A Study On Abn Amro Business Essay

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Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India.

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla.

When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century.

The banking sector in India has been widening its scope due to liberalization. Banks today are not mere suppliers of money. They have become providers of services such as selling insurance, mutual funds, investment opportunities etc. In the past, the banks did not find any attraction in the Indian Economy because of low level of economic activities and few business prospects. Today we find positive changes in the National Business Development Policy. The private sector banks failed in serving the society. This resulted in nationalization of 14 commercial banks in 1969. Nationalization of commercial banks paved the way for development of Indian Economy and canalized financial resources for the upliftment of the weaker sections of the society. The involvement of Public Sector Banks transformed Indian Economy. It was felt the bankers review their services not only as financial intermediary but also as a pacesetter

History

ABN AMRO is a prominent international bank, its origins going back to 1824. ABN AMRO ranks 11th in Europe and 18th in the world based on total assets. It's network is comprised of over 3,000 branches in more than 60 countries, a staff of about 104,000 full time employees and total assets of EUR 637.5 billion (as at 30 September 2004).

Introduction Of ABNAMRO

ABN AMRO boasts an extremely diverse and demanding corporate and financial institution's customer base. And as such, they have developed products and services that focus on meeting these specific needs of their customers. In essence, they believe that these products and services have been a direct outcome of years of interaction with and feedback from their customers in Pakistan and around the globe.

Their local and regional product management units meet regularly to improve upon and introduce state of the art products and services to help keep in line with the changing needs of their customers. They have also developed strong strategic liaisons with other external solution providers (local banks, couriers, security companies, etc.), and are able to extend their domain into areas where they feel niche suppliers provide advantages which they can extend to their corporate customers. They offer long-standing expertise and experience in Consumer Banking, Corporate Banking, Investment Services, Treasury, Cash Management Services (allowing customers to provide payment and disbursement instructions electronically), and Correspondent Banking (for local and international transactions).

Vision Statement

‘To be the best of the best and the only place to work'.

Mission Statement

‘We strive towards service excellence'.

ENVIRONMENTAL ANALYSIS

INDUSTRY & MARKET ANALYSIS

The environmental analysis of the bank comprises of the two major aspects.

External Environment.

Internal Environment

.1.1 External Environment

The external environment includes the Competitors, their market share, the corporate policies that the competitors boast, the Value-Added Products such as Credit cards, ATMcards, Travelers Cheques etc. it entails all these marketing slogans. Thus external environment also includes the perspective of people about the organization and in contrast the other competitor The most important factor of external environment is that it includes the State Bank Policies and restriction of state bank for the foreign banks in trading. It also deals with the State bank restricted policies for allowing branching network, interest rates, and checks that every thing is according to the constitution of India. To follow the banking laws by the banks working in Pakistan is one important part of the external environment. Foreign bank do work under the policies of the State bank but have their own corporate policies that are dictated from the head office and it is practiced that there should be no conflict between the two. International Corporate policies for the banks as well as the laws of India have to be compatible to each other and there should be harmony among the two otherwise the Banks will go beyond the limits where it either go bankrupt or on the other hand threat the Pakistani banks as far as market share is concerned. Therefore both the extremes are not comforting. When. we study Alfalah in the perspective of all the prevailing circumstances of the external environment, we come to the conclusion that the bank is maintaining a harmony among all the variables.

Like other competitors they also keep an eye on the country situation, the political game, and the ups and down of govt. etc. The bank obeys all the rules and regulations dictated by the State Bank of Pakistan and work in fully amiable conditions. As far as the competitors are concerned, they are also watched and a surrounding of positivism is sought. Thus bank stands on its own place in the society with its symbolic heritage and culture.

Internal Environment

The Internal Environment means the environment at the bank. Thus it refers to the inside Departmental relationship in the bank. It includes:

§ Organizational culture.

§ Centralized/Decentralized system

§ Hierarchy.

§ Norms and values of an organization

§ Course conduction for the employees

§ Rewarding the employees.

§ Promotion policies.

§ Appraisals.

At ABN AMRO all the above aspects carry high importance and value. The organizationculture is very clear and surrounds around hard work and dedication. The system work in full coordination and the delegation of authority flows from top to bottom. The manager is accessible anytime to any body in the bank. Thus creating a more peaceful and homely environment. Employees are regularly sent on placements and new courses are introduced. Thus employees get educated about the innovative measures they can take in dealing with customers. There are certain schemes for the employees also. Promotion policies are not specifically applied but there is a regular increase in the pay. As the employees get senior and serve the bank for a longer duration of time, there salary gets on increasing and hence there seniority is paid in form of higher salary. Certain senior staff members are also given promotion and are sent on foreign visits. Those employees about whom customer have good opinion are also rewarded. Thus the internal environment of the bank has its own significance and traits.

