The Internet Banking Project In Industrial And Commercial Bank Of China (Shanghai)

This paper studies endogenous diffusion and impact of a cost-saving technological innovation -- Internet Banking. The bank understudy i.e. ICBC has efficiently embarked on its internet based private banking service. The vice director of e-banking felt that the entire project was an accomplishment in terms of its schema and satisfactory quality. Here is this case he needs to expound the understandings and the lessons internalized along the entire course of the project. Moreover, there were various issues which were raised during this intellectual itinerary, which included the challenges regarding computer system implementation, Information system design and most importantly the feasibility analysis. This case deals with the fact that how he confronted the challenges and developed a plan which immensely benefited bank.

ISSUES

There are various issues discussed in the case. These issues will be highlighted below:

- The foremost challenge was the seamless promotion of the existing banking system and channels for the installation of new state-of-art IT infrastructure. In this regard, the changes made to the structure and functioning of the financial institution challenged the regulatory structure of the bank.

- Furthermore, the subsequent development of innovative banking products on the skeletal framework of information technology.

- Another tactical goal on the banks strategic map was to fortify associations and interactions with private customers by offering better product delivery and in doing so harvesting the use of internet as a medium.

- Initially the bank’s core banking system was product oriented, but the need of the hour was to develop a customer oriented system, because the challenge is to build customer loyalty, cross sell, and enhance repeat business.

- The industry is composed by a continuum of banks which produce a homogenous product вЂ" banking service. Domestic as well as foreign competition is violent. Not to forget the fact that ICBC has not been the first bank to embrace internet banking. So, it is all the more reason which places the bank in the most precarious position to continuously shield it self from the volleying competition.

- Another pivotal issue was that of the multichannel integrationвЂ"call center, branch, ATM, and InternetвЂ"which is immensely important for large financial institution like ICBC to attract and retain customers with the promise of “anytime, anywhere” account access. Customers are eager to have the kind of flexibility to use whichever channel is most appropriate at a particular time. Continuing with the same point the, ICBC was also concerned about the relative penetration of the existing as well as new customer base to gain access to the banks new technological proposition.

- Moving further consumer protection, with issues such as transparency, security, accountability, and legal recourse also remain to be considered. Currently with the first release the security issues are being answered but with second and third release a well-reputed professional vendor would be needed.

- There was another concern about the internal marketing i.e. coordination and communication between the departments. Unless or until the there would be a flawless assimilation between the internal customers and internal suppliers, external marketing would keep on lagging.

- As they were making use of a phased approach, in which they would be piloting the first release only for some time, there was this concern that it would constrain the upshots of the nation wide impact of a consolidated Internet Banking system.

- Another issue was that manager was apprehensive about the use of IBM WSBCC platform, because they had never used it before, and so it was extremely important to “test” the usability and compatibility of the proposal by developing small portion of the services.

- The organization is facing a big challenge in terms of developing a consolidated data repository, should allow for smooth data access and retrieval, without building up repetitive and redundant data.

- The advent of Internet banking in ICBC would effect a variety of stakeholders, whether inside or outside the bank. So such a strategy should be adopted which should leave no space for