Following the unconfirmed rumors of an online banking security breach two days ago, which uproar in the national press, the company would like to issue this statement that shows the companys stand. As a company we would like to state that the security breach is unconfirmed and the bank cannot confirm these reports yet. At the issuing of this statement, what is known is that there are reports on the breach but to what extent, is yet to be known[1].
The banks board of directors is holding meetings and contingency plans are being drawn to try and mitigate the current situation. Communication channels targeted at the various audiences will be specified as soon as the first round of information is obtained. The bank would like to assure its customers that there is no need for fear and that its reputation will still be maintained. Immediate action is being taken to get to the bottom of this and a security audit team is being assembled at the moment[2].
We as a company understand the need for information at this time but would like to ask for patience as we try to work on finding the problem and its solutions. Therefore the bank would like to request for tolerance and patience, and it will do all that it can to ensure that the media receives regular and accurate updates. In addition, the bank wishes to run a PR campaign (with immediate effect) to reinforce the brand and to assure customers that they can confidently avail all existing banking services[3].
Intermediate/updating statement
We would like as a company to confirm that an online security breach did occur but we are not quite sure to what extent. This comes on the backdrop of our initial statement two days ago that refuted the rumors that were being circulated. We would like to clarify that at that time, they were unconfirmed reports and no actual concrete information was available to either confirm or acknowledge the security breach.
Despite the initial statement, the negative media attention given to the company, and growing concerns from our consumers, clients, stakeholders and the public as a whole, the company has taken upon itself to get to the bottom of this and find out the exact situation and its implications to the banks business and service provision[4].
This statement comes after wide consultations and we would like to allay the fears that are growing among our loyal clientele base, that the bank is still able and will continue to offer the services it has been offering since it begun. To this effect we would like to ask the media and all relevant parties to make a point of attending the press conference scheduled for tomorrow afternoon where more information will be availed to you[5].
At the time of issuing this statement the banks board of directors has already taken action and initiated a security audit of the banks information technology system which although will take time, will help in shedding light to the extent of the breach. Information will be constantly availed as soon as it is gotten and confirmed by the bank.
The company would also like to ask the media to confirm any information they have with the company before they go to press with it. The bank wishes to thank all those that are working tirelessly to uncover this breach and would like to assure its customers that everything is under control and that their individual accounts are safe and that any fraudulent activities will be efficiently and effectively dealt with[6].
The press conference
The scheduled press conference to take place tomorrow afternoon will focus on allaying fears of a meltdown within the banking services. During the press conference a desk will be set up for handling any enquires from concerned customers, and the banks customer relations will try to provide as much information as possible. There will be speeches from the banks chief executive officer on the situation and actions that have been taken to find out what exactly is going on[7].
There will be a question and answer session at the end of the CEOs speech that will be handled by the companys security department. The responses shall be documented and made available to all media organizations at the end of the press conference. To check on misinterpretation of facts, requests for one-on-one questions, should be submitted before the start of the press conference and this will be handled only by the banks CEO, who is the only authorized person to speak on behalf of the bank[8].
All attendants to the press conference shall be provided with a press kit that details all the banks actions and the information that is at hand. The location of the press conference will be at the banks main headquarters, this will help protect the banks trusted reputation at all times and work to repair any potential damage caused by the unconfirmed rumors and media publications.
Invitations to the press conference will be sent out in advance so that all invited guests are able to prepare themselves. In addition, a follow up will be made constantly by the banks public relations division, and more information will be given as soon as it emerges[9].
The CEOs speech
As you are all aware, there are unconfirmed reports going round that we have suffered an online banking security breach resulting to several unconfirmed reports in the newspapers and an investigation being carried out. The security audit of the banks information technology system that is underway will take time to uncover the actual situation but I would like to assure you that we hope to uncover the truth and get some understanding from this phenomenon that beholds us.
I would like to emphasize that the bank and all its subsidiaries and the brand as a whole is still and will remain a major player in the banking industry and this situation should not in any way affect your perception of this bank.
As a company, it is with absolute confidence that I assure you that this small glitch will have no impact at all on the services provided by the bank. I have confidence in my employees and workforce that things will go on as smoothly as they were before. I would like to passionately ask all our partners, the stakeholders, shareholders, our clients and customers and all that are either directly or indirectly connected to us to bear with us at this time as we try to find out the exact situation and its implications.
I would like to reiterate that we are not quite sure of the extent of the security breach and information on the ongoing investigation/audit and any other relevant information will be made available through our public relations department to all relevant parties as soon as we have an idea of what we are dealing with.
I would like to ask the media not to publish unconfirmed reports before checking their validity with the company first and this way; we will all avoid falling into panic and making rash decisions. With that I would like to thank you all for turning up at this press conference and showing your support.
References
Goel, S, Crisis Management: Master The Skills To Prevent Disasters. Global India Publications, New Delhi, 2009.
Johnston, J, & Zawawi, C, Public Relations: Theory and Practice. 3rd ed. Allen & Unwin, Crowns Nest, 2009.
Lewis, GW, Organizational crisis management: the human factor. Auerbach Publications, New York, 2006.
Wilcox, D, Public Relations: Strategies and Tactics. 8th ed, Boston, 2006.
Footnotes
GW Lewis, Organizational crisis management: the human factor. Auerbach Publications, New York, 2006.
J Johnston, & C Zawawi, Public Relations: Theory and Practice. 3rd ed. Allen & Unwin, Crowns Nest 2009.
S Goel, Crisis Management: Master The Skills To Prevent Disasters. Global India Publications, New Delhi, 2009.
D Wilcox, Public Relations: Strategies and Tactics. 8th ed, Boston, 2006.
GW Lewis, Organizational crisis management: the human factor. Auerbach Publications, New York, 2006.
J Johnston, & C Zawawi, Public Relations: Theory and Practice. 3rd ed. Allen & Unwin, Crowns Nest 2009.
D Wilcox, Public Relations: Strategies and Tactics. 8th ed, Boston, 2006.
J Johnston & C Zawawi, Public Relations: Theory and Practice. 3rd ed. Allen & Unwin, Crowns Nest 2009.
S Goel, Crisis Management: Master The Skills To Prevent Disasters. Global India Publications, New Delhi, 2009.
The study plans to bridge the gap of knowledge in the acceptance and adoption of mobile banking among the consumers. The research will be an exploratory research. The reason for the choice of this methodology is due to its innovation of novel ideas that is required in the mobile banking market. Through exploratory study will provide new and clear concepts explaining the dynamics of mobile banking consumption.
Research problem
The realization that the technology plays a critical role in the development of banking have adverse effects on the performance of the banking institutions and has led to reorganizations of the operation process and as well as the way banking processes are conducted. The most affected process is the customer services.
Technological developments have caused banks to move from the traditional queuing services to the modern day where customers can reach banks at any place and at any time. In fact technological development has revolutionized the banking industry. One of the areas that have been affected is the communication. Technology is utilized by banks to enhance connectivity and communication as well as in other business processes including customer services.
Mobile technology is one of the technological developments used by banks to increase the customer services. Currently, banks utilize mobile technology to allow their clients pay bills, receive updates in, plan payments as well as other aspects of consumer services while in their private life.
The major issue is whether the consumers have adopted the technological developments in banking. Banks have not established whether the consumers have adopted the new electronic payment services as in mobile banking. In addition, it has not been established what factors affect the mobile adoption. These are the problems and relations that will be examined in this research study.
Research objective
The research study has the following objectives:
To investigate the adoption of mobile banking by the consumers
To establish specific factors affecting the mobile banking adoption by the consumers.
To formulate appropriate recommendations to the banking institutions and the industry regarding strategies that may enhance the adoption of mobile banking.
Research hypothesis
This study will test the following hypothesis:
H1: mobile banking is effectively adopted by the consumers and not influenced by many factors
Ho: mobile banking is not effectively adopted by the consumers and influenced by many factors
Research plan
For this research to meet its obligations, it will be an exploratory research. The reason for the choice of this methodology is due to its innovation of novel ideas that is required in the mobile banking market. Through exploratory, the research will come up with new and clear concepts explaining the dynamics of mobile banking consumption, set up main concerns, build up on operational explanations and improve on the final research design.
The study is both qualitative and quantitative. The qualitative part will be based on the literature review while the quantitative will be based on data collected through a survey. The survey will consist of a questionnaire that will be administered to the sampled population of both mobile banking users and non-users.
Data collection
As a field survey, the information concerning mobile adoption and the factors afecting the adoption will be collected through administering properly designed research questionnaires, observation alongside conducting well-structured in-depth interviews to the unbiased selected users and non-users of mobile banking.
The well-designed research questionnaire will be administered to 60 users and 40 non-users. Each part of the questionnaire will constitute key items that suitably attend to the research questions. For instance, part one will constitute whether the consumer have embraced the mobile technology in banking services while part two will elicit factors that may have contributed their adoption or not of the mobile banking.
Other parts will generate insights amidst offering recommendations to the organization to adopt or abandon the employees training strategy to augment success. Some items in the questionnaire will throw light on the mobile banking services and its impact on the consumers along with the consumer knowledge of existence of such services.
The questionnaire will thus be made of both open and closed ended research questions and this is believed to be of great significance to the researcher since it will assist in performing data analysis. Minor research tools namely direct observations, personal in-depth interviews and occasional conversation will be used to collect primary data.
Conversely, secondary research data will be acquired from the banking institutions, industry records, and other documents, which contain mobile banking information as well as its successes. For this particular case, the researcher intends to trace the mobile banking history and its adoption successes over the past years from the research secondary sources. Different scales will however be applied in the survey questionnaire during data collection to ensure the scales reliability and validity of some research questions.