6.2 MAJOR PRODUCT LINES AND MARKET SEGMENTS

ABN AMRO Bank has five Strategic Business Units or SBU's, these units are listed below:

1. Branch Banking

§ Deposit Rates

§ Remittances

§ Foreign Trade

§ Lockers

2. Consumer Banking

§ Credit Cards

§ Auto Loans

§ Home Loans

§ Consumer Durables

3. Electronic Banking

§ Phone Banking

§ ATMs

§ Online Banking

4. Corporate Banking

§ Trade Finance

§ Structured Finance

5. Treasury and Investment

§ Money Market

§ Forex Market

§ Investments

§ Government Securities

§ Custodianship

§ Financial Advisory

Nostro Account

CRITERIA FOR SEGMENTATION OF ABN AMRO

Segmentation in a right fashion makes the way for profitable marketing. This helps policy planners in formulating and innovating the policies and at the same time also simplifies the task of banking professionals while formulating and innovating the strategic decision. The following criterion makes the segmentation right.

1. ECONOMIC SYSTEM:

An important criterion for market segmentation is the economic system in which we find agricultural sector, industrial sector, services sector, household sector, and rural sector requiring the weight age while segmenting.

A). AGRICULTURAL SECTOR:

In the agricultural sector, there are four categories since the needs of all categories can't be identical.

B). SERVICES SECTOR:

It is an important sector to the economy where the banking organizations get profitable business. The two categories of organizations such as profit-making and non- profit making are found important in the very context. The banking organizations need to identify the changing needs and requirements of the services sector with the frequent use of IT and with the mounting pressure of inflation and competition, we find a change in the hierarchy of needs.

C). SERVICES SECTOR:

It is an important sector to the economy where the banking organizations get profitable business. The two categories of organizations such as profit-making and non- profit making are found important in the very context. The banking organizations need to identify the changing needs and requirements of the services sector with the frequent use of IT and with the mounting pressure of inflation and competition, we find a change in the hierarchy of needs.

PEST ANALYSIS

1) Political Analysis:

THE INDIAN BANKING INDUSTRY IS GOVERNED BY THE BANKING REGULATION ACT OF INDIA, 1949.

THE INTEREST RATE SCENE:

Following the East Asian crisis in 1997-98, the RBI has always shown its intention to steadily reduce the interest rate resulting in a narrow difference between global and domestic rates.

GOVERNMENT POLICY:

In the pre-liberalization era, the banks used to function in a highly regulated environment with administered interest rates, quantitative restrictions on credit flows, etc. These restrictive regulatory norms led to credit rationing and unproductive use of credit and low level of growth. Since 1991, banks have been following flexible interest rates. Interest rates have been deregulated and banks are free to fix their prime lending rates.

IMPLICATIONS OF SOME RECENT POLICY MEASURES:

The move to increase the foreign direct investment limits has been perceived as a welcome announcement to foreign players waiting to get a foothold in the Indian markets. With the liberalization of the public sector, the public sector banks found it extremely difficult to compete with the new private sector/foreign banks.

ENVIRONMENTAL REGULATIONS:

Banks should start taking cognizance of Environmental Impact Assessment (EIA) and Environmental Audit (EA) in their assessment for funding because -

• The bank will have to assist the government in putting the India in their league of the environmental conscious countries of the globe in a view of their continuing support to social cause in the past too.

• The growth of exports-manufacturing of eco-friendly - finance by bank needed.

• The success of the local population control equipment industry.

2) Economic Analysis:

The main economic factors that should be monitored with regard to banking sector are as follows:

• Personal & household disposable incomes

• Employment levels

• The rate of inflation

• Income tax level & taxation structures

• Savings , investment levels and trends

• Stock market performance

• Consumer spending and consumer credit

3) Social Environment Analysis:

Many demographic factors have an important bearing on financial services markets.

• Changing attitude towards consumer credit and debt

• Changing employment patterns

• Number of working women

• Degree of acceptability of innovative products

• Attitudes of local population towards foreign companies and products.

• Peculiar socio-cultural differences affecting business prospects adversely.

• Life style of people

4) Technological Environment Analysis:

Technology has a major impact on many industries including financial services and banking in particular. ATM services which not only provide cash but also allow for bill payments, deposits and instant statements are widely used. From the customers view point technology has played a major role in the development of the process whereby the service is delivered. Automated queuing systems have made visits to the bank easier and more convenient. Phone banking and E - Banking services are now being used in place of traditional branch based - service process Technology has also played a major role within organizations, bringing out far better efficiency through computerized records and transaction systems and also in business development, through setting up of detailed customer database for effective segmentation and targeting.

