Shopping has become a past time, which means that people may borrow to shop.
People shop around for loans credit cards mortgages they don’t necessarily stick with their own bank which means that banks are competing for these people to use their service.
Certain banks offer to do all the work when you switch banks this was originally the main reason people tended to not switch banks.
Longer working hours mean that people have less time to go to the bank and that banks are usually shut when people do have the time.
Sunday shopping means that people are in town on a Sunday but cannot get into the bank.
Technological factors
Internet banking has had obvious effects on the UK banking industry. This has included direct payment of benefits into a bank account, the government and department of work and pensions have directed a huge sum of money toward the issue of direct payment of benefits people who in the past didn’t have bank accounts due to low income and being on benefits are now opening accounts to have their benefits paid into.
Chip and pin cards means card security is getting better people who in the past would not use cards due to worries about security will now use them also people will be more likely to use their cards on the net with this method.
Security on the net and Internet transactions.
Direct debit switch and standing orders means less people use cheques
Automatic updates of balance on the net.
Online statements.
Environmental audit of a UK bank branch
Political factors
Local government policies such as town centre parking, waiting times in parking bays outside branch etc will affect a banks trade if there’s nowhere to park in town then people wont visit the branch which means branch centred advertising may not be seen.
Economic factors
The local employment levels will affect the branch for example if a large number of people have recently been made redundant then for a period of time they may have their redundancy pay in the bank as time goes by people will start to have less money borrowing may increase and default on payments may occur.
Social factors
How the local community feel about borrowing can influence a bank it may be a small community where its not as acceptable to be in debt they may not have credit cards etc as they don’t shop for pleasure only necessity.
If the branch is in the city centre it may not have many people who actually hold an account with that branch but they bank with it because its close to work therefore they made need more staff to cope with lunchtime rushes etc.
Longer working hours mean many people cant get to their actual account holding branch.
Technological factors
Their may not be a branch at all the presence may be a cash machine or in the case of a rural branch withdrawing cash at the post office using a high street bank cash card, with phone banking and internet banking people need never visit a branch.
(Jennifer Murray)
We decided to look into the Strengths of all 3 of the sectors of banking in order for us to assess which area we would focus on.
Personal Banking
Strengths
Products/Services: - this would be very useful to me as a personal banker, as I could have the best products and services that suit my lifestyle and me.
Cash card/Cheque book: - this would be an easy means to access my account.
Easy access to money: - you can have your money at your own convenience.
Security: - you know that you money is safe.
Return on investment: - you get interest on the money that you save.
Weaknesses
Poor Service during peak time: - during dinnertime the service is poor as less staff are on the tills.
High charges: - High charges on loans etc…
Some staff are inexperienced: - if you ask something to a member of staff he/she sometimes dose not know hence wasting more time.
Hard to use Online Banking and unsecured: - the online banking is still not secured enough and takes a lot of time to sigh up to the service.
Location: - the bank may be situated only at town centres.
Accessibility: - some banks have poor access for disabled people.
Opportunities
Growing market: - the market is rapidly growing.
New technology: - new technology will help to improve security.
Increases in market share and profit: - as stated.
Improve on Online Banking facility: - as more people like to bank from home.
More facilities for staff: - more training should be given to staff.
More new products or services: - more variety of products and services will become available.
Improve weakness into strengths.
Threats
Threats from high street banks: - the bank may loose customers if interest return rates are higher.
Hacker Security: - hackers are still a big problem as peoples accounts may be at risk as well as the bank.
Student debts: - students loose more money for banks as they take out loans and have overdrafts.
I would prefer a bank account that is suitable for me, I am an active people who wants easy banking access. I would prefer to have all my account facilities at one point for example all my checking, saving, loan and timesaving conveniences in a one-relationship account, with one monthly statement that with all details of all accounts carried out. I would prefer a minimum balance requirement so that I never have to pay a monthly service charge.
A personal banker would like convenient services so that they can have complete control over and access to his/her money.
