Australian Banking Industry

Question: Discuss about theAustralian Banking Industry. Answer: Introduction The retail banking industry takes a significant share of the Australian economy. The country has several big banks stiffly competing each thus offering satisfying services to its large population. Three banks have been selected to help show the exact position of the Australian banking industry. These banks include Commonwealth Bank of Australia, National Australia Bank and Bank of South Australia. The banking industry has undergone transformation based on demographic profiles (Joseph, McClure and Joseph 2009). Essential demographic profiles include experts viewed as a high-value customer due to their multiple potential products holding, age-based segmentation (youth, over 50 and others), lifestyle (graduates, retirees or first home buyers) with a distinct profile of financial motivation and banking needs. Graduates are more probably than average to save for travel, a house deposit as well as car and this suggests that this segment may require a credit card, personal or car loan, home loan, and associated insurance policies shortly (Sathye 2009). The segmentation of the banking industry is being shifted from the product-oriented segments to customer-focused segments. This shift in segmentation has been employed by the three banks. The shift in segmentation follows the realization that customer needs and expectations are changing as fast as the competitive landscape. Statistics indicates the Australian banking industry is taking the lead over other nations as shown below based on percentage of GDP share. Rank Nation Bank share of DGP % 1 Australia 2.9 2 China 2.8 3 Sweden 2.6 4 Canada 2.3 5 Netherlands 1.9 6 Spain 1.8 7 France 1.7 8 Japan 1.4 9 United States 1.2 10 UK 0.9 Winning, retaining as well as deepening customer relationships requires this shift in segmentation. The three banks are currently adopting the trend of lifestyle-based segmentation which avails a 360-degree perception on customer values as it accounts for multiple product holdings and likely future product holdings. Thus, banks can better comprehend both true values of their customers alongside their needs besides likely future behavior. The banks that leverage this idea have a better anticipation of the needs of the customer and can develop customized products as well as services for cross-selling maximization and eventually deepen their customer relationships. The retail banking is profitable particularly through the lifestyle-based segment, and the three backs have continually grown in the banking industry. These banks have persistently become attractive to this segment and other investors who need funds for various investments. Process Approach Model The Process Approach Model is critical in the identification of how banking industry segment business classified as either internal or external processes as well as how such categorization enhance the efficiency and effectiveness of these three banks selected. It is clear from the diagram that process approach used by banks starts from the needs identification to the process through satisfaction. To explain this, we take start by the realization that segmentation should shift from product to customer based on the fundamental need in the industry and narrow this need down to segmentation based on lifestyle. This need then enters the process stage which requires activity 1 to 3 to be performed to categorize it as either internal or external process. Taking the route of activity 1, banks have to undertake three tasks (1, 2 and 3) to categorize this need as an internal or external process. Assuming that task 1 is selected, three operations will be performed to categorize this as an external or internal process. To sum up, shifting the segmentation from product-based to customer-based will be categorized as internal process since it is within the control of a particular bank to choose how it segments the market. Thus, this categorization enhances the efficiency and effectiveness of banks by identifying the particular activity, task, and operation that help serve their customers best based on the identified needs. Supply Chain Systems, Initiatives and Management in the Industry Segment The three banks individually take a keen interest in ensuring effective supply chain systems, initiatives as well as management are in place to meet the demands of the retail banking industry in Australia to serve the lifestyle-based segment satisfactorily. For example, Bank of South Australia has deepened understanding of sustainability by extending its commitment to a wider array of stakeholders as well as interest through effective supply chain initiatives, systems as well as management. The National Australia Bank has distinct itself through the belief in the potential of communities, clients as well as employees which are a source inspirational to the bank to use effective supply chain systems, management as well as initiatives that have a positive impact on its clients as well as communities being served (Sathye 2011). These systems underpin a firm as well as sustainable business for its shareholders. For example, the banks Procurement Policy and Outsourcing Standard remains the global reference point for its procurement practices that articulate its approach to the sourcing and procurement. The bank puts all its supply contracts out tender and uses a pre-determined evaluation matrix that incorporates Corporate Social Responsibility and Sustainability standards thereby meeting its commitment to OECD Guidelines for Multinational Enterprises as well as Universal Declaration of Human Rights. Through its annual Dig Deeper report, the bank publicly conveys its performa nce in sustainability supply chain management (Sathye 2011). The Commonwealth Bank has made managing the cyclical flow of its supply chain easier based on its supply chain and finance solution initiative. The bank uses its online platform to provide secure access for uploading ones instructions, saving reports as well as integrating seamlessly between the several enterprise's resources planning systems (ERPS) to undertake business anytime. How Banks Use ICTs and Applications to Support B2B Processes The three banks have sought the consultancy services from the world leading Australian software expertise. The Tata Consultancy Services (TCS) has invested in Australian IT sector and has provided world-class banking applications for not only these three banks but also the mainstream Australian robust financial service industry. Since TCS is one of the top ten IT firms in the world, these banks have greatly used its products and services to support B2B for both CA and SCA (Bourke 2010). Commonwealth Bank has been the main beneficiary among the three banks, and it is rated as one of the biggest clients to TCS. The banks have benefited from TCSs services due to its ability to continue to develop new software for banking and finance sector which are its critical targets (Kadlec and Mare 2013). The banks have adopted the TCS product TCS BNCS which is a suite of world-class solutions for banks thus making global banking easy. The banks are also adopting the branch automation technologies advanced by TCS that is capable of integrating mobile services, cash recyclers, scanners, printers as well as biometrics into a seamless set of services. The implementation of these technologies will ensure that bank branches become more efficient coupled with a reduction in the cost of business. The banks are also looking forward to adopting the model bank concept being presented by TCS to use a cloud-oriented, software-as-a-service suite of technologies thereby creating a market-ready IT systems which have already being adopted globally to promote B2B (Besimi and Dika 2013). The banks have also adopted a TCS single-app technology which is helpful in digital finance platform by permitting banking clients to utilize a single app across an array of devices and browses. References Besimi, A. and Dika, Z., 2013. B2B or Not B2B? The future of B2B and the role of Small and Medium-sized Enterprises from SEE. 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