Employee development strategies in the B2C banking environment: two Australian case studies

The implementation of technology and, in particular, eCommerce technologies has had unforeseen consequences for the relationship between managers and employees. To be able to operate in an increasingly global and competitive environment, retail banks have had to develop new ways of dealing with their employees. Issues have arisen that have necessitated a rethink in the way employees interact with customers and this, in turn, has required changes to human resource strategies. The question we address in this paper is what are the employee capabilities and qualities retail banks must develop to satisfy both more sophisticated customers (who demand flexibility of interactions, responsiveness and convenience) as well as the organisation’s own needs (including expanded sales opportunities, cost containment or reduction and customer loyalty) when implementing eCommerce technologies. The paper discusses two case studies illustrating some of the issues with which banks, as service organisations, have had to deal. These two banks have taken rather different approaches in their use of technology to interact with their customers and this has implications for the way they manage their employees who deal with those customers.

The road to internet banking: understanding emerging customer issues

This paper presents findings from an empirical study of banking customer experiences with the adoption of Internet banking. Using a qualitative, interpretive grounded theory approach and single and group interviews, the study explores customer perceptions and experiences and provides an understanding of how and why specific factors affect their decision whether or not to bank on the Internet in the current era. The findings are used to develop a theoretical framework which conceptualizes and links consumer issues influencing the adoption of this application, and we also provide a set of recommendations for banks. Specifically, the findings suggest that convenience – in particular, time savings – is the major motivator to bank on the Internet, while there are a range of other influential factors which could be modulated by banks. The results also highlight increasing online risk acceptance by customers and the growing importance of deep levels of customer support for online services. Key gender differences in attitudes to Internet banking are highlighted. This study suggests that organizations will improve their management of customer attitudes to new Internet service applications by understanding the need to proactively address customer fears and misconceptions about the technologies involved.

Productivity and efficiency analysis of Australia banking sector under deregulation

This paper conducts productivity and efficiency analysis of banks operating in Australia since the deregulation of the Australian financial system in early 1980s. Applying data envelopment analysis (DEA), with a moving window, the Malmquist indices are determined in order to investigate the levels of and the changes in the efficiency of Australian banks over the period from 1983 to 200 I. The DEA window analysis is adopted in order to relieve the small sample problem that in previous studies has proved problematic in the study of the Australian banking sector. The pal1icular window used in this case has been carefully designed to ensure the robustness of the efficiencies scores to changes in the window width. A second-stage regression is conducted by using the unconditional bootstrap approach suggested by Xue and Harker (1999) to overcome the dependency and heteroskedasticity of DE A efficiency scores. The empirical results demonstrate the effect of deregulation on the performance of individual banks, banks of different organizational types and the entire Australian banking sector.

Directors' remuneration and performance in Australian banking

This paper explores the relationship between directors' pay and performance within Australian banking, using panel data for the 1992-2005 period. The relationship between CEO pay and performance is investigated also. Several earnings models are estimated, using different dependent variables, alternate measures of performance and different estimation techniques. The results indicate an absence of a contemporaneous relationship between directors' pay and bank performance, and no association with prior year performance. However, there is a more distant pay-performance relationship, with total directors' pay having a robust positive association with earnings per share lagged two years, as well as with ROE lagged two years. The other key determinants of directors' pay in Australian banking are bank specific managerial policies, lags in the administration of pay, bank size, directors' age and directors' stock ownership. In contrast to total directors' pay, the evidence confirms a strong positive and direct association between CEO remuneration and prior year bank performance. The pay-performance association is stronger and more direct for CEO remuneration than it is for total directors' remuneration. The responsiveness of CEO pay with respect to bank performance appears to have increased over time.

Mobile banking : concept and potential

The internet and the mobile phone - two technological advancements that have profoundly affected human behaviour in the last decade - have started to converge. The products .of this association are mobile data services. Using a variety of platforms, services are being created to enable mobile devices to perform many activities of the traditional internet, albeit in a reduced format for mobile devices. One area of activity is mobile (m-) banking (one of the first areas of commercial transaction on the wireless internet). Banking is an area that has extended in many different ways in recent years, including telephone and online banking. M-banking provides yet another channel for banking services, and in emerging markets, provides some possibility for becoming a primary channel. This paper examines the strategic implications of m-banking and the strategic positioning of m-banking services in different markets. The paper concludes with a discussion of the future for m-banking services.

Technical and scale efficiency of Islamic banking operations in Malaysia: an empirical investigation with a longitudinal perspective

Against the background of increasing competition from globalization and the trend towards consolidation, diversification and rationalization, the study of efficiency is most relevant in the Malaysian Islamic banking context, where all domestic commercial banks operate Islamic banking schemes. Using the non-parametric method of Data Envelopment Analysis (DEA), this study investigates the recent efficiency of the Malaysian Islamic Banking system. The attributions of technical efficiency (utilization of capacity) and scale efficiency (optimality of scale achieved) are identified. Further, Islamic Banking Schemes operating under the dual banking system of foreign and domestic commercial banks were benchmarked to the country's two full-fledged Islamic banks to provide insight of the relative efficiencies. Amidst an overall improvement in TE and SE, it was noted that foreign banks (FB) increased efficiency levels to achieve full efficiency over the six-year period, and domestic banks (DB) followed by smaller improvement while the fully-fledged Islamic banks (FFIE) experienced a general decline in efficiency which was solely attributed to scale inefficiency. The findings provide useful guidelines for policy implications and may also assist banks concerned with their strategic planning with regard to the future of Islamic banking.

To choose or not to choose: exploring Australians` views about internet banking

This paper explores Australian domestic customers' choices with regard to Internet banking, examining why it is taken up by some Australians and not others. The constructivist conceptual framework and the grounded nature of the method enabled in-depth exploration of key issues not undertaken before by the mainly positivist studies. The purposeful sample of 32 participants was selected to represent the major categories of people relevant to the research. Everett Rogers' famous analysis of 'diffusion of innovations' was one theoretical framework used to illuminate the findings; the other was digital divide factors in relation to banking choices. The findings include 1) that the major motivation for people to adopt Internet banking is convenience, closely linked to time savings and ease of accessibility, as well as confidence and skill in Internet use; and 2) that, at the time of the study, digital divide factors were playing an important part in banking choices.

EBanking adaptation and dot.com viability : a comparison of Australian and Indian experiences in the banking sector

With the advent of widely-accepted eBusiness activities, many banks have floated dot.com entities to create a presence on the Internet and take advantage of its power and reach. Like many other businesses, banks expected an increase in market capitalisation as a result of their dot.com floats, perceived broadly as a measure of growing profitability. Despite the negative publicity that the recent spate of dot.com crashes has generated, banks seem to continue floating online spin-offs. Our exploratory study investigates this phenomenon, studying the drivers for change in the evolution of the banking sector, and the move towards electronic banking. We focussed on two economies – Australia and India – to aggregate the major factors in this evolution from the perspective of two disparate economies.

The paper describes our qualitative, document-based investigation of the Australian and Indian banking sectors, and subsequent quantitative analysis of the impact of dot.com floats on market capitalisation within this market sector. We then describe the effect of applying both Transaction Cost Economics to our findings, which indicates that the cost of transacting business has been reduced overall by the creation of dot.com entities; and “catch-up, fall-behind, forge ahead” theory to gain an economic perspective. The paper provides both practical assistance for banks in making decisions regarding e-portfolios, as well as for policy makers in the economies reviewed; and has the potential to contribute to academic research into eBanking more generally.