For example, ordinary scale will be applicable in various research questions given that most questions will measure knowledge, feelings and experience. In contrast, the scale reliability will be made certain via applying the repeatability and internal consistency concepts. This implies that, the questionnaire will comprise of different questions asking about the same thing yet in a very different way. Finally, split half technique will be applied to attain internal consistency.
Data analysis
In order to ensure logical completeness as well as response consistency, the acquired data will be edited by the researcher each day to be able to identify the ensuing data gaps or any mistakes that needs instant rectification.
When data editing is completed, the collected research information will definitely be analyzed qualitatively and quantitatively. For example, any data that will have been collected through in-depth interviews and secondary sources such as the mobile banking files and the banking organizations documents will be analyze by means of content analysis along with the logical analysis techniques.
Furthermore, from the acquired independent variables values such the number of customers using the mobile banking services and the institutional success measured in terms of total output or general productivity, regression analysis will be applied to establish the correlation that exist between mobile banking services and the success of those institutions.
To obtain the best correlation approximation values, the study quantitative data analysis will be carried out by utilizing the integrated approach. Further quantitative data analysis techniques including percentages, frequency distribution and deviations will be used to determine the research respondents proportions that chose various responses.
The method will be applied for each group of items available in the questionnaire that ideally corresponds to the formulated research question and objectives. Line graphs, tables as well as statistical bar charts will be used to maker sure quantitative data analysis is simply comprehensible.
The findings indicate mobile bank services, in delivering the services to the clients, try to eliminate the impediments that the customers face from the conventional banking delivering of the services. The obstacles were identified to be from a diverse combination of items that are replicated from the obstacles in supply part of services. In addition, the hurdles are reflected from the obstacles associated with the purpose of cell phones as a means of conveying information from the part of the client in the delivery of services.
The study also indicated that mobile banking has achieved tremendous acceptance among consumers compared to other ways of banking such as internet banking that is still at its developing phase. Consequently, consumers have perceived mobile banking as the best way of carrying out banking transactions. According to the institutional studies, 80% agree that the mobile banking sector has made major strides in the delivery of services due to the rapid acceptance by majority of consumers.
However, the approval pace of mobile banking among consumers is not equivalent to the rate at which technology advances. Therefore, many factors were found to have a strong influence on the way consumers perceive and adopt mobile banking.
The impact of the increased technological advancement has compromised the proficiency of service superiority because services are initiated in the premature phases due competitiveness as well as outlay constraints. Consequently, the clients responses to the consumption of services are low because they think their needs are not considered. For instance, the customers feel that the adaptability of sustaining item services is inadequate.
Moreover, emphasis on expertise has an impact of overlooking basic requirements for approval in the provision of services. Technology has enabled mediums of creating new supply channels as well as communicating attributes of technology. Conversely, delivery involving technical knowledge comes with its own shortcomings. For example, there is lack of composition of service delivery and worth creation. In addition, customers have to know how to use technology-based electronics to achieve optimal usage.
An additional drawback in mobile banking is the functionality of cell phones in transacting banking services. Customers feel that the mobile phones are not effective in banking because for example, the cell phones have small keyboards leading to errors while accessing the services.
Further, studies show that consumers are dissatisfied by the confusing nature of the mobile phones while transacting banking services. Moreover, increasing concerns by consumers about transacting banking through wireless ways due to safety as well as significance of the services has had negative impacts acceptance of the service.
Conclusion and Recommendations
Results show that service providers must recognize the importance of client requirements when devising innovative services and products. Additionally, execution of information from familiarity of wireless banking should not be directed to the clients. As a result, banks have been able to make well-versed judgments in distributing assets as well as reduction of expenses.
It is evident that cell phones bear a huge ability of enabling success in accomplishing monetary operations and has led to the attainment of expansion in the financial sector with ease and less expenses. Therefore, it is essential for banks to expand their banking services to enable accessibility of their services.
As a result, government, supervisory bodies, service providers and all the stakeholders have easy access to the banking services from all regions. Further, implementing mobile banking services will bring on board non-bankers in the financial system. In addition, through creation of the understanding of mobile banking services among the people, they are able to embrace its use for personal gains.
The Australian banking industry has undergone numerous transformations over the past centuries. One of the most evident transformations relates to numerous mergers and acquisitions. During its inception phase during the early 1800s and 1900s, the Australian banking industry had numerous industry players. However, large banks have acquired most of the small firms and thus the industry has become concentrated.
Currently, four main banks control the industry. In an effort to develop a high competitive advantage, firms in the industry are increasingly implementing customer relationship management.
This move has significantly contributed towards the firms developing an effective rapport with its individual and institutional customers. Implementation of CRM will significantly contribute towards attaining their profit maximisation objective, which is only realisable if an effective strategy is in place.
Additionally, banks in the industry should also undertake a comprehensive value evaluation chain, which will contribute remarkably towards the firms effectiveness in formulating their CRM strategies. The industry has also been characterised by the emergence of ATM and Internet banking services, credit card reward systems, and increased bundling.
Industry overview
The banking industry is an important component of the Australian economy. The industry provides a wide range of financial services to institutional and individual customers hence contributing to the countrys Gross Domestic Product (GDP). The industry promotes the countrys GDP through the creation of employment.
Investment in information and technology is one of the ways through which the industry creates employment directly. The Australian banking industry also contributes to the countrys economic growth through taxation. From 2006 to 2010, the banking industry had paid a total of $38 billion in tax revenue. The tax revenue collected from the banking industry in 2010 amounted to $ 7.9 billion (Harper 2011, p. 1).
The industry also contributes to the countrys economic growth by maximising the shareholders wealth. During the period ranging from 2006 to 2010, the banking industry paid dividends amounting to $ 70.5 to shareholders (Harper 2011, p. 2).
The Australian banking industry is characterised by a high degree of concentration arising from the large number of industry players (Mathews 2003). The industry players are both domestic and foreign owned. Findings of a study conducted in 2009 showed that there are approximately 56 banks in Australia.
Twelve (12) of these banks are domestically owned, 34 are foreign branch banks and 10 are foreign owned subsidiaries. The chart below illustrates some of the Australian-owned and foreign subsidiary banks.
Australian owned banks
Foreign subsidiary banks
AMP Bank limited
Bank of China (Australia) Limited
Heritage Bank Limited
Citigroup Pty Limited
Suncorp-Metway Limited
Rabobank Australia Limited
Heritage Bank Limited
HSBC Bank of Australia Limited
Macquarie Bank Limited
ING Direct
National Australia Bank Limited
Beirut Hellenic Bank Limited.
Source: (APRA 2012)
The banking industry is also composed of 100 credit unions, 11 building societies, 66 providers of credit cards, 114 providers of various deposit accounts, and 111 providers of mortgage products.
Despite the large number of industry players, the market is dominated by four main nationally operated banks, which include the National Australian Bank, the Westpac Banking Corporation (WBC), and the Australian and New Zealand Banking Group (ANZ). The four banks account for 75 per cent of the total market share.
The control of the industry by these firms has arisen from the numerous mergers and acquisitions that the banks have been involved in over the past century. The mergers have significantly increased the degree of concentration. The industry has over the years continued to exhibit high profitability potential. The high degree of concentration is one of the reasons that explain why the industry is very profitable.
This trend is expected to continue into the future. However, one of the main challenges that the banking industry is experiencing relates to increase in pricing pressure emanating from commercial and retail deposits (Hall 2006).
Barriers to entry within the Australian banking industry are relatively high due to the intense regulation and industry consolidation. Over the past two centuries, a majority of small banks in Australia have been acquired by large banks. There has also been an increment in the number of international firms within the industry, which has led to generation of numerous factors stimulating barriers to entry.
For example, the mergers and acquisitions undertaken by the large four banks have been a challenge for small banks to enter the industry. This aspect arises from the fact that the new entrants will incur huge marketing cost in creating market awareness. The four major banks annual advertising cost is approximately $1 billion. Consequently, new entrants cannot match the large banks.
However, in an effort to ensure that the Australian banking industry is stable, the government is implementing numerous regulatory changes. Complying with these regulatory changes is relatively costly for small firms compared to large enterprises (Commonwealth of Australia 2011).
Customer Relationship Management in the Australian banking industry
Objectives
Most large firms in Australia have not implemented CRM. However, the case is different in the banking industry (Buttle 2004, p. 1). The large number of domestic and international players within the industry has made the Australian banking industry to become very challenging due to intense competition.
The large number of industry players has led to banks experiencing a significant reduction in the size of their deposits. Additionally, customers have the opportunity to select from a wide variety of banks from which they can deposit and borrow loans (Abbott 2006).
In an effort to attain a higher competitive advantage relative to their competitors, banks in the industry are increasingly becoming customer focused, and to attain this goal, banks are incorporating the concept of Consumer Relationship Management (CRM) amongst their best management practices.
CRM refers to a business model that aims at aligning an organisations sales and product strategy with its customers product requirements and preferences (Shanmugasundaram 2005).
Firms success with regard to CRM is dependent on the effectiveness with which they have implemented CRM technology solutions. One of the objectives why the banks are investing in CRM is to attain sufficient customer knowledge. Consequently, the firms will be in a position to achieve a number of objectives as outlined below:
Increase in overall profitability because the banks will increase their customer base. Additionally, the banks will be in a position to deal with their customers more effectively.
Customer segregation- The banks will stand a chance to segregate its customer base into divergent categories, for example with regard to the costs and benefits associated with the various customers.
Integration of CRM also enables banks to undertake cross selling more efficiently and effectively.
Customer satisfaction focusing on customer satisfaction is paramount in firms effort to retain their customers. Banks require a high level of Return on Investment (ROI) in order to be competitive. A high level of customer satisfaction is one of the ways through which firms can increase their ROI.