Some of the Services that are available for personal bankers are:
- Accounts: some banks offer a wide variety of accounts to suite different types of lifestyles, such as, people that prefer to save their money rather than spend it.
(Please refer to Appendix 2 for a SWOT analysis for personal banking)
(Sundeep Singh Chahal)
Corporate Banking
Strengths:
All major high street banks have products and services available for their Corporate business customers. The banks need a large number of products and services to meet the varying requirements of different types of business customers and they can choose from a wide range of products and services as and when they require them. Corporate business customers would need fast access to their bank, as they regularly need to purchase different things fast such as materials and products from their suppliers. They may also require regular loans in order to keep the business in hand. It is important that the customers receive advice that is offered to them about their financial transaction, which is a benefit to any business.
Weakness:
We think that banks have a number of weaknesses these include things such as their location. The location of a bank is very important and is not always convenient because they are mainly based in the town centre and it can be difficult for customers to visit the branch, especially with the parking problems in town centres. Some banks have poor customer service at certain busy times like at lunchtime on a working day. There is too much paper work involved when taking out loans, which can be time consuming and frustrating for some customers.
Opportunities:
There are always opportunities for banks to improve their relationships with customers, they can do this by relocating their banks, or have other branches outside the town centre which would make it easier and more convenient for customers to access it.
Threats:
Cheaper labour abroad is a known threat in the banking industry. Many companies like HSBC are moving to countries like India for cheap call centre staff, which can affect the in the way they are operating as some customers do not want their call to be answered half way across the world. This will affect the corporate business customers, as it will become more difficult for them to have their calls answered locally or nationally by their bank. An increase in interest rates would also be a threat to corporate business customers, as they will have to pay higher amounts of interest on their large business loans. As a result of this some customers may start to compare the interest rates of other banks and shop elsewhere for a better deal.
(Please refer to Appendix 3 for a SWOT analysis on corporate banking)
(Ravinder Singh)
Small Business Banking
Services for SME:
As strengths, our high street bank arranges big structures, well-located (town centres, shopping centres…), so it is accessible for the owners of SME. It is highly recognisable by its logo, store design…
We have at the owners of SME’s disposal quick ways to deposit cash: “business express services” (no queues). We are available 24 hours a day, 7 a week, with Internet and phone banking.
We offer a high range of “products” and services, as low cost business banking, committed overdraft guaranteed, discounted business loan (with low start loan payments, and a quick decision from us), and cash flow finance. We try to customize them, so they can respond to individual needs.
Merchant services allow businesses to accept payment by credit or debit card.
We have specific financial institutions, to answer to specific needs of the SME.
We have a lot of similarities and a common understanding with SMEs because of a common background.
We have experienced staff, skilled employees ready to answer to every need and to give advices.
We are the most innovative about online security systems.
We are in an oligopoly competition, as few banks share the market.
But, we also have weaknesses: customers do not like our design characteristics (no open spaces, cold environment), and they do not like feeling losing time because of our employees proposing them new services they don’t need.
There are no really distinctive products between banks.
We must have appropriate IT systems, to segment our customers (by preference, credit historical, profitability rate, financial products, and products and accounts in concurrence banks).
“Too much information kills information”: customers find we have too much ads so the bosses are not looking at new packages or offers anymore.
The owners of SME feel they have not all the information about our evaluating methods, they feel they have difficult access to loans, and that we are generally more willing to lend to franchises : and a negative influence of the asymmetry information affects the credit decision-making process.
About the external environment, there are more and more SMEs, contributing to the GNP growth and creating lots of jobs.
Global consolidations, mergers and alliances assure maximum market dominance in financial services.
The more developed the financial market, the lower the requirement for supporting services to meet the demand for credit is (economies of scale).
The differentiation affects more through services than prices.
We can consider as a threat the fact that level of investments depend on the interest rate, and we must take into account the fluctuations of inflation rate.
The more UK consumers save, the more we could loan money to companies at a lower interest rate. The customer satisfaction depends not just on the product, price or service, but on every function of the organisation (from the chief executive to the receptionist).
