Sustainability of New Banking Models

In: Business and Management

Submitted By aniketaj
Words 1761
Pages 8
Background

Since its inception in 2009, Fidor Bank has been disruptive within the financial services industry by rewriting the rules of banking and personal finance. It has taken the interpretation of direct banking to a whole new level. The direct banking model, which aims to provide services remotely via telephone or online banking without relying on a physical branch network, has been prevalent since the late 1980s when UK’s Midland Bank established a subsidiary named First Direct – the world’s first fully functional direct bank. [1] However, the concept gained widespread prominence after the commercialization of internet in the 1990s.
In the early 1990s, the first wave of adopters of the internet-enabled direct banking model were financial institutions such as USAA and First Security Savings Bank (Flagstar). [2] Towards the late 1990s, standalone ‘internet-only’ banks such as Security First Network Bank (US), First-e (Ireland), and mBank (Poland) commenced operations. Most of these ‘banks’ did not have a banking license and were therefore incubated and supported by conventional banks such as CommerzBank, and Banque d'Escompte.
The aftermath of the early 2000s dot-com bubble impacted some of these early movers and dampened consumer enthusiasm towards fulfilling their banking needs online. However, starting in the mid-2000s, there was renewed interest in leveraging the internet for retail banking needs. Emergence of social platforms and e-commerce led to a shift in consumer behavior. Consumers were becoming more receptive to online banking. [3] This led to an emergence of innovative startups which began reinventing the online banking experience. Most notable among these were Simple and Ally.
Shortly after this, the global financial crisis dented consumer confidence in the financial sector. Matthias Kroner felt this sentiment was overly pessimistic and…...

Similar Documents

Procurement New Operating Model

...Perspective Patrick W. Houston Robert Hutchens Procurement’s New Operating Model Contact Information Florham Park, NJ Patrick W. Houston Partner +1-973-410-7602 pat.houston@booz.com New York Robert Hutchens Partner +1-212-551-6499 robert.hutchens@booz.com Booz & Company INtrOductION By now, most companies have ridden one or more strategic sourcing waves that have collectively saved their organizations billions of dollars. Yet even after having benefited from these initiatives, the average company still leaves on the table unrealized savings equaling 5 to 10 percent of its total spending. These savings are not lost because of ill-conceived strategies or organizational incompetence; rather, their loss is inherent in flawed or incomplete procurement operating models. There are many reasons that the operating models constructed to procure and pay for goods and services prove inadequate. They may not include the processes, tools, or resources needed to fully execute the sourcing strategy. They may not be properly connected to organizational decision making or sufficiently integrated into key corporate planning processes. Decisionmaking authority and accountability may not be clearly defined. Or the IT systems that enable them may be fragmented, impeding efficiency and clouding the visibility necessary to ensure compliance with overall purchasing policies and objectives. In order to mitigate these problems and deliver on purchasing’s cost, quality, and service......

Words: 2764 - Pages: 12

E-Banking: ‘a New Era of Customer Satisfaction Through Sms Banking’

...E-Banking: ‘A new era of customer satisfaction through SMS Banking’ Abdullah Hassan, BBA(Hon’s), Fourth Year, Department of Management Studies, University of Chittagong, abdtek@gmail.com Abstract According to the Euronet mobile Banking Guide, there are currently close to 400 mobile operators in over 133 countries who are signing up 4 to 6 new customers every second. That means people are now much more interested in cell phone than before. Users always seek multi-dimensional use of their cell phones. The main purpose of this paper is to find out customer satisfaction through SMS Banking. Mobile phone operators provide various value added services (VAS) to their users including banking service and other utility services with the legal agreement with respective organizations. As mobile operators are trying heart and soul to retain existing customers and enhance new customers by adding VAS, hence a mobile banking solution called SMS Banking that allows people to bank with their mobile phones and its overview are presented in paper. Introduction There are various types of E-banking that are used in the field of IT and Banking. SMS Banking is one of them. SMS stands for ‘Short Message Service’. SMS Banking allows you to check account balance, transfer amount to other account, payment of utility bills like electricity bill, gas bill and water bill etc. Short Message Service is particularly adapted to 2G networks because they require low capabilities for data......

Words: 3779 - Pages: 16

Evolving Models of Retail Banking Distribution

...Reinventing Retail Banking Series Evolving Models of Retail Banking Distribution Capitalizing on changes in channel usage Produced by the Deloitte Center for Banking Solutions Reinventing Retail Banking Generation Y Reinventing Retail Banking Series Consumer Trust Reinventing Retail Banking Series Catalysts for Change The Implications of Gen Y Consumers for Banks Building Consumer Trust in Retail Payments Laying a Solid Foundation Produced by the Deloitte Center for Banking Solutions Produced by the Deloitte Center for Banking Solutions The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competitive landscape. Customers are demanding seamless, multi-channel sales and service experiences and not consistently receiving them. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation. The result is forcing banks to examine a more balanced, integrated approach to the customer experience and growth. In this series, entitled Reinventing Retail Banking, the Deloitte Center for Banking Solutions looks at how banks must move beyond simply meeting their profit and growth goals to delivering more completely on the customer experience. Specifically, these articles will focus on: understanding customers needs; identifying emerging and profitable customer segments and......