CRM will enable banks to attain their objective of developing a centralised information system by integrating processes, technology, and people.
The CRM will also enhance the effectiveness with which banks develop customer understanding.
Over the years, the National Australia Bank (NAB) has been committed towards developing CRM. Recently, the bank developed an effective CRM infrastructure via developing a campaign management system, a data mart, a CRM database, and a global data warehouse.
Currently, the banks main concern is how to optimise its CRM investment so that the front-staff can utilise the CRM more effectively in interacting with its customers (Commonwealth of Australia 2011). The number of financial products, which an individual has, determines the degree of loyalty.
Holding a large number of financial products increases the probability of customers being loyal (Shanmugasundaram 2005). Therefore, to improve their effectiveness in retaining customers, financial institutions should ensure that they address customers needs and requirements more effectively. However, banks should ensure that they attain this goal in an economic way.
Strategy
Currently, the business environment has become very dynamic. One of the factors that have led to this transformation is the growing intensity of competition in different economic sectors (Finacle 2012). The competitive nature of the Australian banking industry has made the concept of CRM to not only be considered as a technological solution, but also a strategy.
Therefore, managers should integrate CRM within banks value generation and business model. Integrating CRM in banking is critical because it enhances competitive advantage, for CRM is an important source of differentiation in businesses. Ultimately, banks will be in a position to improve their sales capacity and increase customer base.
Australian banks are implementing new approaches to CRM in an effort to attain customer-centricity, and to attain this goal, banks are taking into account a number of components. These components entail formulation of business strategy and development of a comprehensive data infrastructure.
The strategy formulation phase entails identifying customers hurt points . Formulating business strategies contributes towards growth promoting in a firm. Data infrastructure enhances the effectiveness with which banks interact with their customers (Chaudhry 2006).
Traditionally, banks in Australia have been more focused on function-centred and product-centred rather than being customer focused. The traditional systems implemented by banks have been effective in facilitating balance maintenance, providing customers with periodic financial statements, and account opening. However, this trend is changing and banks are increasingly adopting customer-centred models.
In their effort to implement CRM strategy, the first step that banks undertake is developing intelligent Customer Information System. Through proper CIS, banks can maintain a comprehensive data warehouse regarding their customers. Banks can collect different types of customer information from their customers as outlined below:
Purchasing behaviour, for example the frequency of purchase and purchasing power
Credit-worthiness
The customers background such as their demographics and lifestyle
Customer communication record, which entails evaluation of how a customer has been in touch with the business for example through complaints or compliments
Credit scoring, history, and performance rating- Some of the elements taken into account include loyalty and the probability of referrals.
Implementing customer-centred models attracts profitable customers, decreases capital costs due to carefully maintained customer relationship, and increases returns on capital invested coupled with providing an opportunity for firms to develop and introduce a new product (Benning 2012).
Retail CRM value chain
Customer Portfolio Analysis
Over the past few decades, Australian banks have become cognisant of the fact that their success is dependent on how well they understand their customers (Kerr 2003). One of the ways through which banks are attaining this goal is by undertaking customer portfolio analysis. Banks use various sources of information such as secondary sources and primary sources.
The secondary sources entail surveys conducted by credible market research companies. The research enables banks to understand the various customer categories. Consequently, they can formulate operational strategies that are more customer-focused and can contribute towards creating customer value.
Customer Intimacy
The Australian banks are committed at developing a comprehensive understanding of their customers. After collecting the customers data from various sources such as customer complaints, customer geo-demographic data, and market research, a comprehensive customer analysis is undertaken.
The analysis takes into account specific customer behaviour elements such as whom they are, how and what they do, together with where they are located. Banks attain this exercise by undertaking an intelligent data mining hence improving its CPA.
Develop the network
Firms within the banking industry understand that their success is not only dependent on how they counter the competition they face (Foss 2008). However, they are cognisant of the fact that their networks are paramount in their success. Consequently, banks are very committed in developing a strong network with stakeholders who enhance their ability to deliver value to their customers.
The networks that banks nurture cover employees, investors, shareholders, the government, and suppliers. One of the key elements in developing networks in the industry is trust. For example, banks have to develop strong networks with insurance companies. Additionally, banks are also concerned on how to manage, align, and satisfy the customers needs.
Value proposition development
At this stage, propositions on how to enhance customer value come into play for the firms have a comprehensive understanding of the customers needs. In their value proposition phase, different methods are utilised. Some of the methods include conducting public relation campaigns.
For example, the Westpac Bank conducted an advertising campaign that aimed at motivating its clients to speak to the managers on tax reduction. The value proposition process is also undertaken by engaging a number of issues such as their service offering, pricing, communication, people, product, people, and location.
Managing Customer Lifecycle
In a bid to remain competitive, firms in the Australian banking industry are continuously restructuring their operations and processes. One of the areas that banks are increasingly focusing on is the firms organisational structure.
Banks are increasingly adopting flatter structures to align themselves with the changing business environment. Additionally, they are incorporating front line staff and marketing managers who are customer conscious.
Banks are also implementing new customer acquisition, customer retention, and customer satisfaction measures. One of the customer acquisition strategies that Australian banks are using entails formulation of business plans.
The business plans enable customers to identify new target markets. In an effort to maximise the benefits posed by emerging communication technology, the ANZ bank has targeted online customers especially university students.
Successful CRM Strategies in the Australian Banking Industry
ATM and internet banking services
In an effort to maximise their deposits and loans, most Australian banks have become very innovative over the years, as evidenced by the fact that they have established extensive ATM networks within the country. Through the ATMs, customers can conduct a number of banking activities such as withdrawals and deposits. Consequently, the banks have significantly increased their operational efficiency and effectiveness. This has contributed towards the banks increasing their rate of customer retention.
The banks are also appreciating the concept of online and mobile banking by developing secure banking portals. Online banking has presented banks with an opportunity to attract new customers due to the high level of efficiency and effectiveness associated with Internet banking (Commonwealth of Australia 2011).
Credit and charge card reward programs
In line with their effort to attain a high degree of customer-centricity, Australian banks have been committed at delivering value to customers. One of the avenues that banks are increasingly turning to is the use of credit card and charge card programs.
These cards provide convenience to customers in their purchasing patterns. Additionally, the banks are also formulating reward programs that aimed at enhancing consumption amongst consumers especially with regard to certain products such as petro and airline products. This aspect increases the number of withdrawals that consumers make, hence maximising their profit (Switt 2011).
Bundling of financial services
Australian banks have made it impossible for individuals to access credit facilities in the form of loans, which has arisen from the increased bundling within the industry. The bundling is undertaken by offering credit facilities at favourable rates to customers who hold different products with the banks and discriminating those who do not. The downside of bundling is that it negatively affects customer relationship due to its stickiness.
Bundling within the Australian banking industry has compelled some CEOs, such as Westpac Bank CEO, to brand the industry as a less competitive field.
Drivers of change in the Australian banking industry and implications for changes in CRM
The Australian banking industry has undergone extensive revolution over the past two centuries. Some of the factors that have contributed towards the industrys transformation relates to intense competition, technological innovation, government regulation, and changes in consumer behaviour. The intense competition is stimulating firms in the industry to review their operational strategies from time to time.
One of the ways through which banks are attaining this goal is by transforming from conventional operational strategies such as being product-centred and becoming customer focused. This move will significantly improve the banks commitment towards implementing effective CRM strategies to remain competitive.
The high rate of technological innovation with regard to ICT is also a major driver of change for the banks will be in a position to implement more effective and efficient CRM technologies such as the CRM software. Intense technological innovation will lead to development of diverse CRM technologies. Consequently, implementing CRM technology will be more cost effective hence improving the firms competitive advantage.
Conclusion
This paper has revealed that the Australian banking sector has been very successful despite the negative effects of the recent global financial crisis. The industry has continued to exhibit a high degree of resilience. Despite the intense competition, the industry has a high potential for growth.
Therefore, it is paramount for firms in the industry to formulate and implement operational strategies that will contribute towards attaining a high level of competitiveness. One of the variables that banks should consider is the customer. Consequently, implementation of an effective CRM will contribute towards improvement of firms competitive advantage within the industry.
However, the success of Australian banks in CRM is dependent on how they take into account the various CRM components.
Reference List
Abbott, M 2006, The performance of the Australian banking sector since deregulation, Swinburne University of Technology, Melbourne.
APRA: List of authorised deposit taking institutions 2012. Web.
Benning, P 2012, Customer Relationship Management: concepts and strategies, Kogan Page, New York.
Buttle, F 2004, CRM in Australia, Macquarie Graduate School, Sydney.
Chaudhry, A 2006, CRM: making it simple for the banking industry, SAS Institute, Cary.
Commonwealth of Australia: Economics reference committee, competition within the Australian banking sector 2011. Web.
Finacle: CRM in banking 2012. Web.
Foss, B 2008, CRM in financial services: A practical guide to making customer relationship, Kogan Page, London.
Hall, K 2006, Recent trends in Australian banking, Economic Society of Australia, Sydney.
Harper, B 2011, Linking banks and strong economic growth, ABA, Sydney.
Kerr, R 2003, Gaining an understanding of your customers using portfolio analysis, Kluwer, London.
Mathews, K 2003, Developments in the New Zealand banking industry during 2003 Financial Stability Department, Reserve Bank of New Zealand Bulletin, vol. 67 no. 3, pp. 35-48.
Shanmugasundaram, W 2005, Customer relationship management: modern trends and perspectives, PHI Learning, London.
Switt, R 2011, The new economic opportunity for business: creating increased profitability through CRM, NCR Report, London.