SMEs can be afraid and not confident in us, as they see us as monsters from a different world (who never want to give money or help in starting up a new firm).
SMEs are more risky, they are more likely to fall during bad economic situations.
There is no “Good relationship’s code” between banks and SMEs (which define the both engagements).
The British Bankers’Association (BBA) Business Banking Code outlines what businesses can expect from the Banking Industry (Kotler, Marketing Management).
There exists competition from other institutions.
To us, the most emerging opportunity is Internet, because of the increasing rates of Internet’s use, with the growing E-Tailing (purchases on Internet with credit card), customers and firms which provide the products need more security in transactions, and they are more confident in banks to this point.
Internet provides cuts in cost, as it decreases needs of employees’ trainings. Internet allows a higher customization, with one-to-one services. There will have more and more wireless banking, and payment services using next generation mobile phones.
The ageing population has higher disposable incomes, which means higher savings, so we could higher loans to firms.
To promote our new products and services, we should use papers ads, television ads and Internet ads.
Maybe we should try to attire the “private customers” and also SMEs owners in our bank by giving them free pieces of advices. So, we could launch a communication plan in local papers, on TV and on Internet based on a “free trial”, to make them visiting us.
(Please refer to Appendix 4 for a SWOT analysis on a SME)
(Laetitia Garret)
The OSTAC Framework
The following areas are covered in more detail in the individual reports attached to this report therefore below information is only a brief overview of how and why a Bank would like to maintain its relationships.
Objectives
- Maintain current relationships with customers
- Obtain new relationships with new customers
- Maintain relationships with suppliers
Strategy/Tactics/Action
We will advertise in the branch on television and in appropriate media
Our objectives will be met by using one of the following methods:
- Opening later in the evening so were open when people finish work
- Opening weekends i.e. Sunday morning or Saturday afternoon
- Ensuring that every window is staffed at peak periods
- Quick paying in envelopes and secure drop off box
- Benefits for people who use predominantly online banking such as reduced rates
- Greeter at door to direct people in the right direction
- Phones answered by people not machines
Control
- Day to day transactions will be recorded and logged on a database
- Records will be kept of all enquires these will be used to offer services at a later date i.e. someone enquires about a loan but doesn’t take it up we will target them with loan advertising in the future
- A customer service line will be set up to deal with all enquires and complaints.
(Jennifer Murray)
Appendix 1
HSBC
HSBC is one of the world’s largest banking and financial services organisations. They have over 5000 offices in over 80 countries. HSBC was formerly known as Midland Bank and First Direct is also part of the HSBC Group.
HSBC has many products and services to offer for Personal Banking, Business Banking and Corporate and Institutional Banking.
For the purposes of this assignment as a group we will only be focusing on the Personal Banking products and services that HSBC provide.
We have decided that we would prefer our typical high street to be similar to HSBC Bank plc as they are so popular and successful.
The following products and services have been focused on HSBC Bank plc’s Personal Banking:
Personal Internet Banking
Take control of your finances - bank where and when you want to with 24-hour online access to your accounts, seven days a week
Our free Internet Banking - you only pay your Internet service provider the cost of going online - is secure and easy to use.
Register online quickly and easily for the ability to:
- view balances and transactions
- manage your standing orders and Direct Debits
- pay bills and make payments to family and friends
- transfer money between your accounts
- apply online for credit cards, personal loans and savings accounts
- stop your postal statements or reduce their frequency.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/personal-internet-banking)
Current Accounts:
There's more to an HSBC current account than meets the eye
"Excellent products, excellent service and we get no complaints about them - zero! And that's been the same for years and years". Money Editor, Daily Mirror.
“Our current accounts offer so much more than just an account number, a card and a cheque book. HSBC current accounts are also a great way to access the vast range of services provided by the bank that Management Today voted "Britain's Most admired Bank".”
HSBC provide banking services you can rely on
We’re committed to:
- providing high-quality services
- recognising your individual needs
- being as accessible as possible
- carrying out your requests quickly and reliably.
