Friday, May 17, 2019

Middle Range Theory Essay

Bank of the States is the largest US patois founded in 1904, it has expanded by several acquisitions. By the end of 2009, Bank of the States was the commercialise leader serving 82% of the US population and over 53 million customers. They be positi atomic number 53d as number one in online and liquid banking. Their nimble banking operate were launched in 2007 and have gained 4 million customers in less than three years. Acquisitions do by Bank of America prior to the financial crisis ca employ a very strong drop in their stock price.Customers In 2009, 10 million customers physical exertiond mobile banking and this is expected to grow to 37 million by 2014. Customers that physical exercise mobile banking are not the resembling as online customers. Customers that use mobile banking represent a different segment of the market that other banking customers. pledge issues, a perceived low value and expense, were the primary reasons that customers did not switch to mobile bank ing. Potential customers were un leaveing to try a new banking service that are represented an extra cost and they were also terror-stricken of losing control of their finances.Debit cardholders were the most active users. It was convenient for them because they could check their account at any time. Customers that used this service changed their usual banking channels and as a result -the bank had a higher holding for these users of online service. Competition/Competitors Bank of Americas main competitors were Bank of New York Mellon, JP Morgan Chase Co. , Wells Fargo Co. , Citigroup, and PNC fiscal Services. These competitors also used mobile banking to ensure good service for their customers.They used SMS, customized web browsers and apps, depending on the bank and the customers they served. Citibank and Wells Fargo had different applications customized for their stain groups. General Context Considering that the banking industry is fragmented, with thousands of banks offe ring retail and wholesale banking run ten of the largest banks hold 46. 4% of total deposits, Bank of America world the largest one. The mortgage crisis of 2009 led to a deep recession and spilled over into a financial crisis that affected the retail banking business.Banks started waving fees and offering supernumerary benefits in order to capture and retain customers. rambling banking was introduced in the US in 2007 which added be to distributively transaction. However, these costs were lower than call centers and interactive voice response costs. Bank of America had three options mobile messaging (mobile stream modification without any software installation), mobile Internet (wireless application protocol), and mobile applications. Mobile applications in particular were more sophisticated and costly. Smartphone use was estimated to grow to 46% by 2014. Development plightBank of America has two options to handle the future of mobile banking 1) Build new and various applicat ions to target different customers a) Pros i) Customers want customization in the products this will increment retention and satisfaction. ii) Marketing strategies cannister be part into different types of clients. This increases efficiency and reduces costs. iii) Superior brand and innovation perception. a) Cons i) Cost of application creation will increase due to the different areas and type of customers at Bank of America ii) Any changes in the bank services will have to be applied to all apps. somewhat customers will have to download and use various apps at the same time 2) Refuse to add complexity to the current application a) Pros i) No extra costs on building a new application ii) Customers that don? t the likes of technology or doubt about security issues wont be affected b) Cons i) both(prenominal) other banks offer better mobile apps and this will increase their competitive advantage ii) Customer satisfaction will suffer if the app is not updated and does not fulfill their needs. iii) Transactions will still be done through ATMs, Call centers and IVR, which are 4 to 11 times more costly.Opportunities Since Bank of America is one of the largest financial institutions in United States that has millions of customers online banking is an important feature that offers to ease transactions and provides recover to billing statements. However, because of the multitude of services banks offer it is overly-complicated to provide all items in one bundle. Because of this complexity (to add all the banking features in one app for mobile banking) Bank of America should target tablet-users to provide all the banking features with different applications.For example Bank of America can provide tools like market reports for savvy investors or savings programs for households (where it is easier to keep track of expenses. ) Tablets are relatively easier to use than mobile phones. Targeting such a market at an early stage can broaden the spectrum in which Bank of A merica operates its mobile banking. This opportunity which targets future markets as computers are being replaced by tablets should not be forgone.Ease of access and use for customers with multiple Bank of America services, easier introduce of frauds or errors. ) Bank of America customers will be able to access a large roll of services online. c) For some high-end apps a nominal fee may be charged to cover some of the technology budget. 2) Cons a) Customer information may be at risk as it is insecure to access sensitive information online for which Bank of America will have to maintain high privacy, increasing cost. b) Some of the features may still be complex and require customer support hotline. c) Customers may act on unintended transactions involving significant funds.Recommendations Bank of America needs to improve the complexity to the current application. after(prenominal) analyzing the options and the opportunity, we think that Bank of America has to differentiate themsel ves from their competitors while offering a great service to their clients, we would advise to increase the functionality of the mobile app. This change will bring extra benefits to the different type of clients in a individual(a) download. The company will also cut costs in the type of transactions made by the clients.The continuous growth of the mobile market especially the Smartphone use is another aspect of the recommendation. Having a mobile has become a commodity for the population. The new generation will get so habituate to this technology that they will be able to deal with any app complexity without any problem. Bank of America has to think of its future customers, not only the current mobile technology adaptors. 1) Pros a) Having a better application will differentiate the bank compared to their competitors b) Customers will have overall services in a single application.Mobile payment services would be added to the app and will attract and benefit many customers. d) Tr ansaction costs will become lower as the % of Smartphone users grows (46% for year 2014). 2) Cons a) Added complexity will discourage some customers to use the application b) Speed of the application may suffer if the customer has a bad connection or has too many applications downloaded in their mobile. c) The cost of developing a more complex application is big and may require more expertise and training for employees and customers as well.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.