Words: 12004 - Pages: 49

Case – Basel Iii: an Evaluation of New Banking Regulations

...decedents, we were unable to directly identify whether the surviving occupant in a one-death car was married. To solve this identification problem, we use a two-sample instrumental variable (TSIV) design (Angrist & Krueger 1992). In the first stage of the TSIV analysis, we estimate whether drivers and passengers are married using a sample of cars where both the driver and the front passenger died (“two-death cars”). Our excluded instrument is the square of the driver’s age. Then we use that model to predict the probability that the driver and front passenger in one-death cars are married. Our main second-stage structural equation is a linear probability model in which the dependent variable is whether the driver in a one-death car died and the independent variables include the predicted probability that the driver was traveling with his spouse. The spousal altruism hypothesis predicts that the coefficient on the probability of being married is positive. This is indeed what we find. In our base model, males are roughly 37 percent and females roughly 54 percent more likely to sacrifice themselves for spouses than for non-spouses. In more refined specifications, that treatment effect rises to approximately 53-83 percent for men and 92105 percent for women. As a falsification test, we check if altruism disappears when a driver lacks control over his or her vehicle. We find that this is indeed the case when drivers are intoxicated, when the accident occurs in bad weather, when the......

Words: 8576 - Pages: 35

Banking Industry and Sustainability of Business

...Promoting Banking Services Biswa N Bhattacharyay In recent years, banks in India have not been able to mobilize surplus funds owing to the rapid emergence of competitive non-banking financial institutions. Non-fund based banking services have been underutilized by customers because of low awareness and this has affected banks' profitability. In this article, Bhattacharyay presents a marketing approach to promoting banking services and mobilizing deposits. Using primary data obtained from a country-wide survey of 19,000 households, Bhattacharyay has identified different segments of the customers which could be tapped by identifying their current and future needs and providing an appropriate range of services. Biswa N Bhattacharyay is Professor at the National Institute of Bank Management, Pune. After nationalization, banks in India have largely succeeded in mobilizing surplus funds in the Indian economy. Of late, however, the rate of growth of deposit mobilization has reduced considerably with the emergence of non-banking institutions and growth of competitive financial instruments. Banks have also failed to keep pace with the growth of surplus investible funds. If this present trend continues, banks may find it rather difficult to meet credit.obligations. At the same time, usage by customers of nonfund based miscellaneous banking services is quite low and has affected the profitability of the banking industry. There is also a sense of dissatisfaction with banking services......

Words: 2329 - Pages: 10

Sustainability Related to New Water Technologies

...Sustainability Related to New Water Technologies Name Class Institution Date Earth has provided us with various fossil fuels and natural resources that we need to live an adequate life. However, as fossil fuels dwindle and the human population continues to grow, the livelihood of humanity is threatened. Furthermore, the use of fossil fuels has several negative impacts on society. For example, fossil fuels pose a serious danger to the environmental through climate changes and global warming. Additionally, as fossil fuels become more scarce the prices will significantly increase. One way to alleviate the negative impacts of fossil fuels is by investing research and development into sustainability. Sustainability refers to the use of renewable energy resources to sustain the current processes of society and the economy. Sustainability also encompasses the idea that any developments should meet the requirements of the current society without affecting the capability of future generations to meet their requirements. As water supply systems continue to dwindle, new sustainability technologies have emerged that will allow society to overcome the challenges of scarce clean and fresh water. There are several ways in which to define sustainability. In essence, sustainability refers to our ability to sustain our current needs without negatively impacting future generation’s ability to meet their needs. However,...

Words: 1573 - Pages: 7

Dell New Model

...1. How might this new model have an effect on CMs’ relationships with their suppliers? (5 marks) Dell aims to establish a new model for their netbook procurement. Dell wants to have a direct negotiation with components suppliers. The goal is to reduce the current pricing cutting competition among CM. That is because Dell noticed that direct contract manufacturer (CM) negotiations destroy the component price visibility and made them lose control on outsourcing procurement. The direct CM negotiation also has strains to component suppliers. This new model impacts to CM’s relationships with their current suppliers. It destroys the relationship between CM and their current suppliers. New model make the CM needs to rebuild relationship with new components suppliers. When Dell gains a direct involvement with suppliers, it avoid CM use the alternative components for costs advantage. Dell will also have a strong relationship and effective communication with component suppliers. It can avoid Dell paying extra costs such as failure in quality standard or delivery delay. However, the CM might loses the negotiation terms and conditions with new component suppliers. CM also will not having a good harmony with new component suppliers compare to current component suppliers. When the CM cannot choose their specific suppliers which is allow CM to rebate for hidden price discount and charge Dell with market price, CM should pay the higher fees. The new model also impact the component......