With the HSBC Current Account you’ll enjoy:
- face-to-face access to experienced staff and through them access to a wide range of banking specialists
- one of the best overdraft rates on the high street
- long term good value, not short term temptations
- banking by phone, TV, Internet or at any of our branches
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/current-accounts)
Savings Account
“Making your money grow
It's great to have money to spend and we all want to enjoy ourselves, but it also makes sense to save. Whether you're planning for a major purchase, building up some cash for future needs or simply saving for the sake of it, we have an account to meet your needs.”
A range of Accounts
Choose from:
- A variety of savings accounts, including instant access, high interest savings accounts and accounts for children
- Deposit bonds and money market deposits
- Foreign currency savings account.
We have accounts that let you access your money immediately, a higher-interest account for money you don't need right away, and for larger amounts, money market accounts and deposit bonds. Whether you save the same amount every month, when you have some extra cash, or a combination, we'll be able to help you plan for your future.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/savings-accounts)
Credit Cards
“The financial flexibility and control you need
A credit card is much more than just an alternative to carrying cash in your pocket. It also enhances your financial flexibility by helping you to spread and manage the cost of your purchases through the month.”
Helping you control your money
An HSBC Bank Credit Card is:
- safer than carrying cash
- a source of additional spending power when you need it
- accepted at over 29 million outlets worldwide as well as for Internet, TV and telephone shopping.
We make it easy for you to manage your credit card account with our Internet and TV Banking services. You can check your card balance and transactions - even make bill payments. What's more, Internet Banking allows you to control your credit card account from anywhere in the world. You can even arrange to make your monthly payments by Direct Debit to avoid any inconvenience.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/credit-cards)
Mortgages and Home Buying
Choose the right rate for you
All our mortgage loans feature daily interest. This means you're paying interest only on the outstanding amount of your loan after allowing for any funds credited to your account that day.
Fixed interest rates
-
Enable customers to fix their interest rate for a period of time during which their repayments remain constant.
- Once your application has been agreed, you'll be charged a booking fee.
-
Overpayments can be made without charge, as long as the additional payment does not exceed 20% of the regular monthly repayment.
-
There are no extended tie-ins.
- At the end of the fixed rate period, you will usually be offered a further fixed rate term. If not, your mortgage will switch to our variable rate.
- If you repay the loan before the fixed rate period has ended, you will be charged an early repayment fee. We'll advise you of the maximum amount before you take out the loan.
Variable interest rates
-
We guarantee that within one calendar month of a Bank of England base rate reduction, we will amend our Home Buyer Mortgage variable rate so that it is no more than 1% above base rate - and that's a guarantee for the life of the loan.
- Lower interest rates for mortgages over £250,000.
- Unlimited overpayments and lump sum reductions to variable rate loans with no charges.
- No charges for early repayment.
- No tie-ins.
- No loan to valuation fee.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/mortgages-and-home-buying/interest-rate-options)
Borrowing Money
“Extra cash when you need it most
You never know when you're going to need extra money. Whether it's a small amount for a special occasion or a larger sum to cover something as substantial as a new car, we have a range of products to meet your needs.”
You can count on us for guidance on which product best suits you, and to find out more about all that we have to offer. And with our repayment protection insurance, you'll also have the peace of mind of knowing that your repayment obligations are covered should the unexpected happen.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/borrowing-money)
Choose the way you want to borrow
“Overdrafts - extra cash for the short term
If you're an HSBC account holder and have a regular income, one of our overdrafts might be the perfect answer if you need cash in the short term.”
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/borrowing-money/overdrafts)
Pensions
“Planning for your future
Retirement may seem a long way off to you, or it may seem just around the corner. Either way, it's important to plan and save for your retirement years. And the earlier you start, the more you'll have saved up to enjoy after you've stopped working. A pension is one of the more common ways to save for this purpose.”
Pensions and their benefits
- Contributions are invested in a tax-efficient environment to provide income.