Main technological developments fall within these categories:

• Process development

• Information storage and handling

• Database system

Some of the technological innovations are: Automatic teller machine (ATM), Net banking, Phone banking, Mobile banking, Smart cards, Electronic transfer, Electronic cheques, and Bank net, sophisticated software to analyze, keep track of and cure customer grievances.

CHARACTERISTICS OF SERVICE OF ABN AMRO

1) Intangibility:

A person who is new to a bank and wants to open up an account in the bank cannot feel or taste it and ascertain whether the bank is good or bad before opening an account. He has to experience it, feel how the service is, how humbly do people or the staff members behave with him, is his money invested or put in a safe account or not. It is only then he would come to know about the services. Financial services are generally intangible but the service providers go to considerable lengths to tangibles the service for customers. Regular bank statements, credit cards, and insurance policy are all example of the way in which the banking services are presented to the customer. They can enhance the image of the service and the provider can bestow status or implied benefits upon the user as with a gold carpet. Physical reminders of the service product, brand name and value serve to reassure the customer and help the banks positioning.

2) Inconsistency:

This refers to variability that a company or an organization may depend on Inconsistency. For a bank, a new customer may not get the same type of service as much as a regular customer may get. This may be the case because the staff members know the person well as he comes often but they don't know that person who does not come in again and again. Also another point for inconsistency is that the service delivery by different people that is service is delivered differently from different types of people. Like in case of a bank, different staff members would provide different services. In the bank a person may be busy and may not attend to a customer as may be a person with the same work may attend to him with great enthusiasm. Example: “PUNJAB NATIONAL BANK” that promotes itself as “crown of quality for customer who is the king” and is an ISO 9002 certified bank. Thus it has to have consistency and quality to serve its customers.

3) Inseparability:

Inseparability is that characteristics of a service indicating that it cannot be separated from creator-seller of the product. Many services are created, delivered and consumed simultaneously through interaction between customers and service producers. This is a source of major limitation for the bank. But technology has in a big way helped the banks to cope with this problem.

4) Perishability:

Inventory relates to the perishable characteristics of the service marketing. If a customer starts his day at eight in the morning and ends it at four, but if bank is open only from 9:00 a.m. to 1:00 p.m. in the afternoon, then one might not be able to attend it. The demand for banking services also fluctuates by day and hour. The day before the holiday, weekend, most Mondays and Saturdays, pension and salary days are heavier than normal banking hours. So service faces a lot of problem from inventory as it cannot be stored, saved and then used later.

INNOVATIONS IN BANKING INDUSTRY

• ATM machines

• Tele banking

• Internet banking

• Credit cards

• Debit cards

• Mobile banking

• Smart cards

• E- cash

• Auto- swift facility

• Cross channel banking

MARKETING MIX

I. PRODUCT

II. Levels of service

Core

Product

Expected Product

Augmented Product

Potential Product

The basic necessity to use banking services in order to handle finance more efficiently

Timely service

Long banking hours

Low interest rates

Goods waiting rooms

Extensive ATM network

Promotional Discounts

Mobile and internet Banking

New Schemes tailored for specific customers

MARKETING ANALYSIS

The marketing analysis of the bank focuses the promotional campaign, the four P's of marketing are also in vision of the bank that it uses for its marketing (called 4 pillars) i.e., product, price, place (distribution) and promotion. For more lucidity they shall be explained briefly here.

.1 Product

The products at ABN AMRO are its various banking services, which are its Deposits (PLS and Non-PLS, Term Deposit), Remittances, and ATM & Credit Cards, Loans, Insuarace, Relationship privilege and Lockers etc. The Credit Extension is also a service.

.2 Price

The prices for various services of Bank are given in the booklet "the Schedule of Bank Charges". The prices at the bank are quite competitive with those of other banks working nationally.

.3 Place

The Bank has over 25 branches through which it offers services to its clients. The distribution channels are its employees who deal with customers.

.4 Promotion

Various promotional techniques as advertising, personal selling etc. are used. The promotional strategies of the Bank vary according to the market conditions

5.PEOPLE

People are the employees that are the service providers. In a banking sector the service provider plays a very important and determinant role in rendering the customers a satisfactory and a good service. It is extremely essential that the service provider understands what his customers expects from him. In banking sector the customer needs to be guided in a lot of matters which is possible only with the help of the service provider. The position in the eyes of the customer will be perceived by appearance, attitude and behavior of the customer contact employees. Not only the customers contact employee influence the customers but also the customer base of the organization does so.