Words: 322 - Pages: 2

Sustainability

...Sustainability Course Project Kathy Neihardt Sustainability 1. What is Sustainability? 2. Can our Society Endure? 3. What is a Sustainable Business? 4. World’s Most Sustainable Companies 5. Corporate Sustainability 6. What is the EPA Doing? 7. What is Sustainable Management? Sustainability Sustainability “creates and maintains the conditions under which humans and nature can exist in productive harmony that permits fulfilling the social, economic and other requirements of present and future generations” (EPA, 2015). Sustainability is also “important to making sure that we have and will continue to have the water, materials and resources to protect human health and our environment” (EPA, 2015). Sustainability What is Sustainability? Sustainability is “everything that we need for our survival and well-being depends on our natural environment, we need to create and maintain the conditions under which nature can exist in productive harmony to support present and future generations” (U.S. EPA, 2015). Can our Society Endure? According to SustainAbility “today it is by no means certain our society has the capacity to endure, not in such a way the nine billion people expected on Earth by 2050 will be able to achieve a basic quality of life. The planet’s ecosystems are deteriorating and the climate is changing. We are consuming so much and so quickly that we are already living far......

Words: 950 - Pages: 4

The New Model of American Education

... The New Model of American Education: Inclusion or Exclusion?? November 27, 2011 EEX5665 Bernadette Harris University of North Florida College of Education & Human Services Graduate School According to the U.S. Department of Education, the N.C.L.B. Act of 2001, came the law of public education that states “that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging State academic achievement standards and state academic assessments.” This law was instituted to increase accountability in public educators for the individualized education of every student in the public school system. In theory, it eliminates the ability to simply push students forward from grade to grade without evidence that they can perform at grade level. It brought with it the death of what we had previously come to know as “social promotion.” Quickly on the heels of N.C.L.B. came the I.D.E.A. (Individuals with Disabilities Education Act) of 2004, which affirms the guiles of N.C.L.B. while taking accountability a bit further. I.D.E.A. states that “all students (including those with disabilities) must have access to a free and appropriate public education in the least restrictive environment” (Wright, 2004). The “least restrictive environment,” as defined by legislators, has become what is now known as “inclusion education” and the birth of the “inclusion” classroom. ......

Words: 1844 - Pages: 8

Crm in New Age Banking

...BANKING PROJECT | October 2 2011 | ABSTRACT: The pulse of this era says that for a successful venture customer relationship management (CRM) is to recognized as a widely acceptable concept. In simple words to understand CRM we can consider it another name for the banker customer relationship. Macro-economic factors like globalization, liberalization and modernization has given it a new form. Today’s CRM requires real time interaction than that of the earlier times. Focus of various banks has changed from attracting customers to retaining as well as attracting new customers. Ensuring safety and at the same time efficiently utilizing resources is need of hour.The report presented is an initiative to address the issues and status of CRM with focus on evolution and background of this concept. How the technology has helped CRM in new age banking is also discussed here. | CRM IN NEW AGE BANKING | VIVEK SHARMA 10BSPHH011019 SECTION: C CONTENTS 1. Abstract 2 2. Introduction 3 3. Evolution of CRM 4 4. Customer relationship management 5 5. Overview of Indian banking sector 7 6. CRM in new age 12 7. Role of IT in CRM implementation 14 8. Present scenario 18 9. Conclusion 20 Abstract The pulse of this era says that for a successful venture customer relationship......

Words: 4655 - Pages: 19

Hie Sustainability Utilizing a State Government Approach: a Public Utility Model

...utilizing the public utility model while attempting to address the key elements for success. The key issues addressed and examined will include, funding for HIE start-up and on-going costs; stakeholder engagement; organizational structure; patient consent and user fees; as well as technical architecture, such as for data maintenance. HIE Sustainability Utilizing a State Government Approach: A Public Utility Model Health Information Exchange (HIE) holds the potential to increase the efficiency, cost effectiveness, quality, and safety of health care delivery. It could also facilitate monitoring, planning and analytic activities such as disease surveillance, research in clinical effectiveness and the evaluation of health care policies and resources. Currently, however, electronic HIE is still in the beginning stages of development within the country, primarily due to issues such as competing organization interests and lack stakeholder interests, and maintaining financial sustainability. Addressing these issues, as well as others, have been the focus of many HIE research projects, advisory committees, and initiatives, with the aim of providing an outline for the development and maintenance of sustainable HIE. Key areas of focus revolve around the distinct policy and governance approaches for creating HIEs that include either the federal government, state government, private sector, or a combination of all approaches. In addition, sustainable business models for state......