- Individual contributions gain tax relief.
- Employer contributions gain tax relief and have no tax liabilities for the employee.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/pensions)
Investments
“Planning for your future
Building your savings for the future is always a good idea. But putting money in the bank every month is just one way to save. Investments can also be a valuable part of your savings strategy - but to get the most out of investing, you'll need a long-term plan. HSBC can offer you guidance and information on the range of funds and other investment tools that we offer, as well as providing a sharedealing service.”
A range of investment choices
We offer:
- high-interest or regular savings accounts
- investment funds
- stocks and shares
- ISAs and other tax-free products
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/investments)
Insurance Services
“Protecting yourself against the unexpected
You never know what could happen in life - so it makes sense to be prepared for the unexpected. By planning ahead and insuring yourself, you'll have one less thing to worry about. Our range of insurance services provides coverage from cars to health care to holidays to homes and their contents, and more besides.”
Personal Insurance Services
We offer:
- Home Insurance
- Motor Insurance
- Travel Insurance
- Protecting you and your family in the event you can’t earn your normal income.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/insurance-services)
Youth, Student and Graduate
Student Service
“With our Student Service, you get a lot more than just a bank account. Here's the full picture of the benefits and services available to you.”
Our Student Services offers:
-
24/7 access* through Internet and TV banking
-
bank by telephone or pop into your local branch
- Interest-free overdraft for the duration of your course
- Student advisors in all our branches
(Source: http://www.ukpersonal.hsbc.co.uk/code/tools/site/Renderer.jhtml?cp=/public/ukpersonal/personal_banking/youth_student_and_graduate_services/en/yth_student_service.html&bu=ukpersonal&toolName=personal_banking&ln=en&isPc=false&pId=5ae6fe40-94a9-11d6-bb00-080020c629df)
Gap Year Service
“Not diving into student life straight away?
Whether you're planning to travel or work or both, our new Gap Year Service will give you all the backup you need.
And at the end of your Gap Year, we'll contact you to transfer1 your account to our Student Service.”
Our Gap Year Service offers:
-
24/7 access* through Internet and TV banking
- bank by telephone
- cheque book and debit card with £100 cheque guarantee
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/gap-year-service)
Graduate Service
Our range of services will support you through the transition from student life to your next step. You've moved on, but you still need a hand with your money. Who doesn't? As we've helped many before, we can listen to what you need - then give you a tailored, hands-on approach that can suit your circumstances.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/graduate-service)
Post Graduate Services
Services for postgraduates
Postgraduates are eligible to apply for our Student Service, so if you've decided to extend your studies, you could qualify for a £1,500 interest free overdraft*.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/postgraduate-services)
International Student Service
If you're planning to study at a UK university, our International Student Service has been created to provide you with all the support you'll need to help you manage your money throughout your time as a student in the UK.
Here is a summary of the services available to you:
-
Student advisers - available in our branches and over the telephone.
-
Debit card - use it to pay for goods and services and to withdraw cash free of charge from our extensive network of cash machines in the UK. You can even use it abroad where you see the Cirrus or Maestro symbols.
-
Direct Debits - Set up Direct Debits to take care of regular bills that you need to pay.
-
24-hour banking - Internet, Digital TV and Telephone Banking available to you*.
-
Savings - A range of savings accounts available to you. Regular saving can be made easier by setting up a standing order to transfer money on a regular basis.
-
Insurance services - cover your belongings while at university from only £24 per year.
-
Youth Travel Insurance - worldwide cover for trips up to 13 months.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/international-student-service)
Young Workers
If you're between 18 and 21 and working full-time, our Bank Account Service will make sure that you have full banking facilities to equip you well for working life.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/young-workers)
Banking Services for 16 and 17 year olds (Right Track Service)
If you're 16 or 17, you're likely to be taking one of two routes - studying or working. Two very different directions and that's where our Right Track Service comes in handy. You'll have everything you need to make the most of your cash.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/banking-services-for-16-and-17)
Livecash Account
More control over your cash
If you're between 11 and 15 years old, then our Livecash Account might be just the thing to help you look after your money.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/livecash-account)
Young Savers Account
A great way to start banking
Our Young Savers Account is an excellent way for younger customers to start learning about finances.