6.PHYSICAL EVIDENCE

Physical evidence is the overall layout of the place. How the entire bank has been designed. Physical evidence refers to all those factors that helps make the process much easier and smoother. Most of the private and foreign banks portray a new welcoming and friendly look to the customer. Flashy cheque books with the name of the account holder printed, imaginative design of the bank brochure, statement of accounts with details of transactions are other tangible aspects.

Logos, symbols, attractive brand names etc. add to the customer's perception of service quality. There is an urgent need to implement technologies in order to raise productivity as well as to enable the banking system to cope with the increasing complexities of business.

For example in case of SCB portray a new welcoming and friendly look to the customers rather than drudgery banking counters. The physical evidence would be the placement of the customer service executive's desk, or the location of the place for depositing Cheques. It is very necessary the place is designed in such a manner so as to ensure maximum convenience to the customer and cause no confusion to him.

VII. PROCESS

Moments of Truth:

• Customer enters branch (Watchman)

• Security check (Security Man)

• Inquiry by customer (Banker)

• Interaction with banker (Banker)

• Fills form (Banker)

• Told will receive welcome kit (Banker)

• Customer leaves (Watchman)

The service sector has assumed greater economic importance over the past decade. India is fifteenth in services output. It provides employment to 23% Of work force, and it is growing fast, growth rate 7.5% in 1991-2000 up from 4.5% in 1951-80. It has the largest share in the GDP, accounting for 60.7% in 2006 up from 15% in 1950.

Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The elimination of this waste and meeting customer expectations are the major challenges facing managers these days in the service sector. This is why quality improvement is a vital concern for many service organizations.

This paper examines the salient features of service quality, GAPS Model, SERVQUAL. Each model represents a different approach to quality improvement. The primary aims are to enhance understanding of “service quality” and to identify models that managers in the service industry can employ to improve quality. Also will examine the applicability fo alternative measures of service quality in the developing economy of India and assesses related issues in that context.

Quality is increasingly being seen as a key strategic differentiator within the financial services sector, with most major players undertaking some form of quality initiative. The present paper describes work undertaken to determine both retail customer and staff perceptions of those factors which determine service quality. We initially identify the models developed by Parasuraman et al. as being the most appropriate for modeling the data, but find that although the service gap model provides an excellent basis for analysis, the SERVQUAL model is of more limited value. Hence, an alternative basis for modeling service quality based on the three dimensions of process/outcome, subjective/objective and soft/hard has been described and modeled against the experimental data. The paper describes some conclusions of significance for retail banking in particular, and service providers in general. This study investigates the role that technology plays in banking and its impact on the delivery of perceived service quality. A sample of 440 banking customers was taken and 300 useable questionnaires were analyzed.

The paper presents an empirical study of major quality improvement initiatives recently undertaken by two banks. It provides a useful comparison of the two different approaches, and contributes new evidence on the current debate concerning the validity of the SERVQUAL model. First, it outlines the implementation of the SERVQUAL model in the bank's subsequent quality improvement programme, as evidenced through the bank's customer satisfaction endeavors. Second, included for comparative purposes, the paper describes the adoption and implementation of the Crosby's total quality training programme. In both cases relevant evidence was gathered on staff attitudes. Given the long-term nature of these comprehensive quality programmes, any evaluation must necessarily be tentative, but both banks are able to report an improvement in service quality, and fresh evidence is provided in support of the SERVQUAL model.

The paper argues that one theme that has emerged consistently in the recent services marketing literature is the importance of frontline employees in service delivery. The internal marketing concept is based on the belief that a firm's internal market/employees can be motivated to strive for customer-consciousness, market orientation and sales-mindedness through the application of accepted external marketing approaches and principles. This paper considers that the objectives of the firm could be achieved by aligning them with the values to frontline employees

Today's Customers are more concerned about having a high quality experience of Banking. They expect atmosphere and entertainment and prefer banks with a personality rather than those perceived as offering a commodity. Quality of service is becoming an increasingly important differentiator between competing businesses in the Banking sector. In today's fiercely competitive marketplace, characterized by similarly priced, look-alike product offerings from a variety of Financial Institutions, clear winners will quality. Delivering quality to customers is paramount to a company's wellbeing because it results in more new customers, more business with existing customers, fewer lost customers, more protection from price competition, and fewer mistakes requiring the company to redo its goods/services (Albrecht & Zemke, 1985).