Words: 3124 - Pages: 13

Groupon's Business Model and Its Sustainability

...Groupon : In its simplest form Groupon (derived from "group coupon") is a deal-of-the-day website that features discounted gift certificates usable at local or national companies Business Model: The company offers one "Groupon" per day in each of the markets it serves. The Groupon works as an assurance contract using ThePoint's platform: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. Groupon makes money by keeping approximately half the money the customer pays for the coupon. Its business model essentially consists of economies of scale and economies of networking. Sustainibility : According to an article published in Forbes titled “Is Groupon's Business Model Sustainable?” (http://www.forbes.com/sites/panosmourdoukoutas/2011/10/22/is-groupons-business-model-sustainable/) Groupon’s business model is not sustainable for two reasons : 1) it is selling other company’s offering who have the upper hand in deal negotiation and 2) they have considerable direct competition from companies with a broad user base like Google, Yahoo, Expedia and so on. The findings of an academic study of Rice University from 2010, from 150 Groupon businesses in 19 cities: (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1696327) • 66% profitable; 32% unprofitable. • Restaurants were the most unprofitable......

Words: 293 - Pages: 2

New Technology Disrupts Old Model

...2.0 New technology disrupts the old model – Modern Day Challenges 2.1 Preamble With the increase in technological innovation we can observe how these forces are disrupting the conventional business models and marketing strategies of industries. These innovations have shaken core of the business world where several venerable facets of the media industry such as newspapers, radio and television are clamoring for their breadth under the impact of innovative giants such as Google and TIVO with large chunk of ad revenue shifting from conventional channels to more topical channels (refer graph 2.1). Why? Primarily, conventional media industries were not poised for changes, as we observed the break neck speed at which we have proceeded from web 1.0 to 3.0 within the last decade. Could the companies have avoided the wreckage if they had prepared for this pace of change? That is questionable. Graph 2.1 We can observe several strategic inflection points which have diminished the prominence of media industries; primarily, the ability of internet based technologies to deliver richer content in a cost effective manner in comparison to the high legacy cost of running a newspaper (i.e. office buildings, printing press, editors, photographers etc.). Second is the failure of the media companies to keep pace with the evolving changes around them, and the final elements of this downward spiral is the industries disregard for the customer base or the target market, i.e. producing......

Words: 1496 - Pages: 6

Basel Iii: an Evaluation of New Banking Regulations

...Case#1 Page 1 Basel III: An Evaluation of New Banking Regulations Q#1 – Discuss the relationship between the capital base of banks and the 2007-2010 financial crisis and Great Depression (120 words)  Most Economists would agree that the 2007-2010 crisis, was the worst global financial crisis since the great depression. During both of these times, the capital base of banks was severely compromised. Therefore, bank regulations are needed to improve the quality of banks’ capital base to become more resilient during economical crisis. During the Great Depression, major banks failures resulted after the stock market crash. These failures began as debtors defaulted on loans and depositors withdrew their deposits en masse. Outstanding debt increased as prices and income fell. Bank failures increased as desperate banks called loans yet, borrowers did not have the time or money to pay. In addition, capital investment slowed and banks struggled to build up their capital reserves by making fewer loans. Many would say that the Federal Reserve allowed the money supply to shrink to 1/3 and transformed what was a normal recession to the Great Depression by restricting emergency lending to failing banks. However, the Federal Reserve could not react in part because the Federal Reserve Act, which required 40% gold backing of Federal Reserve notes issued. During this time, the Federal Reserve hit this allowable credit limit. Reduced capital reserves resulted in......

Words: 526 - Pages: 3

Negative Impacts of Use of New Technology in Banking

...Negative Impacts of Technology in Banking Sector The term “banking technology” refers to the use of sophisticated information and communicationtechnologies together with computer science to enable banks to offer better services to itscustomers in a secure, reliable, and affordable manner, and sustain competitive advantage over other banks. In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. Importantinitiatives with regard to the reform of the banking system were taken in this phase. Importantamong these have been introduction of new accounting and prudential norms relating to incomerecognition, provisioning and capital adequacy, deregulation of interest rates & easing of normsfor entry in the field of banking.Entry of new banks resulted in a paradigm shift in the ways of banking in India. The growingcompetition, growing expectations led to increased awareness amongst banks on the role andimportance of technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going infor the latest technologies so as to meet the threat of competition and retain their customer base.Indian banking industry, today is in the midst of an IT revolution. A combination of regulatoryand......

Words: 2242 - Pages: 9

Trapped - Gefangen in Island (3) | Exactly How Recently Was Porsha Williams' New Man Dating Other Women? | Terminada Battlestar Galctica (2003) 2004 - 2009