The maximum marks obtainable for this section are 40. Start each question on a new page. Case Study: Retail Banking Reshape Hong Kong retail banks have to reshape their operations to meet the challenges arising from Increased competition from non-bank Institutions, advances In technology and changing consumer behavior. A report published by the Economist Intelligence unit in conjunction with Coopers & Library says that retail banks have to provide “anytime, anywhere, anyhow’ banking for customers in the next century. Banks would likely see a drastic change in service delivery channels.

Banking would move away from branch-centered operations to a much wider range of avenues. Remote banking, including transactions carried out on-screen, will be common. This includes automated teller machines, personal computers and television. For face-to- face banking, the report forecast that express banking shops would emerge, offering basic services. Traveling bankers, either stationed in mobile banking shops or visiting customers’ homes, would be employed. Coopers and Library Financial Institutions Consulting managing partner Alan Games aid: “Consumers want ease of access at any time and in any place, especially from home and by phone. Branches would change from transaction-based centers to sale-oriented marketing sites. He said one bank in the United States performed 70 per cent of its transactions electronically. “Hong Kong has a fair way to go,” he said. To fend off competition from insurance companies, mutual funds and even technology provokers sun as Maladroit, retail Dank Take major changeless. I nee would have to analyses their customer base and develop strategies to shift banking transactions to the MAKE BIFF (1204) specimen Exam paper Page 2 of 5 lower-cost channels.

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Kenneth Chunk, a partner at the firm, said: “As local telephone calls are free, banks should encourage their customers to do more telephone banking. ” Retail banks should determine the shape of their future service delivery system. Once the shape is decided, they should reorganize resources, including staff retraining and developing data warehouses. The daunting task would be to manage the transition. Issues such as how to handle customers, manage staff and finance the transition needed to be tackled.

The bank that can successfully meet these challenges will emerge as the leading retail bank in Hong Kong ,” Mr. Games said. The report was based on 50 interviews with senior executives from leading retail banks around the world. In Hong Kong, the Bank of China, Honking Bank, Standard Chartered Bank and Dad Sing Bank contributed. Question 1 (20 marks) If you are the marketing manager of the Bank of China, how are you going to formulate a services marketing strategy to encourage customers to shift banking transactions to the lower-cost channels? Question 2 (20 marks)

Based on the services marketing strategy that you have formulated in Q. L above, what are the implications that you would address and how are you going to deal with them?