CUSTOMER EXPECTATIONS AND CUSTOMER SATISFACTION

Well, customer expectations are not hard to exceed one time or two times or three times. It's very hard to keep exceeding customer expectations. And don't forget, customer expectations are going up and up and up. With every good experience they have at some other firm, every time a customer buys something in a store where he's treated very well, his expectations of the next store increase. So your competitor's actions have just as much an inflationary effect on customer expectations as your own actions.

I was dealing with a client of ours just a few days ago, operating in an industry that has very low customer satisfaction in general. And their customer satisfaction is no lower than anyone else's in the category, it's on a par, but it's like a commodity services category. And we were counseling them that that's not the measurement that the customer's going to hold you to. They're not going to look at their satisfaction with you versus your competitors. They're going to look at their satisfaction with you versus other companies in their lives, in different areas, in different industries, companies that have higher levels of satisfaction, companies that get it right, all the time, much more than you and your category competitors do. So you can't simply think of what your customer's expectations are relative to your particular industry or your particular category of service.

The companies that have done it right and exceed customer expectations in the short and the long term generally have several traits. First, they take the customer's perspective. They try to see their business from the customer's perspective, looking at their business with an "outside-in" view, rather than from their product's perspective or their service's perspective, looking out at the customer. They put themselves in the customer's position and they ask themselves "how would I like to be treated if I were the customer?" and then they try their best to do that. Companies that do a good job inculcate that particular attitude in the minds of their employees and their customer contact personnel and their channel partners. It is an attitude that is based on thinking that the most important thing for our business is earning the trust of the customer.

ABN AMRO:. They're an analytically sophisticated company. They have millions of customers, and they track something like 20,000 individual customer segments. They have something called the behavioral-based modeling tool, which evaluates marketing initiatives in terms of not just the amount of profit or cash returned from the initiative itself in the short term, but also the effect of that initiative on the lifetime values of the customers exposed to it. That way they can evaluate their initiatives in terms of the overall efficiency of the initiatives, not just in the short term but the long term. This has led Royal Bank of Canada to develop some really interesting policies. For instance, everyone at RBC gets automatic overdraft protection. Everybody. You have to be a customer for 90 days, and you have to have at least one deposit in the last 30 days, with a good credit score. But this is true of the vast majority of its customers and if it's true of you, then after your first 90 days at the bank you get automatic overdraft protection. This means they won't return a check to you for an insufficient funds notice and a $35 service charge, like other banks would do, just because you miscalculated and overdrew your account by five dollars or ten dollars or even $50. Everybody's overdraft protection is unique to them, it's individually tailored. What Royal Bank of Canada has found is that overdraft protection like that tends to improve levels of customer satisfaction. It minimizes the costs of processing, all these things that minimize customer defections in the first few days or first few months of their new patronage at the bank. And it's been a win-win for everyone.

Quality Concerns Of Abn Amro

oTrue 24x7 banking

Finacle enabled zero downtime at both the central and branch level server, ensuring that ABN AMRO was up and running on a 24x7 basis, across electronic delivery channels and branches. Finacle's architecture also enabled offering of basic consumer banking services to customers, either during the planned End of Day (EOD) black out windows, unscheduled outages of the central data center of the bank or during disruptions in branch network connectivity.

Leveraging Straight-Through-Processing (STP)

Finacle provided an interoperable and open architecture that ensured tight integration with all delivery channels using standard message protocols. The powerful STP feature ensured that several transactions were completed end-to-end, without manual intervention. Turnaround times have drastically reduced for issuing cheque books and account statements, thereby enhancing productivity and customer satisfaction.

Unique extensibility features

Finacle's unique Extensibility tool kit comprising Scripting Engine, Workflow, and Remote Application Interface (RAI) provided the much needed flexibility to ABN AMRO Bank, enabling it to easily and rapidly add new business rules, launch new products, and modify processes. Using this tool kit, ABN AMRO developed a loyalty reward program for its customers wherein, the bank offered incentives like charge free demand drafts based on certain business rules like maintaining specified minimum balances. Such programs have helped the bank reap the twin benefits of customer retention and an increase in low cost funds. Some of the modules that have been quickly rolled out by ABN AMRO are:

FOCUS ON QUALITY BY ABN AMRO

ü flexibility translating into ease of customization,

ü availability of an integration infrastructure

ü multiple delivery channels and reduced TCO

ü Direct Sales Agent (DSA) Module:

To track the performance of Direct Sales Agents (DSA's) of the bank and have customized commission computation logic for the DSA's based on predefined parameters like product type, geography and hierarchy.

ü Complaint and Request Tracking System (CARTS):

To track customer request and complaints without manual intervention and assign priority, based on customer profile and severity of request, by seeking reference from the Finacle core banking database.