IPScape is a private company that offer contact platform to companies with their customers. The firm was founded in 2005 in Australia and it has employed over 40 people across the world. The firms uses the new cloud technology to offer its services to customers these services include customer contact where the services can be customers according to client needs like minute-by-minute needs.
IPScape products are common solutions for call centre services. They help them to minimize issues of cost repression, incorporate enhanced problem of communication such as the social media, provide real time insight and faster access to the market.
In the age where customer have become more demanding in terms of their expectations and the need of service companies to aggressively adapt to competition, companies no longer rely on their intelligences alone. The concept of outsourcing is offering opportunities to offshore services to low-cost companies like in India.
National Bank of Australia NAB
The National Australia Bank has earned the reputation of being among the biggest financial organization and banks in Australia. This status is rated based on the company capitalization and the number of clients it ahs. In the worlds, NAB is ranked number 17 biggest bank based on the same variable of market capitalization (Hoover, 2008, p. 43).
The bank now has its operations in over 10 foreign nations and serves about 8.3 million clients and bank customers. About 2.3 million of these clients are wealth management clients based on its 2008 annual report. Internationally, NAB runs over 1808 branches and service centres in different nations plus over 4,600 ATM.
NAB has realized that outsourcing is one of the best ways of generating sales and assisting the clients with technical support and customer support matters (Hoover, 2008, p. 45). While the company has money and time to invest in its own call centres, it has opted for streamlined strategy and chosen to outsource these services (Oxelheim & Ghauri, 2008, p. 222).
The NAB has offshore outsourcing strategy where it has given up some of its call centres services to international firms. One of them is the Virgin Mobile, a Canadian company. The company ensures that NAB customers are satisfied, offer services at a cheaper cost, and reduces other related expenses (Oxelheim & Ghauri, 2008, p. 222).
Another company to which NAB has outsourced to is beCongent in the United Kingdom. This company manages the customer contact activities of the bank based on mutual trust relationship. Customers like NAB are benefiting from specialist services and quality hence does not need to employ similar talent on its premises (Oxelheim & Ghauri, 2008, p. 222).
Australia and New Zealand Banking Group Limited (ANZ)
This bank is commonly referred to as ANZ and it is one of the biggest banks operating in Australia and it is currently ranked number four based on its market capitalization. Most of its operations are mainly in Australia where the bank provides commercial and retail banking services as the main services (Hull 2002, p. 5).
The bank is the largest in New Zealand and it is slowly expanding its operations in Asia to about 25 nations. In the year 2008, the bank was named the most suitable bank internationally by the Dow Jones sustainability index and this was the second time in a row that the company was clinching the title (Hull 2002, p. 5).
The bank offers a variety of financial services in its base nations of Australia and new Zealand where it has a customer base of over 4 million customers. These clients are served through over 900 branches and over 1500 ATMs. The bank is seeking to expand to the Asian-pacific area of Hawaii and Indonesia (Hull 2002, p. 5).
For services such as end to end management of the telemarketing service for customer finance cards in support of the operation of the company are sometimes outsourced. There are in-house call centres, sales volume and budgeting service supports in ANZ operations. The main skills include strong customer management, design solutions, predictive dialler management, and running of the telephony.
Reports about ANZ show that it has distinguished itself from competitors for providing greater quality services and branch expansion policy (To & Tri 2002, p. 342). Nonetheless, within this multi-channel delivery mix that has seen it win awards there is a strong and efficient call centre service.
The bank appreciates the sensitive issue of outsourcing or off-shoring call centres and it has set policies of retaining the call centre operations in Australia to serve the domestic markets (To & Tri 2002, p. 342).
One of the important firms is the Firstsource Solutions Limited and it the number one service provider to ANZ. In general the firm has in-house operations for its domestic and outsourced offshore call centres for international market.
WestPac
The bank was known Western Pacific then shortened to Westpac portmanteau and then registered as Westpac Banking Corporation. The bank is often initialized by WBC, ASX and NZX for easy identification and it is among the big four banking institutions in Australia and the second biggest in new Zealand offering a variety of financial services on international context (Merrett, 2002, p. 353).
Subsequent to its amalgamation with St. George in the year 2008, the bank attained a base of 10 million customers. Similarly its branches network increased tremendously to 1200 and more than 28800 ATMs to become the highest in Australia.
The bank is ranked the second largest provider of home lending and wealth platforms by financing under management (Merrett, 2002, p. 353). The bank is also placed position two in terms of its assets as well as the second largest lender to businesses. The company shared the title of the most valuable company in austral with ANZ.
Concerning its call centre services, the company has both in-house and off-shore outsourcing. The bank is very conscious with all factors of its call centre activities including in-house and outsources as well as the inbound and outbound. The company has always sought to understand how the activities are integrated and the ways that it can use to optimize the services (Westpac. 2009, para. 4).
The company also constantly evaluated the impact of a number of models and benchmarks the performance in relation to cost. The firm maintains in-house services for clear track of its services in the domestic market of Australia while employing off-shore outsourcing for international services.
Westpac has opted to outsource some call centres because they provide superior services because of specialization compared to in-house call centres (Kevin & Allan, 2005, p. 231). Furthermore the offshore outsourced call centres could be more efficient due to the use of economies of scale.
AMP Bank
This bank is well described as a banking institution which is also a very prolific wealth management firm headquartered in Sydney Australia. Since its inception in the year 1849, the company has maintained a steady increase of customer base and currently it serves about four million customers (Fung et al 2002, p. 399). The company provides banking services for individuals and conducts other businesses.
For individual clients, services the types of services involved include home loans and savings account. The financial planners at the bank offer advice to clients concerning issues like operating savings accounts, expanding businesses and even starting new ones (Fung et al 2002, p. 399).
The company has two business units, the first unit; Financial AMP banking offers services that concern financial products like planning, income protection, retirement savings and pension among others. The AMP Capital investors section offers services that regard investments like asset management, domestic and international shares and structured equity among others.
The AMP bank has a mixed strategy of call centre services where it employs in-house and offshore services to its clients (Fung et al 2002, p. 399). This outsourcing strategy is uniquely used with regard to the fact that call centre services are very important to the company as they help in profit generation in a significant manner.
Their services are very important for the management and sustainably of the companys brand value and a way to leverage customer satisfaction.
Opportunities for IPScape in these Banks
For several decades now, banks used to regard their call centres as extra cost and all these time, the most important thing was to get the client off the phone very fast. However, times have changed very fast and now the banks in Australia as well as elsewhere in the world are struggling to make the call centres their profit making centres. There are a number of factors that have propelled this change (Li et al, 1998, p. 102).
The first is that banks are realizing that revenues are constantly going down in their branches and elsewhere. Second, there is faster development of technology and this allows banks to engage in operations previously unavailable, banks can up-sell and cross sell because of the new technology (Li et al, 1998, p. 102).
Third, clients are increasingly becoming difficult to access via conventional marketing and this has forced banks to become more aggressive and take advantage of the clients who call in for assistance. Lastly the value of clients service at the call centres is turning out to be a very competitive tool for rivalry among various companies.
The IPScape solution has a broad market with regard to the emerging needs of these banks. The most obvious target has been identified as being the contact centre and the firm has over the recent times focused on this section (Ipscape 2011, para. 2).
It is optimistic to consider call centres as pertinent client touch points and areas of increasing customer service and zeal to sell. However, banks will be taking caution to avoid becoming to channel focused and developing individual objectives that may be cross-purposes from tough multi-channels (Li et al, 1998, p. 107).
There are a number of banks that have been seen to grow and expand gradually and steadily because of good call centre services and they manner I which they treat their clients (Murdoch, 2009, para. 3). Relying on branches alone cannot sustain a bank in the current economic environment.
The call centre services provided by IPScape will act as substitutes for branch banks and as many banks continue outsourcing, IPScape will benefit by having more clients.
The type of technology that IPScape has, it will be able to offer real time decision making service to NAB, ANZ, Westpac, and AMP therefore allowing them to up-sell and cross-sell when clients make calls to the centres (Ipscape 2011, para. 2).
Banks also need telecommunication services but many providers have been reluctant to venture into these fields because the competitors are busy developing new software for better services. The IPScale cloud technology is based on agile, client service intelligence and customer preference (Miller 2008, p. 78). Simply put, the company provides services that the old fashioned competitors cannot offer.
This means their services have greater flexibility; they have faster speed, real-time feedback, immediate scalability and seamless switching from short messages, social media like twitter and email. As IPScape proactively seeks innovative telecommunication and integration of systems in Australia it will be possible to offer quality services to these four banks.
Based on the fact that the company has been proven to work in the United Kingdom in terms of telecommunication services, based on this model and the contacts or the greater region of Asia pacific region (Ipscape 2011, para. 2), IPScape will be a great force in telecommunication business.
There are new technologies being developed under the cloud technology to find new applications. These new applications are able to help the service provider to walk on the floor or tenuously manage customers, view the queue, monitor the calls coming in and train agents (Miller 2008, p. 78).
This software will be very beneficial for specialized services to the banks. With other outbound marketing efforts such as mail and telephone turning out to be less effective, banks are opting for inbound customers calls as better strategy in marketing.
IPScape is a very big company in Australia and it is a great innovator and it spearheads new advancements that are beneficial to the new customer needs. These new advancement will be able to satisfy the global expansion of services and a chance of leveraging experience.
Conclusion
Organisations that seek to outsource their serviced are curious to understand the pros and cost of off-shoring and in-house services so as to make their decisions. In the services of call centre, outsourcing has become cheaper and more efficient because the firms like IPScape solutions specialize in these services and therefore they also benefit from economies of scale and the benefits trickle down to the clients.