If you're between 7 and 10 years old and your parents or legal guardian agree, you can open an account in your own name. You can run the account by yourself, but we have to tell your parents or legal guardian if they ask us about it. If you're under 7, your parents or legal guardian can open a Young Savers Account for you in their name.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/ys-and-g/young-savers-account)
HSBC Premier
Ever thought you and your money deserved a bit more care and attention?
HSBC Premier is a service with a difference - several differences, actually - that we've set up to provide people with a higher level of individual attention. It puts at your disposal a comprehensive range of accounts and personal services that we tailor to your individual needs. And it provides you with your own HSBC Premier Relationship Manager to guide you and help you get the most out of what's available.
HSBC Premier is a service in the true sense of the word. If you want to check your balance in the middle of the night, our 24-hour telephone banking team will be there to help. If you want to chat about your mortgage, you can call your Relationship Manager. If you need advice on investments, either our own experts will help or we'll introduce you to an independent financial advisor. If your child falls ill on holiday, we'll help you find an English-speaking doctor.
(Source: http://www.hbeu1.hsbc.com/ukpersonal/premier/default.htm)
Personalised Relationship Management
With HSBC Premier, you'll be looked after by your own relationship manager whose job is to provide the best financial solutions to meet your needs.
If you would like advice or want to know what your options are, they are there to help - an individual service for individual customers.
So whether you're buying your dream cottage in the country, looking for the right equities to invest in or simply looking for new opportunities, the personal attention your relationship manager provides could be invaluable in helping you choose what's right for you.
(Source: http://www.hbeu1.hsbc.com/ukpersonal/premier/relation.htm)
Private Clients
“Truly independent financial advice
Private Clients is provided by HSBC Trust Company (UK). The service gives you access to a complete range of products and services to help you plan and manage your financial affairs. Private Clients is not tied to the products from any single provider, so we offer you completely independent advice. Our qualifying criteria is £150,000 liquid assets and/or £75,000 income (£100,000 joint).”
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/private-clients)
Travel and Motoring
Take advantage of our experience
We offer a range of both travel and motoring services designed to make your life simpler and easier
When you want to travel, turn to us for:
- travellers' cheques and the ways to access your cash abroad
- insurance
- credit and debit cards
- special discounts for airport parking.
If you're planning on buying a car, or just thinking about it, we can help with:
- financing options
- insurance cover
- buying hints and tips.
And if you're taking your car abroad, we can help you to make sure the journey goes smoothly.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/travel-and-motoring)
Offshore Banking
“Living, working or moving abroad?
Offshore? Overseas? Abroad? Whatever you call it, wherever you are in the world, the one thing that you can be certain of is that it's a place of opportunity, adventure - and possibly, rich financial reward. What's more, your international lifestyle brings with it unique financial opportunities! And this is where HSBC Offshore can help.”
HSBC Offshore can offer:
- a range of savings and investment opportunities
- effective tax-planning and wealth management services
- total accessibility online or by phone, around the clock and around the world.
(Source: http://www.ukpersonal.hsbc.co.uk/hsbc/personal_banking/offshore-banking)
(Tarninder Singh Sandhu)
Appendix 2
Personal Banking
Corporate Banking
(Sundeep Singh Chahal)
Appendix 3
Corporate Banking
(Ravinder Singh)
Appendix 4
SME Banking
SWOT ANALYSIS
High street Bank
(Laetitia Garret)
Bibliography
Barclays’ Brochure / Leaflet from local branch (in town)
Halifax Brochures / Leaflets from local branch (in town)
HSBC Leaflets and HSBC web site – http://www.hsbc.co.uk
Mintel Report, 2003 – http://www.mintel.com
Natwest Brochures / Leaflets from local branch (in town)