, making various corporate acquisitions that included South Western bank and Provincial in London, the British Linen Bank, which was later acquired in 1919, Woolwich and the Lehman brothers in 2000 and 2008 respectively among many others. It is important to note that excellent management and good market opportunity identification have been the pillars behind the success that Barclays enjoys currently. However, the concepts of globalisation in the 1990s meant that the company adopts new ways of managing its banking services in order to appeal to the many clients in the wake of its massive expansion across many countries around the world. Online banking Online baking refers to the electronic managed payment systems run by banks and other financial systems in order to enable their customers to manage their financial transactions in websites and other online platform that are created and run by the particular institutions (Hitchcock & Page 2002, 56; Klein 2005, 76). Examples of these institutions include retail banks, virtual banks, credit unions as well as building societies. In various instances, online banking is often called internet or e-banking as well as virtual banking among other related terminologies. In order to access and enjoy internet banking, a customer of the particular bank or financial institution is expected to register with the institution in order to access the service on any device that can access the internet like a phone, computer or personal digital assistant (Lonsdale 2005, 43). The registration process allows the customer to set a password, which he often uses in the process of accessing his/her online account. In most cases, the password that the customers uses in accessing his/her online banking account is very different from that used on the phone on the particular device being used in accessing these services (Gola & Roselli 2009, 36; Akinyele & Olorunleke 2010, 211). Most financial institutions often allocate their customers with certain numbers they can use in accessing their online accounts routinely in order to ensure that their accounts are very secure. The emergence of online banking has been effective in influencing the modern banking industry, with many customers signing up for these services. By registering with their financial service providers, customers can enjoy banking services from their convenience (Doraiswamy 2009, 92). These online systems enable customers to make deposits in their banks, withdraw money and make online purchase from any place on the globe using the various payment methods that have been established. Online banking offers a fast and effective way by which customers can access their banks and manage their transactions. With the drastic expansions in business activities especially in the banking industry, banks are finding easier to create and manage online transactions for their clients distributed across the world compared to creating physical facilities (Clement & Bakar 2011, 509). Online banking is not affected by geographical factors among other factors in the external business environment, which affects businesses in their growth and development. The history of online banking To many people, it may be a surprise learning that online banking has been in existence all the way from the early 1980s. However, it is important to realize that at the time the term “online banking” was beginning to gain popularity in the early 80s, it only referred to the skill of using the terminal, television and the keyboard in order to access an individual’s bank account by calling the bank on landline telephone (Shah & Clarke 2009, 43). Later, in 1991, New York City made the first move to fully exploit this innovation. In this new move, the innovation was first used in four banks, which are Chase Manhattan, Citibank, Manufacturers Hanover and Chemical (Morris 2008, 54). These banks tried the process of bringing the banking services to their customers at the convenience of their homes and wherever they were. At this time, many customers did not effectively comprehend how to use this technology, leading to its imminent failure until mid 90s when the new wave of internet started gaining momentum, with many banks showing interest in the innovation (Shah & Clarke 2009, 47). With the growth of the banking sector, many of the emerging companies wanted to create and increase their market share by tapping and reaching those clients that worked in places not reached by banks. This meant that banks were looking for an innovation that would enable them enhance the banking experience for their clients, enabling them to effectively make their banking conveniently. Additionally, the start of the 1990s saw rapid developments in information and technology, with more corporate institutions and business using these technologies to create various kinds of innovations that would give them a cutting edge over their competitors. In the United States, the Stanford Federal Credit was the first to comprehensive use internet banking. In fact, by incorporating online baking in 1994, it became the first banking institution to offer this service to all its clients across the United States (Morris 2008, 65). One year later, Presidential Bank became crated and incorporated online banking in 1995, becoming the first to give its clients ability to access and manage their financial accounts through the internet (Morris 2008, 67). Soon, the success of this innovation in these banks was adopted by other institutions, which moved fast to exploit this growing trend. At the time of its launch, many customers did not effectively comprehend the functioning of the technology; for this reason, many of them became hesitant in engaging the innovation. One of the reasons, they gave for this was that the innovation did not have enough security features to assure them safety for their money. Additionally, many customers did not understand how to use the innovation, making them reluctant to invest their time into its use. By 2000, the number of people that had subscribed to using this technology in the United States was about 80 percent (Bauen 2013, 67). Many of the banks started educating their customers on the advantages of this innovation, knowing that after these customers embraced it, it would reduce their overhead costs by great margins. Later, the Bank of America, made strides in this initiative, by becoming the first bank to register more than three million customers in the online banking technology by the year 2001, this number comprised of about 20 percent of all its clients in the country (Shah & Clarke 2009, 52). Online banking innovations at Barclays Barclays has been