The banks therefore access services at a cheaper cost. The use of modern cloud-based technology is a great service that IPScape offers and the four banks mentioned here will benefit from these services as they enjoy contact platform.
Reference List
Fung, J.G., et al. (2002). A Decade Of Internationalization: The Experience Of An Australian Retail Bank, Journal Of International Financial Markets, Institutions And Money, Vol. 12, Issue 4-5, Pp. 399-417.
Hoover, G. 2008. Hoovers Handbook of World Business, Austin, TX: Reference Press.
Hull, L. 2002. Foreign-Owned Banks: Implications For New Zealands Financial Stability. Reserve Bank Of New Zealand Discussion Paper No. DP2002/05.
Ipscape, 2011. Simple, Clever And Fast Customer Contact Technology, Web.
Kevin, H. & Allan, O. 2005. Report Title: Westpac GEM Australia: A Study Of Australian Entrepreneurship In 2004, Swinburne University Of Technology Issue 2005 Series/Report No. 3: Australian Graduate School Of Entrepreneurship Research Series, Vol. 2, No. 1, pp. 231.
Li, D., et al. 1998.Uncertainty Reasoning Based On Cloud Models In Controllers, Computer & Mathematics With Application, Vol. 35, Issue 3, Pp. 99-123.
Merrett, D.T. 2002. The Internationalization of Australian Banks, Journal Of International Financial Markets, Institutions And Money, Vol. 12, Issues 4/5, Pp. 357-377.
Miller, M. 2008. Cloud Computing: Web-Based Applications That Change The Way You Work And Collaborate Online, new York: Que Publishing Company.
Murdoch, S. 2009. Big Four Australian Banks Have Joined The Global Elite . News Limited. The Australian Web.
Oxelheim, L & Ghauri, P.N. 2008. European Union and The Race For Foreign Direct Investment In Europe, New York: Emerald Group Publishing, pp. 222.
To, H.M & Tri, D. 2002. Factors Influencing The Performance Of Foreign-Oened Banks In New Zealand, Journal Of International Financial Markets, Institutions And Money, Vol. 12, Issues 4/5, Pp. 341-357.
Four Factors that Cause Weak Internal Control System
The internal control system in banking refers to one that largely identifies the effectiveness of the organization and minimizes the risks associated with the banks reputation and compliance to the mission. The assessment of internal control systems is necessary to understand how the bank may eliminate the existing challenges on its way to the successful operation. The internal system guideline is proposed by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
The chief executive of ZZ bank points out that the organization presents the appealing incentives and salaries to its employees. However, among the factors, contributing to breakdown in controls, there may be the traders malpractice, the human factor prioritizing personal values over those of the organization.
Another potential factor refers to the integrity and ethical values. In particular, it is necessary to revise the policies regarding the mentioned points and also check awareness of employees about them. The lack of proper communication and integration leads to the disengaged action and misunderstanding. Managements poor operating style and philosophy is one more factor that serves as the indicator of the perspective failure in internal systems control (Baily & Taylor 2014).
In case management cannot provide the open atmosphere to interact with personnel and behaves in a secretive manner, failing to ensure quality, it leads to the internal problems. The fourth factor is the very organizational structure with poor understanding of responsibilities and the lack of proper documentation. Thus, malpractice, the lack of integrity, management style, and the organizational structure are the four factors that may lead to internal control system breakdown.
Disaster Recovery Risk in Banking
The reputation risk and business continuity risk compose disaster recovery risk, the scope of tasks of which is determined by the incidents that can lead to the suspension of the functioning of the entire organization or its key business processes. Their probability is low, ranging from low to medium, yet the damage can be impressive and sometimes causes bankruptcy. Disaster recovery planning can be utilized by the organization to conduct risk analysis and assess their potential impact, then applying the corresponding measures to improve the situation.
However, experts note that the Continuum Planning (BCP) and Disaster Recovery Planning (DRP) techniques do not have time to adapt to the increased demands of the business environment and are working less and less efficiently (Watters 2013). In this regard, many banks are moving to a new methodology for Business Continuity Management (BCM) as more appropriate for achieving the new objectives in operational risk management.
Including all the best achievements of the related disciplines as well as the aspects of process organization and planning, BCM introduces much more detailed procedures for effectively monitoring the implementation of the business continuity process. In addition, the new methodology includes the following key elements: a business continuity strategy, an alternative business strategy, a risk communication strategy, continuous monitoring and risk assessment, regular updating of contingency plans, and the incorporation of continuity elements on the entire infrastructure of the organization.
BCM is a holistic management process that identifies the potential threats to business continuity and provides a conceptual basis for ensuring the sustainability of the business and its ability to respond effectively to emerging negative events (Engemann & Henderson 2012). It is possible to recommend adopting BCM due to its ability to strengthen the focus on individual employees, processes, systems, and products in accordance with the general tendency to increase the so-called granularity of management that refers to increasing the concentration of attention of managers on individual business details.
Reference List
Baily, MN & Taylor, JB 2014, Across the great divide: new perspectives on the financial crisis, Hoover Institution Press, Stanford.
Engemann, KJ & Henderson, DM 2012, Business continuity and risk management: essentials of organizational resilience, FBCI, Brookfield.
Watters, J 2013, Disaster recovery, crisis response, and business continuity, Apress, New York.
First of all, it is known that firms and corporations build management teams in order to make the structure of a company strong enough. The competence of the company is the result of learning and searching for better solutions in this or that situation either in domestic affairs or in the market. In this case, the only enduring source of competitive advantage is the ability to learn (International Studies of Management & Organization, 1999).
Westpac Bank of Australia is a many faceted banking structure, which provides financial services mainly in Western Pacific region and the Australias largest bank by its presence on market and the capitalization volumes. Along with NAB, ANZ, and the Commonwealth Bank it is included in big four banks of Australia. Ten million customers, 1200 branches, more than 2800 ATMs Westpac Corporation was evaluated as the most stable bank in the world for five years. The importance of building control technology (Commercial Case Study) is implemented in the fact that the company is centrally administered. Westpac Banking Corporation has reached further borders in facilitating the management system of its own.
WESTPAC Bank, Australias fourth largest lender, announced a 16% rise in annual net profit to A$2.54 billion ([pounds sterling]1.05 billion) and said it was confident about the outlook despite tougher competition. Revenue jumped 15% to A$18.1 billion (The Evening Standard, 2004).
The bank tries to deal with many global financial formations to provide the policy of experience exchange and meaning the difficult situation on main market platforms under conditions of crisis. The situation is that the Westpac Corporation strengthens the managerial conditions for the branch managers and ordinary ones within seven Western Pacific countries. Westpac group head of retail and business banking Peter Hanlon said the cost of funding customer deposits as well as the cost of wholesale borrowings has risen substantially over the past 18 months (Trading Markets). So the further development of its impact on the Australian economy and on worlds one on the whole is measurable, for it is the largest loaner on the continent.
The beginning of the year 2009 was characterized as the critical time in financial world causing some changes in the global trade and financial segment. The activity of global economy seemed at that moment to be declined. So the governmental intervention helped funds and banks to support main branches of their influence. The size of recession is a predominant solution for the stabilization of two major countries economies, Australia and New Zealand.
There will be two main impacts. Firstly slower loan growth is expected, in part from lower demand for credit but also because both consumers and businesses are expected to use the opportunity of lower interest rates to de-leverage their balance sheets. Secondly, it is expected that more customers will come under pressure as the effects of the slowing activity become more widespread (Media Release, 2009).
To sum up, it is significant to mention that a well-organized work of the corporation management of Westpac Bank of Australia along is still one of the main goals in achieving high-end position in the market share of Western Pacific region. Along with the support of government the corporation is rather strong to prevent the hazards of present economic situation in the world and Australia as well.
Reference List
Media release, 2009. Web.
Westpac Beats off Rivals to Top [pounds Sterling]1bn Profit Mark; The Evening Standard (London, England), 2004.
Lundvall, BA National Business Systems and National Systems of Innovation; International Studies of Management & Organization, Vol. 29, 1999.
Commercial Case Study, Westpac Bank Australia. Web.
Corporate governance is at the core of how companies are managed. This is true because corporate governance statements essentially outline the rules, procedures, and laws of how companies operate or should be managed (National Australia Bank Limited 2011, p. 1). Corporate governance also determines the way various company shareholders operate and how they should interact with each other (National Australia Bank Limited, 2010).
In recent decades, there has been a renewed concern over the concept of corporate governance, especially because there has been an eminent collapse of some of the biggest corporations across the globe due to poor corporate governance (such as the case evidenced with Exxon Mobil).
This is to say that corporate governance requirements differ from company to company and from a broader perspective, the success or failure of a given company differs with the corporate governance statement of the company.
To gain a better understanding of the differences and importance of corporate governance statements in the running of companies, this study will analyze two Australian companies, namely BHP Billiton and National Australia Bank.
The two companies are among Australias top ten largest companies (according to Forbes magazine), but both companies operate in very different economic sectors (Hitipeuw 2011, p. 1).
Description of the Companies
BHP Billiton is officially based in Melbourne Australia (its management is however, based in Britain) and it essentially engages in mining activities alongside the production of petroleum. BHP Billiton is not only one of Australias largest companies, it is said that the company is the largest mining company in the world (according to February 2011 rankings) (Hitipeuw 2011, p. 1).
Australian National Bank, on the other hand, operates in the banking sector and it is one of Australias largest banks (Scott 2009). The banks operations are of a global nature and it is estimated that it serves more than eight million customers around the globe. In fact, according to recent global rankings, the bank is estimated to be among the worlds top 20 largest banking institutions (Scott 2009).