ü Card Management System (CMS):

This is a repository of customer card information and acts as a focal point in various events relating to cards, like issue, reissue and maintenance. An additional feature of this module is the ability to communicate on an online basis for activities like ‘hot carding' a card, activation/deactivation of cards, etc.

GAP MODEL OF ABN AMRO

Service Quality Model

The service quality model and the role of consumers' and learners' satisfaction is an essential part of service quality studies. The Disconfirmation Paradigm (Brady, 2001; Redman & Mathews, 1998), Parasuraman et al. (1985) enables the Service Quality Model to measure differences between consumers' perception and expectation of service quality.

According to the PZB model (Figure 1), there are five gaps:

I Gap - refers to the difference between customers' expected service and management's perceptions of customers' expectations. This gap means that management OF ABN AMRO may not correctly perceive customer expectations.

II Gap - refers to the difference between management perceptions of customers' expectations and service quality specifications. This gap means that although the people in management OF ABN AMRO level may perceive the correct expectations of the customers, they may not have suitable and sufficient service quality specifications.

III Gap - refers to the difference between service quality specifications and the real service delivery. This gap means that although the ABN AMRO may have suitable and sufficient service quality specifications, they may not have the satisfactory service delivery in the real situation. That may be because ABN AMRO lack well-trained employees to deliver satisfactory service.

IV Gap - refers to the difference between the service delivered and external communication about the service with customers. That is, the ABN AMRO may not have suitable and sufficient communication with the customers or the ABN AMRO may have commitments that exceed what they can do or they may not sufficiently inform the customers of what they have done.

V Gap - is the difference between consumer expectation and their perception of service quality - measured by the difference between what customers expect and what customers

SERVICE RECOVERY STRATEGIES USED BY ABN AMRO

* Suggestion Box and complaint Book are provided in all the branches. Any written complaint is instantly and promptly acknowledged.

* All branches other than small branches have " May I help you counters ".

* Counter staff are provided with training and additional inputs.

* If counter staff/Supervisor is unable to resolve a grievance, the branch in-charge intervenes and tries to resolve the issue.

* Customers' Day is observed on 15 th of every month. On this day branch in-charge will make himself available at the branch between 3 p.m. and 5 p.m. to meet customers without any prior appointment.

* Customer Service Committee meetings is held every month at all Branches, Circle Offices. The sole task of the

* Committee is to find out ways and means to render service to the satisfaction of the Customers. For this purpose

* Committee will meet regularly at stipulated intervals to discuss in detail the strengths and deficiencies of the services presently rendered and take steps to improve it.

* Special Customers' Meet is conducted on special occasions.

Every year, Customer Fortnight is observed to create awareness among Public as well as staff for achieving the objective of Complaint free branch network and also highlight our products and services

POSITIONING MAP OF ABN AMRO

BANK A-ABN AMRO BANK BANK

BANK B-BANK OF BARODA

BANK C-CANARA BANK

BANK D-HDFC BANK

BANK E -AALAHABAD BANK

BANK F-STATE BANK OF INDIA

ANALYSIS OF POSITIONING MAP:

The perceptual map above captures a focus group's attitudes, perceptions, and beliefs regarding the level of customer service at local banks. This map summarizes those thoughts in a form which is easy to understand, and allows these attitudes and perceptions to be compared. Attitudes towards Bank A can easily be compared to Bank B in relation to speed of service, product knowledge, interest rate given on savings accounts, products offered, convenience of ATM locations, and opening hours.

1. ABN AMRO products is less innovative than its competitors, therefore ABN AMRO should focus on new innovative products and services in the market.

2.There should be also be focus on opening hours of bank as bank have lately hours for opening bank i.e. focus on early opening hours

3. ABN AMRO employees are well trained and qualified and efficient in their work also better than its competitors, automatically increase customer satisfaction.

4. Also The product knowledge of Employees are too good than its competitors. Therefore ABN AMRO is good in building brand loyalty and increase customer base.

DRAFTING OF SERVICES BLUEPRINT OF ABN AMRO

v Service Blueprinting

Precise definition of the service delivery system that allows management to test the service concept on paper prior to implementing the real system

Map or flowchart of all transactions constituting the service delivery process

ü Information processing activities

ü Interactions with customers

ü Decision points

Front Office

Design of customer experiences

Design of customer co-production/scripts

Design of employee activities, scripts

v Line of Visibility

What can the customer interact with? What can't the customer interact with?

v Back Office

Design of processes that the customer does not interact with Efficiency oriented

May require development of industry standards

Faster check clearing (universal check processing codes)

Inventory management (UPC symbols)

STAGE I:

When customer enters the building of ABN AMRO Bank and fulfill ite enquiries in “MAY I HELP U”

STAGE II:

After it, gives the application for loan to the bank

STAGE III:

After giving application, the data given by customer is verified by the department.

