Thesis on "MIS of Bank Industry"

Thesis 4 pages (1282 words) Sources: 0

[EXCERPT] . . . .

MIS in Banking

Automating key processes that provide immediate benefit to customers while also significantly reducing operating expenses is one of the most effective Management Information Systems (MIS) strategies there are in the American banking industry. The use of Web-based technologies specifically is delivering higher revenue, greater customer satisfaction and lower costs, resulting in higher Return on Investment (ROI). The intent of this analysis is to evaluate the three recommendations of monitoring clicks for online banking, enabling automatic transfer of money from savings to checking accounts, and support of transfers between different bank accounts from different banks. The impact on revenues, fixed and variable costs, the initial investment required, training considerations and implementation schedule will all be analyzed. In addition the implications for customer acquisition, customer retention, and customer satisfaction will also all be assessed.

Assessing Recommendation Costs and Benefits

The first recommendation of monitoring clicks in online banking has a spectrum of potential solutions, with Google Analytics being free for use and advanced, enterprise-wide Web-based analytics applications including Omniture and SAS have licensing and usage frees associated with them. The recommendation states that online banking will be used as a means for better understanding the needs of customers so incremental services can be produced. In addition the goal of creating more efficient customer service strategies is a consideration in the defining this recommendation. It is recommended that Google Analytics be chosen for this specific first recommendation due to its cost and its flexibility in capturing the customer data of interest. The second recommendation of being able to manage automatic transfers of money from savings to checking accounts within the same bank can be accomplished through a variety of approaches. From the low-end of creating an adapter or connector to integrate systems internally to accomplish this will cost $40,000 to $50,000 and have minimal costs with maintenance. At the upper end of the potential technological solution for this recommendation, the development of an Enterprise Application Integration (EAI) layer to integrate all systems together would be close to $1.5M to $2M. The costs are exceptionally high yet the system-wide integration would open up entirely new approaches to managing data and creating services for customers. As costs are a consideration, it is recommended that an adapter or connector is created internally by the MIS and IT teams to ensure that there is support for its capability while keeping costs at a minimum. The third recommendation of being able to transfer between different bank accounts from different banks also has a spectrum of potential solutions. From the low-end where an XML integration adapter or connector could be created to support interbank transfers securely to the development of an Electronic Data Interchange (EDI) over the Internet, interbank integration can become exceptionally expensive to implement and manage. An XML adapter or connector will typically cost around $50,000 to $75,000 depending on its complexity. At the high end with an EDI link over the Internet, costs can easily approach $225, 000 to $300,000 as there are dedicated EDI links that must be leased from $75,000 to $100,000 a year alone. It is recommended that XML links be defined and managed between banks where shared customers have the majority of their accounts. This type of alliance is common in the banking industry and is also making XML-based interbank networks more common. This is a direct result of the costs of EDI networks of the Internet continually increasing in cost.

Recommendations' Impact on Costs, Investment, Training and Customer Strategies

The first recommendation of enabling the monitoring of clicks in online banking to gain greater insights into new services for customers while also augmenting and strengthening customer service will have a long-term effect on revenue of minimizing customer churn, or the incremental costs associated with customers leaving the bank. Using click monitoring and applying Web analytics to the data will… READ MORE

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