Compliance to ASX Guidelines
BHP Billiton and National bank of Australia are in compliance with ASXs regulations that the board of directors should be independent from the running of the companys operations. In other words, ASX regulations outline that the companies should have a board of directors that does not have direct interests on the company and which is independent of the management (ASX 2011, p. 1).
National Bank of Australias corporate governance statement complies with this provision by observing that its board of directors makes independent decisions during board deliberations so that the interests of the company are not compromised by personal objectives. This provision is outlined in the corporate governance statement (cited in BHP Billiton 2011) that:
An independent director must be independent of management and able to exercise unfettered and independent judgment, free of any business or other relationship that could materially interfere with the exercise of the directors ability to act in the best interests of the Company (p. 2).
BHP Billiton also has the same provision as can be seen in the appointment of its directors because of its 13 directors; twelve are nonexecutive and independent of management (BHP Billiton 2011). The same concern (evidenced in National bank of Australia) of a compromise of the board of directors by the companys management is also registered at BHP Billiton when upholding this requirement.
The companys stand on the independence of directors is clearly outlined in the companys corporate statement that The board considers that an appropriate balance between executive and nonexecutive directors is necessary to promote shareholder interests and to govern the business effectively. It is committed to ensuring a majority of directors are independent (p. 4).
Another area of compliance that both companies uphold (with regards to ASX guidelines) is the public disclosure of remuneration policies and risk management strategies. This provision is observed through the remuneration committee (in the case of National bank of Australia) and through the remuneration report (in the case of BHP Billiton).
In the case of BHP Billiton, the remuneration reports encompasses details pertaining to the share prices, remuneration policy and structure, aggregate directors remuneration, group performance, earnings performance, and group management committee details (BHP Billiton 2011).
The National Bank of Australia also discloses more or less the same information because in its remuneration structure, details pertaining to the companys group remuneration structure, remuneration paid to board members, remuneration paid to top executives and existing remuneration policies and strategies are also included in their remuneration report (Australian National Bank 2011).
Similarities in Corporate Guidelines
BHP Billitons management and organizational practices are firmly embedded in the principles of ethics and integrity; an attribute which is quite similar to Australia National Banks principles. At National Bank of Australia, corporate responsibility essentially encompasses the behaviors, beliefs and core values of the organization and these principles collectively outlines the overall purpose of the organizations members.
The organization, therefore, believes that the manner in which it undertakes its corporate responsibilities is equally important to the final product of their organizational output (Australian National Bank 2011).
The same view (of corporate responsibility) is also shared by BHP Billiton in the sense that the organization strives to attain its corporate objective by upholding ethical standards, corporate integrity and a high respect for other stakeholders in the organization.
In the same manner, Australia National Bank believes that how it carries out its operations is as important as its organizational output; BHP Billiton also believes that how it undertakes its corporate obligations is important in maximizing its shareholder values (BHP Billiton 2011).
What the organizations stakeholders should expect of the company with regards to how it undertakes its obligations is clearly outlined in the companys business code of conduct.
Also, through an analysis of both BHPs and Australia National Banks corporate statements, we see that both companies value the contribution of their shareholders through the shareholder engagement (for BHP Billiton) and communication with shareholder strategy (for Australia National Bank).
At BHP Billiton, the management sets regular shareholder briefings (annually) where shareholders are encouraged to share their views with management on how best to improve the company.
To make sure the views expressed by the shareholders are factored into how the company is managed, the companys management has a duty of communicating the shareholders resolutions to the directors for action.
Communication is, however, extended to the companys website incase there are pending matters of concern which cannot be concluded from the physical annual meetings, scheduled on October or November of each year (BHP Billiton 2011).
Shareholder communication at Australia National Bank is done in more or less the same way, considering shareholders often meet with management through annual general meetings and often, the resolutions passed in such forums are communicated to shareholders through corporate publications, letters and the likes (Australian National Bank 2011).
The kind of group disclosure adopted by the company is that of utmost transparency because all shareholders are supplied with timely and freely accessible corporate information.
Evaluation of Corporate Governance Statements
BHP Billitons corporate governance structure is quite conducive for the global nature of the company and for the context in which the company is operating in. This is true because the companys corporate governance guidelines is in conformance to corporate practices outlined in Australian and Britains corporate circles where the company primarily operates.
To back-up these claims, it is essential to note that the companys corporate governance statement ensures the communication of timely information to its shareholders (through its annual general meetings and website communication). Basically, the information communicated in this manner includes data relating to the companys profitability/loss, corporate debt, cash reserves and such like statistics (Jie 2010).
The level of transparency that the company uses in communicating such information is a plus for the companys corporate governance document because it is transparent and timely. This is one of the strengths of the companys corporate governance statement.
As mentioned earlier in this study, the shareholder communication strategy of Australias national bank bears close similarity to BHP Billitons and therefore, the above strength observed in BHPs corporate governance documents is also shared by Australia National Bank.
The strength is especially manifested through the transparency in shareholder communication that Australia National Bank upholds. This strength can be represented through a segment of the companys corporate governance document (cited in Australian National Bank 2011), which states that The Group aims to be open and transparent with all stakeholders, including the owners of the business the shareholders.
Information is communicated to shareholders regularly through a range of forums and publications (p. 6). To show the transparency adopted by the company with regards to shareholder communication, the companys corporate document further states that The Group is committed to maintaining a level of disclosure that provides all investors with timely and equal access to information (Australian National Bank 2011, p. 6).
Since Australia National Banks provisions of proper corporate practice and an upheaval of ethical standards seek to maximize shareholder value and in the same manner, BHPs upheaval of ethical standards seeks to maximize the companys shareholder value; it means that both corporate governance statements strictly uphold the rights and interests of the shareholders which is at the very core of both companies existence.
This regulation also means that both companies are likely to refrain from engaging in short-term profit-making ventures that may not necessarily be done with the interests of the shareholders at heart. Such sort of actions will, therefore, be avoided because they are likely to affect shareholder interests in the wrong way.
The manner of appointment of directors for both companies is also quite transparent as can be evidenced from an excerpt of Australian National Banks corporate guideline (cited in Australian National Bank 2011) which says that:
The process for appointing a director is that, when a vacancy exists, the Nomination Committee identifies candidates with the appropriate expertise and experience, using external consultants as appropriate. The most suitable candidate is appointed by the board but must stand for election by shareholders at the next annual general meeting of the Company (p. 3).
With such recruitment guidelines in effect, competent and qualified personnel are likely to be recruited by the board and therefore, the company is likely to benefit from skills and expertise of highly qualified individuals. This initiative is also centered on maximizing the shareholder value and therefore, such a provision in both companies corporate governance statement is a plus for both companies as well.
The fact that both companies uphold the independence of their directors in their corporate governance statements is a plus for both companies meaning that even though the interests of the companies shareholders is at the very centre of the companys existence, the board of directors can still be able to act independent of the shareholders or managements interests.
Consequently, this means that both organizations can be steered in the right direction without compromise from any wing of the companys stakeholders.
How the Corporate Governance Statements Can Be Improved
Since fraud cannot be totally eliminated, no matter how airtight a companys corporate governance statement may be, it is important for BHPs Billiton to have a whistle-blowing provision in its corporate governance statement which seeks to protect whistle-blowers.
This provision is however, contained in Australia National Banks corporate statement, where there is a secure channel through which people can report instances of fraud or corruption in the company.
Moreover, BHP Billitons workforce guidelines does not essentially embrace the diversity expected of present-day international organizations, considering its corporate statement only envisions the utmost fulfillment of worker needs. Little reference is therefore made of how the company should deal with the issue of employee diversity.
A provision on how companies should deal with Employee diversity is essential for BHP Billitons corporate governance statement because it undertakes very extensive operations across the globe and therefore its workforce is likely to be characterized by a very diverse workforce.
The embracement of a diverse workforce is essential for the reduction of employee turnover and for the increase of innovation in the workplace. These recommendations are incorporated in Australia National Banks corporate governance statement.
Conclusion
This study identifies that the corporate governance statements of Australia National Bank and BHP Billiton are in order and conform to the laid down stipulations of ASX corporate governance guidelines (with regards to corporate communications and directors independence).
However, we establish that BHPs corporate governance document is inferior to Australian National Banks in the sense that it lacks a whistle-blowing and employee diversity provisions, which are essential for a company of its nature. These are the areas identified to warrant improvement of the corporate governance document.
Today the internet is largely used in facilitating many business transactions. The development in information technology has enabled the digitization of many operations and therefore, many transactions are conducted online. Among them are online shopping and online banking.
This has led to the elimination of the need for human interaction in conducting service transactions. Although the internet has greatly enhanced business processes and made them more efficient, it has serious implications and cannot be fully trusted in conducting business transactions. This paper explores the social, ethical, cultural and legal implications of online banking and online shopping.
Online Banking
Online banking involves conducting of financial transactions by customers via the internet. This enables them to avoid the time-consuming and costly processes of interacting with tellers and conducting paper transactions. A customer opens an account that is managed online and can be accessed through a username and a password. The account holder can conduct all the normal banking transactions from home such as paying bills and money transfer, provided he/she has access to the internet (Tucci 2011).
Many large companies are coming up with online banks mostly because they have low costs compared to traditional banks. This is because unlike traditional banks, online banks do not incur the costs of hiring tellers, renting premises, and the costs that arise as a result of the daily running of the bank.
As a result of this, online banks may offer higher interest rates or free conducting of transactions such as checking the account balance, and such benefits may attract many customers. Online banking has various other benefits. It is convenient since the banking websites are available all the time, for 24 hours each day, and conducting the transactions is very fast.
The customers do not have to make long queues as they wait to conduct their transactions as in traditional banks. Instead, they just log into the account and perform the transactions quickly. Moreover, the online banks can be accessed from anywhere in the world. In addition, one website can be used to manage all the customers bank accounts (Tucci 2011).