STAGE IV:

Pass the loan application verified by department passes to credit beaureu

STAGE V:

After satisfying credit bureau, customer issues cheque to bank

STAGE VI:

After it, final payment is made to customer.

ANALYSIS OF BLUE PRINT OF ABN AMRO (STANDARD SET BY BANK)

TRANSACTION COST INCURRED TIME TAKEN

LOAN APPLICATION 100 20

VERIFY OF DATA 70 40

CREDIT BEAUREU 45 30

ISSUE OF CHEQUE 15 46

BRANCH RECORDS 17 23

FINAL PAYEMENT 10 13

TOTAL COST AND TIME ---------- ------------

TAKEN 257 172

ACTUAL COST AND TIME TAKEN

TRANSACTION COST INCURRED TIME TAKEN

LOAN APPLICATION 110 25

VERIFY OF DATA 30 40

CREDIT BEAUREU 56 25

ISSUE OF CHEQUE 44 51

BRANCH RECORDS 20 23

FINAL PAYEMENT 25 16

TOTAL COST AND TIME ---------- ------------

TAKEN 285 180

Service cape of ABN AMRO

When a service encounter requires a close interaction between the customer and provider the services cape must be facilitate this interaction. An interpersonal servicescape is appropriate. Hotels, hospitals, schools and banks are examples of this type of services capes, they must be designed to attract, satisfy and facilitate the activities of both conducive to the interaction between the two.

PROVIDED BY ABN AMRO:

ü For their clients they strive to provide excellent service

Without their clients they have no business. They aim to be the proactive and trusted financial partner in all phases of their clients' lives. They listen to their clients and offer customised and state-of-the-art advice and service, based on their vast expertise and extensive network.

ü All branches other than small branches have " May I help you counters ".

ü Safety of Funds- Secured ATMs-

ü Reputation of Bank among customer

ü Personal attention

ü Pleasing manners,

ü Confidentiality

ü Closeness to work,

ü Timely service

ü Friendly staff willing to work.

EMPLOYEE AND CUSTOMER ROLE IN SERVICE DLIVERY

ü ABN AMRO appear extend through different distribution channels. The role of branch banking has changed to provide advisory services and sell the banks' products and service which is an approach involves the people interactions. Service employees are associated with the organization service quality and customer satisfaction. A comprehensive human resource strategy thus can help the organization develop a more customer-orientation employee, in order to deliver service quality. With the help of the human resources strategies wheel, how a bank develop people to deliver service quality will be showed, which finally lead to the purpose of this paper - revealing the importance of people on delivering service quality.

ü Its decentralized organization which focuses on the interplay between strong branches, highly-trained specialists and efficient support functions is useful to this research. Through face-to-face interview with branch managers, a holistic view of the situation in bank will be showed, additionally, detail information can be digging out.

ü The human resources strategies used by ABN AMRO is a process generally including hire the right people, provides effective and sufficient training and needed support systems, retain the best people. As a result, this research indicates with the service culture which establishes deeply inside the organization; ABN AMRO realizes the important of people on delivering service quality. And then by choosing the right people, training them, supporting them, and retaining them as a serious of human resources strategies, the service quality is delivered. In addition, the authors find out the relation among service culture, human resources strategies and people work as a triangle, constraining and assisting each other.

ü Differentiate themselves through innovative and distinctive customer service;

ü Improve customer experience, contact center agent productivity and service process efficiencies;

ü Generate revenue through better online conversion as well as contextual upsell and cross-sell at the point of service;

ü Reduce escalations, unwarranted product returns and field visits, while reducing overall service costs;

ü Improve self-service effectiveness and adoption through multiple information access methods or what we call "multi-modal self-service

INTERGRATED MARKETING COMMUNICATION

1 Advertising

Advertising in News Papers and Television is used as a marketing tool. However, it is often used when a new product is introduced.

2 Selling Points

There are various Marketing Strengths of the Bank, which are promoted in order to attract customers, both for deposits and corporate clients.

.3 Various Information / Marketing Broachers

The Bank publishes various introductory brochures for the general guidance of the customers. These include the Schedule of Bank Charges, VISA Card Information, and Savings & Term Deposit Information etc.