actively involved in influencing the banking experience for its clients not only in the United Kingdom, but also in the many places that the bank has established. The banks has managed to advance its plans and strategies in order to rank among the top five banks with a strategic refresh to its respective internet banking. This way, the bank has managed to emerge the best when it comes to creating technologies that enhance cross-channel collaborations, sales volume as well as customer satisfaction. Currently, Barclays has effectively optimized its decision making and mitigated the risks for IT investments, having a new and comprehensive model for ROI as well as a highly informed and commercial sight for its market (Shah & Clarke 2009, 75). From its 2,100 branches across the United Kingdom, the company is currently establishing a successful global brand by creating several investments arm, the Barclay capital. The arm has been known for its efforts in creating various innovative services to the market. From the banks history, Barclays was the first in Europe to create and use the ATM technology in its branches, pioneering the use of credit cards using its brand, the Barclaycard (Gola & Roselli 2009, 75). The use of internet banking at Barclays according to its history began in the 90s, this was thought to be the most effective and convenient way by which its clients would enjoy the banking experience (Bauen 2013, 42). In order to have a continued leadership when it comes to e-banking as well as improvement of its respective competitive position, the bank has had to invest in systems that can help it build opportunities emanating from the next-generation web technologies into emerging channel strategies. This includes incorporating the local branches, online banking services as call centres, which are located all across the United Kingdom as well as in other countries that the bank has established its presence. The use of Next-generation innovations and web technologies at Barclays in its online banking activities includes blogs, podcasts, wikis and other kinds of social software in order to enable its clients to enjoy their banking experience (Bottomley 2003, 34). Barclays has managed to create a range of internet applications that its clients use in the process of enjoying their internet experience. Today, in all the Barclays branches and in many other banks in the UK and across the world, internet banking has become prevalent. With many technologies having been developed to help these customers in accessing and enjoying their banking experience (Gola & Roselli 2009, 90). Many internet banks have been created, serving many clients across the world without having to incur costs in travelling among others (Bottomley 2003, 98). In the same way, banks have effectively managed to reduce their overhead costs in paperwork and creating of physical offices. The impact Barclays has to the growth of online banking among business-2-business customers It is important to note the currently, the banking industry has become an integral part of human life for both their commercial and personal economic and social engagement. This industry has been evolving fast with times and seasons in order to embrace the new challenges and the dynamic consumer attitudes, tastes and preferences (Morris 2008, 145). Technology has continued to be key towards the increasingly significant roles in the banks’ evolution process. In this case, it can be said that technology offers an intelligent environment upon which banks and other industries can establish their competitive advantages. Barclays, with its rich history and experience in the banking sector has been actively involved in the process of ensuring that it creates reliable strategies and approaches towards creating competitive advantages (Hamadi 2010, 7). The creation of the cash dispenser was the first towards the company’s journey in influencing online baking among its customers across the world. From the cash dispenser, the company moved on to create the ATM, which allowed its customers to make the cash deposits and withdrawals at any time of the day without reaching the counter to get the same services (Gunderson 2013, 76). As other banks moved on to adopt this technology, the need to create other technology bases systems and tools for its customers became evident. For this reason, the company invested heavily in technology, lunching internet banking services in the early 90s. The company has managed to make applications that can be used on certain mobile phones in order to access and enjoy banking services (Shah & Clarke 2009, 89). Currently, many people can attest to the fact that mobile and internet banking have fundamentally changed the way in which people experience banking services. One of the reasons that can be attributed to this development is the fact that consumers in modern times have realized the need to be connected to the financial investments and money to make unexpected and important transactions (Bauen 2013, 31). For this reason, banks that offer internet banking like Barclays seem to be enjoying a lucrative market share of the expansive industry. This rising demand has been the driver of digital banking services, which most banks apart from Barclays have been strategically positioning themselves to exploit (Singh 2007, 76). Many banks have been simplifying the process of registering and accessing these banking services so that their customers can effectively enjoy these services (Bottomley 2003, 41). It is important to note that from the time Barclays launched its first internet services; a lot has changed because financial institutions are continuously making improvements to their online banking systems in order to create competitive advantages. Barclays bank, being among the pioneers of the banking industry have played a big role in influencing the practices of this industry. Many of the internet banking systems being created seems to be building from the already existing systems in order to enable their customers enjoy the banking experience (Stewart 2002, 45; Kondabagil 2007, 43). For this reason, it becomes evident that in years to come, internet baking is going to adopt a new phase, all for the benefit of customers and the particular banking institutions. Conclusion In conclusion, it is important to appreciate that the banking industry continues to be the backbone of all social and economic human activities (Furst & Lang 2000, 102). Information and technology, as long as it continues to exist will continue to influence business practices in various ways (Gkoutzinis 2006, 23). 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