Nevertheless, online banking has several shortcomings. The customers must have ICT skills and it may take time to learn how to use the banking sites. In addition, these online banks do not have automated teller machines and withdrawing the money from the ATMs of other banks can cost a lot of money.
Moreover, when the internet is down, it is not possible to access the bank account. In addition, many people find it hard to trust online banking because of security and privacy concerns. People are afraid that they might lose their money to hackers who might get hold of the account details such as the username and the password. They are also concerned that their personal information may be recorded and used for other purposes (Fraser, Fraser and McDonald 2000).
Online Shopping
Online shopping is the purchase of goods or services via the internet. The customers mostly make payments through credit cards or debit cards. The goods or services are then delivered through shipping, downloading or printing out. The customers log into online shopping websites and view the pictures and read descriptions of the products. Once they identify the goods that they want to purchase, they order for them (Horrigan 2008).
Online shopping has several advantages. Firstly, it is convenient since it can be done at any time and place, and all one needs is access to the internet. Traditional shopping requires one to travel long distances to reach the shop and also the customers can only access the stores during business hours. Online shopping sites also provide all the details and features of the products or services and other information such as instructions for use and customer reviews.
Therefore, the customer is able to make an informed choice for the product or service. Online shopping also allows customers to easily compare the prices and features of the goods or services from various stores and therefore choose the most suitable for them. They can also get to choose sites that offer certain benefits such as free shipping of goods (Haugtvedt, Machleit and Yalch 2005).
However, online shopping has disadvantages. The consumers face the risk of fraud, getting faulty products or services and other security concerns such as identity theft and phishing, among others. Phishing involves the soliciting of personal information such as credit card information, username or password by a spam mail.
In identity theft, an individual steals another persons personal information and uses it to buy goods or obtain credit. It is also not easy to differentiate between fraud websites and genuine ones. Fraud websites receive money and fail to deliver the products and may even disappear, and it is hard to track them. Most online shopping sites also do not disclose the total cost of the transaction including the cost of shipping, sales tax and duties, among others.
Therefore, the customer is forced to pay additional costs which he/she knew nothing about. In online shopping, the customer does not get to see and test the product before purchasing it but relies on the pictures and description given on the website.
Therefore, there is no guarantee of the quality of the product because the actual product may be different from the description given on the website. Another disadvantage of online shopping is that the merchants may use the personal information of the customers for other purposes like telemarketing. Therefore, customer privacy is not guaranteed (Fraser, Fraser and McDonald 2000).
Implications of Online Transactions
Online transactions have become very popular with customers and a lot of money is transferred every day through the internet. As money is transferred, there are many swindlers hanging around trying to get an opportunity to steal it. Both online banking and online shopping involve conducting of transactions via the internet.
Despite the numerous benefits of online transactions, they cannot be fully trusted. The greatest concern for the consumers is online transaction security. Online transactions encourage the use of credit cards to make payments. The customers are not comfortable releasing sensitive information such as credit card details on the internet.
Their concerns are justified since internet crime is on the rise and without proper security measures, they can lose their money. Customers can ensure the security of their transactions through using passwords that combine both small and capital letters, numbers and symbols, and also changing the passwords regularly to make it difficult for hackers to decipher them.
Consumers should also ensure that they use secure websites to transact their businesses. However, even with these precautions, online transactions cannot be fully trusted as the hackers are always devising new ways to access the private information of customers (Bradley 2006).
Online shopping and online banking have various legal, ethical, social and cultural implications. Online banking services are governed by the Electronic Funds Transfer Act of 1978 in order to protect online bankers. One of the legal challenges of electronic transactions is determining their validity.
One cannot be absolutely sure that the electronic signatures are reliable. Moreover, some websites do not make the terms and conditions of the transaction known to the users and therefore, they enter into an agreement without full knowledge about the risks involved and whether the website is in compliance with the current law (Caudill and Murphy 2000).
Consumer privacy right is a legal requirement that should be respected. During online transactions, customers are required to give their personal information and are concerned about the security and privacy of such information. Purchasing products using credit cards can avail personal information to telemarketers, market researchers and direct-mail companies, therefore leading to the invasion of privacy.
Customers should be made to understand the privacy procedures and policies in place to ensure that their personal information is not disclosed to unauthorized parties or used for other purposes. Some traders use the customers personal information for telemarketing or sell it to other agencies. The Data Protection Act of 1998 ensures that the personal information of customers is kept secure (Chung 2007).
There are also ethical issues that arise in the conduct of online transactions. Though online transactions are convenient and fast, the internet has created an environment for the advancement of unethical behaviour. The ethical implications of online banking and online shopping include the privacy of consumer information, the reliability of the transactions, and security. Information that is sent over the internet passes through very many computer systems and these computers may monitor, capture, and store such information.
The activities of online shoppers can be monitored without their knowledge or consent. When online shoppers register for the purchase of certain products or services, their identities and personal information can be captured and used for other purposes. It is unethical for the personal information of customers to be used for other purposes or divulged to other parties (Sembok 2003).
Commercial sites can get information that consumers give to a shopping site and use it to market their products and services. These companies then start sending emails to the consumers without their consent. Internet cookies also gather customer information secretly. Cookies are files that identify the web browser software of the user and tracks down his/ her visits to that site. Marketers are also using Web bugs to monitor the online activities of users. This is absolutely unethical (Nardal and Sahin 2011).
Another ethical concern is reliability of the online transactions. Deceptive practices such as fraud are unethical and reduce the customers trust in online shopping and banking. Consumers are also concerned about the security of the transactions. They need to know that their payments are safe and that their banking information is not stolen, leaked or given to any other party (Caudill and Murphy 2000).
Online shopping and online banking also have social implications. Conducting transactions online has greatly changed the social behaviour of consumers as people can do it in the comfort of their homes. Therefore, people no longer go out as often as they used to. Consequently, they do not get to interact with others. Face-to-face communication has reduced and people communicate through the internet.
Online shopping can also lead to buying addictions, impulse buying, and compulsive buying. Impulse buying is purchasing products that were unplanned for. Compulsive buying takes over the lives of the shoppers and preoccupies them completely. Online shopping is only a click away and therefore people may be unable to control their shopping habits. With the access to the internet to almost everyone for 24hours each day, these habits can develop and cause problems like overspending, bankruptcy, and broken families (LaRose 2001).
Online banking and online purchasing also have cultural implications. They have changed peoples way of life. Most transactions can now be conducted online without having to visit banks or shopping malls. Individuals lives have been made easier and more convenient due to the development in information technology. However, people are spending a lot of time accessing the internet. Physical interactions have reduced and people mostly relate over the internet (Chung 2007).
Conclusion
From the above discussion, it is evident that the development in information technology has had a significant impact on the business processes of many organizations. Many operations have been digitized and banking and shopping can be done online. However, online transactions have many shortcomings and cannot be trusted.
Therefore, even though information technology has helped to streamline most business operations and made them more effective, the risks that come with it are too many and cannot be ignored. The traditional way of conducting transactions is more reliable and customers need to be extremely cautious when conducting online transactions. Consumers need to weigh both the benefits and risks involved before conducting online transactions.
Reference List
Bradley, T., 2006. Essential Computer Security: Everyones Guide to E-Mail, Internet, And Wireless Security. New York, Syngress.
Caudill, E. M. and Murphy, P. E., 2000. Consumer Online Privacy: Legal and Ethical Issues. Journal of Public Policy and Marketing. Vol.19, No. 1.
Chung, I., 2007. Roles and Impacts of IT on new Social Norms, Ethical Values and Legal Frameworks in Shaping a Future Digital Society. Web.
Fraser, J., Fraser, N. and McDonald, F., 2000. The Strategic Challenge of Electronic Commerce. Supply Chain Management: An International Journal, Vol. 5, No.1, pp.7-14.
Haugtvedt, C.P., Machleit, K.A. and Yalch, R., 2005. Online Consumer Psychology: Understanding and Influencing Consumer Behaviour in the Virtual World. USA, Routledge.
Technology Issues with Bank Solutions International
One of the primary Issues for the Bank Solutions International was substandard software system. The business market requires a robust and updated software system and secures storage and processing units, this is an obstacle to the growth of the company.
The technological skill was not adequate to fully test the DRBCPs facilities within the company.
Customization of four item processing facilities is yet to be done.
All the critical plan employees have never been trained to control and manage the technological advancement of the DRBCPs.
Bank Solutions lacked the technology to manage security challenges and also document forensic samples as evidence.
The security logging system was not properly coded in order to control the plan participants and monitor their work carefully.
Gross redundancies within the network Architect of Bank Solutions International.
The backup facilities of the DRBCPs were not assigned to any specific responsibility.
Noticeable failure within one item processing facility. The backup processing facilities were no longer operational.
The storage facilities for the backup tapes were unsecured. This is a major risk to vital information and transactions of the company. These are some of the technological challenges that were analyzed in the case study.
Risk Assessment
The assessment of the management team in the case study assessed working conditions of the company. It concluded that the risk and challenges facing the company contributed the poor growth of the company. Some of these risks include
The company did not have an updated software system and could not compete with similar companies in the business. This hindered the collection of data and the proper management of information.
The plan participants that were not trained to understand the technology of the DRBCPs could not handle the daily challenges within the bank. Some of these challenges would have to be solved using external sources thereby reducing the satisfaction of the customer.
The facilities at the processing unit were redundant and poorly managed and this contributed to the slow operations of the bank.
The backup system were not operational, this reduced the efficiency of the company. The data gathered during transaction hours would be lost and this would be a serious challenge for the management.