.4 Personal Selling

Personal selling is also a norm at the Bank. The branch has well learned sales executives i.e., Business alumnae. Personal selling is used both for attracting individual and corporate clients. Different areas have been assigned to different sales executives, and a scheduled report is made for all calls made. These are the marketing activities that the bank projects in order to stay alive and prominent having an identification of its own in the market and to attract more customers.

DEVELOPING SERVICE THROUGH INTERMEDIARIES BY ABN AMBRO

Functions Performed by Intermediaries OF ABN AMRO

ü Co-producing the service

ü Making services locally available

ü Functioning as a link between the brand and the customer

Types of Intermediaries IN ABN AMRO

o Agent

o Selling --- contractual authority to sell

o Purchasing--- purchase for a buyer

o Facilitating --- help with marketing process

o Brokers --- bring buyers and sellers together

o Electronic Channels --- do not require human interaction

o Franchises --- Service outlets licensed by a principal to deliver a unique service concept it had created or popularized

Queue discipline IN ABN AMRO

A queue discipline is a priority rule or set of rules for determining the order of service to customers in a waiting line. The rules selected can have a dramatic effect on the system's overall performance. The number of customers in line, the average waiting time, the range of variability in waiting time, and the efficiency of the service facility are just a few of the factors affected by the choice of priority rules. Probably the most common priority rule is first come, first served (FCFS). This rule states that customers in line are served on the basis of their chronological arrival; no other characteristics have any bearing on the selection process. This is popularly accepted as the fairest rule, although in practice it discriminates against the arrival requiring a short service time.

PRICING OF SERVICES OF ABN AMRO

Value pricing: This type of pricing is mainly done by ABN AMRO unique or different products or schemes. They usually charge a combination of high and low prices depending on the customer loyalty as well as the products. This type of pricing strategy is usually coupled with promotion programmes.

Cost plus pricing: In cost plus pricing a detailed analysis of cost structure of ABN AMRO products and services is done.

Going rate pricing: The most pricing technique is going rate pricing. In going rate pricing the banks bases its price largely depending on the competitor's prices. ABN AMRO however have to stay within the RBI directives and compete. The banks may charge higher or lower than their competitor

Market oriented approach: This indicates what the market can bear or accept as in case of a corporate client who may not be price sensitive as against an individual client.

Competitive based pricing: In competitive based pricing, the price is decided on the competitor's price ie.HDFC and ICICI

MANAGING WAITING LINES

ü Account holders and customers of the bank logged in queries by calling an agent directly or through the touchtone interactive voice response (IVR) system installed at the contact centre.

ü The bank's Direct Channels Interactive Banking division recognized a business need to make call handling more effective.

ü ABN AMRO's decision to move to a call routing system based on speech technology was therefore strategic

ü easing customer interactions over the phone

ü reducing costs in the customer contact centre by routing more calls directly to

the right self service or agent capable of answering the call

ü using technology to raise sales effectiveness and maximize the impact

of the bank's investment in sales processes and training.

ü Differentiate themselves through innovative and distinctive customer service;

ü Improve customer experience, contact center agent productivity and service process efficiencies;

ü Generate revenue through better online conversion as well as contextual upsell and cross-sell at the point of service;

ü Reduce escalations, unwarranted product returns and field visits, while reducing overall service costs;

ü Improve self-service effectiveness and adoption through multiple information access methods or what we call "multi-modal self-service

Conclusion

ABN AMRO has realized for some time that focusing on the customer is an important if not crucial determinant of their success. By offering solutions to manage customer information more effectively, integrate and coordinate multiple delivery channels, improve the efficiency of core processes driving the business and leverage relevant opportunities to cross-sell other products and services, TIBCO is helping banks establish, grow and maintain healthy customer relationships in order to remain competitive and grow market share. The future for customer-centric banks looks very bright.

BIBLOGRAPHY AND REFERENCES:

http://www.brg.ca/Sandiegoperceptualmap.htm

www.abnamro.co.in/

https://cardsonline.rbs.in/ -

toostep.com/profile/sumantra_sarkar

www.ccavenue.com/content/indianrupees.jsp

www.a-teamgroup.com/.../abn-amro-negotiates-challenges-of-centralised-data-distribution

resources.bnet.com/.../abn+amro+and+banking+and+royal+bank+of+scotland.html

www.allbusiness.com/company-activities.../13256495-1

www.docstoc.com/docs/.../Target-Market-Segmentation-and-Products/

www.abnamro.com/transition/future-bank.cfm

http://findarticles.com/p/articles/mi_6771/is_1_4/ai_n28532451/

Book referred:

Service Marketing by PHILIP KOTLER AND OTHER JOURNALS ON SERVICE MARKETING

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