The quality of the decisions taken by the management would not be current because the information processing unit is not updated regularly. Thus, decisions would be taken based on assumptions and that would be a fatal error for the company.
The routine failures of the item processing unit would result in system failures and transaction errors. The expansion of the company would be reduced; this is because the company would not meet up with the competition from other service providers that deliver banking services to clients (Schneier, 2000).
The storage facility is a major challenge for the company. The data collected are either stored by the workers or submitted to other storage companies. The resultant effect of this situation is that the files are no longer confidential and client confidentiality would be compromised.
The management team would have to audit all the staffs of the company and have a secured information storage system that would not be tempered even by the workers themselves. This can be a setback when the workers have access to files that may be used to commit fraud.
Another risk within the company is that of information transfer, the transfers are made through unsecured channels and are not carried out on a daily basis.
Solutions to the security challenges and risk in the Case study
In order to maintain a standard security system in the company the entire software systems would be updated to meet up with the global trend. Such update would be carried out on a regular basis. Consequently, the job description of the plan participants would be specific and this would reduce the challenges within daily transactions (Slovic, 2000).
Training of information staff and personnel would be done on a quarterly basis and this would reduce the effect of outdated approach to problem solving. The financial market and banking requires that personnel are skilled and properly trained. This is a vital process in data management.
The company data center disaster recovery business continuity plan should be reviewed periodically. This would reduce the effect of redundancies from the item processing units. This would reduce the risk associated with data loss. It would also increase client base of the company, since it would be a competitive advantage for the company. The company should be able to manage these risks when they occur, such information systems are critical to the growth and success of the company.
Penalties would be placed on defaulting personnel within the company, this would check the unnecessary insubordination and careless attitude among the workers at all levels. Defaulting staff can be demoted or transferred to a different department. Consequently, hard work should be rewarded at the end of any business year; this would support the staff and boost individual productivity.
The use of contract off-site storage facilities would be discouraged. This is critical in securing clients trust and confidence. The company should seek other ways to expand the storage facilities within the bank. The objective for expansion of the organization is to secure more clients and expand services to other regions. This would be achieved when the company provides an adequate storage facility for processing and preserving information received during any business transaction.
The use of qualified staffs in the storage facilities is a vital task for the managers of the company. This would influence the proper maintenance of the units and a regular update of transaction logs (Slovic, 2000).
Recommendations regarding the security risks and challenges
In view of the factors that would mitigate the risk and challenges case study, there are some recommendations that would require urgent implementation.
A documented study would be carried out in the bank to ascertain the kind of data transferred to the bank and the proper means required to protect and preserve the data.
The location of the data collected must be placed in a secured storage facility and should be moved to different locations are various intervals.
A strategic privacy policy plan would be implemented. This would motivate your clients because of the pledge to provide adequate service.
The data collected should be stored in layers; the access to confidential files would be restricted. This would guard against technical fraud by the participants of the plan.
Adequate arrangements should be made in the event of data loss from the storage facilities. Such contingency plans would require that the data should be distributed to different locations for safe keeping and the software system is updated on a regular interval.
The employees in the company would be trained to understand cyber security rules. They would reduce the risk attributed to unskilled workers.
Another vital recommendation is the need for security awareness within the manufacturers of various cyber security systems. The engineers would be required to be updated with relative trends within a cyber-security transaction (Shari, 2012).
Finally, training of information staff and personnel would be done on a quarterly basis and this would reduce the effect of outdated approach to problem solving. The financial market and banking requires that personnel are skilled and properly trained. This is a vital process in data management. The recommendations are subject to change and would require updated information to carry out this function. The use of company staffs to secure files should be stopped. This is a major security risk for the company. Confidential files are meant to be stored in secured locations that would not be compromised. All the processing units must be maintained at all times and data should be transferred after each transaction to avoid loss or damage. The company data center disaster recovery business continuity plan should be reviewed periodically. This would reduce the effect of redundancies from the item processing units. This would reduce the risk associated with data loss. It would also increase client base of the company, since it would be a competitive advantage for the company. These recommendations should be utilized for efficient management of the company and the growth of the business.
Island Banking Services is a non-US firm that works in the Financial Transactions Processing, Reserve, and Clearinghouse Activities industry, which has the NAICS 2017 code 522320. Financial transaction processing, financial instrument clearinghouse services, and reserve and liquidity services are all provided by companies in this industry. On the island, the firm has a customer care center and three branch locations, although the bulk of its clients deposit and withdraw cash via electronic funds transfers, internet banking, and credit/debit cards.
Agenda
The presentation begins with a general summary of the merger & acquisition deal and its background. It dives into the introduction of the cybersecurity strategys main standalone points and goals, ranging from prevention and identification to the response to emerging threats. It then proceeds to cover the implementation plan, barriers to success, and general recommendations.
M&A overview
In M&A deals the suggesting company is generally in the position of greater market power and influence. Due to the Island Banking Services bankruptcy and criminal history, the M&A with Pagett-Beale Solutions is a second chance for them. Yet the Padgett-Beale Solutions has a power advantage and therefore can influence the strategies of Island Banking Services, especially in the information department.
Failed companies possess the financial potential for M&A deals in cases when their structure or organizational approaches might quickly end up efficiently utilized for profit. This particular deal specifies the inclusion of operating systems, software, and other IT goods in the deal. Therefore it is reasonable to assume, that the merger company is interested in the merged companys IT resources.
The Chief Information Security Officer, often known as the CISO, is the ultimate guardian of data privacy inside a company. Theyre in charge of developing and managing the cyber dangers that come with everyday operations, as well as supporting a secure environment and preserving existing data from data theft. Risk and compliance management, technical operations, and vendor communication are the three major functions of the job.
Padgett-Beale, Inc. is a joint venture company that works in the hotel, restaurant, and resort business. An insider working at the Property Holdings and Development station was responsible for intellectual property theft. He was an integral part of the Future Plans Committees team. After this member quit and joined a rival in the Recreational Vehicle Park region, the Property Holdings and Development office head felt something suspicious was going on. After further investigation, he discovered log files on the insiders corporate laptop. A huge number of large data were taken from the companys servers and transferred to this insiders cloud account.
The digital assets and records of Island Banking Services were bought from the bankruptcy courts by Padgett-Beale, Inc. Licenses for office productivity software, financial transaction processing software, database software, and desktop and server operating systems are among these assets. The gear, software, and license necessary to run the companys internal computer networks are also included in the transaction. Padgett-legal Beales counsel was successful in negotiating the return of copies of the businesss documents with the bankruptcy court and the criminal courts, allowing the company to resume operations.
Goals
The goal-setting in the cybersecurity strategical plan lies in the balance between the general requirements of an efficient cybersecurity system and a set of specific characteristics of a particular firm. The characteristics can be categorized into capacity-related and mission-related. (Camillo, 2018) The first group can be addressed by modernization of the equipment, whereas the second concerns the aspects of internal change management and the general purpose of the business in question. Thus most of the goals discussed in this presentation can be adapted accordingly to the needs of the firm.
Cybersecurity strategy 1: overview
At the overview stage of the cybersecurity strategy, it is worth considering the industry differences between the two M&A firms. The company that specializes in hotel and resort management is unlikely to be equipped to deal with the cyber threats of the investment bank on technical and human levels. However, as the number of cyber attacks against hotels has increased in recent years, it is reasonable to assume that the relevant IT department possesses the basics of cyber security knowledge.
Cybersecurity strategy 2 adopt data principles
Organizations have shown an increased readiness to engage in threat intelligence sharing platforms in recent years. The rising need for companies to protect themselves against todays sophisticated cyber attacks has led to an open sharing of information and expertise on threats, vulnerabilities, events, and mitigation measures. (Catota, Morgan &Sicker, 2018)
While addressing the threats and protecting the existing data, professionals must ensure the data itself is up to due quality. Poorly sourced data is often used by the ransomware enthusiast to bypass the victims suspension of disbelief
Focuses on the development of functioning communication channels within the IT department and between the IT department and the remaining company to avoid conflicts of interest and align the general corporate vision
Cybersecurity strategy 4 incorporate data stewardship
Focuses on establishing a new culture of relationship with data within the organization, based on accountability and resourcefulness.
Cybersecurity strategy 5 Establish a proactive posture against cyber attacks
Focuses on the protection of the most mission-critical and operation-critical data sets, also commonly referred to as crown jewels.
Cybersecurity strategy 6 Enhance measures to limit the impact of a potential cyber security incident
Focuses on the assumption that no matter the amount and intensity of preparation, the accidents are bound to occur. With this in mind, the Bank must be ready to respond appropriately and meet the interests of its various stakeholders
Cybersecurity strategy 7: Build resilience to recover from a cyber event
Focuses on investing in functioning recovery mechanisms, both in terms of restoring the damage to the computer systems and dealing with the data loss and potential financial consequences
Cybersecurity strategy implementation plan: adopt a proactive position
Greater levels of trust lead to a greater likelihood of a client reporting the error or violation they have encountered while using the banks online services
Barriers to success
Cybersecurity barriers to practice are becoming relatively low with the digitalization of commerce affecting the number of clients in the industry. However, the financial resources of any company are finite, and cybersecurity is by far an expensive experience due to the industrys digital online nature. Furthermore, the human error factors and faulty organizational management employees complicate the research even further.
Summary of strategy goals
Strong cyber security has been a point of emphasis in modern financial institutions, often essential to secure a customers trust. Investing in the development of better cyber security is a profitable choice since it is a form of re-investing into the company while attracting new customers.
Overall
But most importantly, the company must understand the importance cybersecurity possesses for them right now. Due to the CEOs arrest, the firm needs restoring the reputation even under the mergers protection.
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