Western Union Outward Remittance Business Essay

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Public Bank Berhad founded by Tan Sri Dato Sri Dr. Teh Hong Piow in year 1966. The name of Public Bank conceptualized as a bank for the public. Today, the Public Bank Berhad is a leading banking industry in Malaysia with overseas market in Cambodia, Vietnam, Laos, Hong Kong, China and Sri Lanka. As the end of year 2012, Public Bank is the third largest banking industry in Malaysia and ranked at top six by asset size with total RM274.62 billion in Southeast Asia. Besides, Public Bank is also is the largest non-government-linked company in Malaysia. Vision of Public Bank is to be the Top 100 Bank in the world and the mission is to sustain the position of being the most efficient, profitable, and respected premier financial institution in Malaysia.

1.0.2 Company Philosophy

The Public Bank Berhad's philosophy is care their customers by providing the well-mannered and efficient service in every activity of its business and being innovative in their new banking products and service development. Public Bank Berhad care for its employees by promoting their staff through remuneration and extreme benefit and providing staff training and development and opportunities for career advancement. For caring its shareholders, Public Bank Berhad consolidates its position as a stable and efficient financial institution and generates profits and returns back a fair return on shareholders' investment.

1.0.3 Company Principal Activities

Public Bank Berhad provides a wide range of financial products and services to their customers. It included personal banking, commercial banking, Islamic banking, investment banking, share broking, bancassurace, trustee services, nominee services and general insurance products.

Personal banking is banking, investment and other financial services which execute directly to customers. These services include credit and debit card, deposits, loans, internet banking and others. Commercial banking provided by Public Bank Berhad to customers is to help finance customer's businesses in every possible area. These services include business financing, cash management, commercial cards, and others service like banker's cheque.

Islamic Banking is offering Islamic banking products and services to customers. It focuses on customer and retail financing, small and medium enterprise as well as financing and deposit taking business.

Investment banking of Public Bank Berhad provides a number of types of investment to customer and to help them manage their finances.

1.0.4 Strategy to Competence among Competitors

In banking and financial services industry, every company has to develop their strategy or significant competitive advantage to compete with their competitors. Public Bank Berhad adopts a strategy which is focus and consistent growth. The company pursues organic growth in retail banking business focusing on retail customers and small and medium size enterprise, and increases its leadership in today's banking industry. Growth in the retail banking business is always focuses on retail lending, deposit-taking and fee-based businesses. In order to drive it business growth and increase its market share, Public Bank Berhad control its customer service infrastructure and processes and practices to deliver the reliable service to meet the customers' needs.

2.0 Company's Production/ Operations Processes & Facility Layout

2.0.1 Production/Operation Process

There are two types of service offered by Public Bank Berhad which are debit and credit. The processes under debit are saving account and Unit Trust. While for credit, the processes include hire purchase, loans and others.

The diagrams below are the production processes flow of Public Bank Berhad. Open a saving account.

Open saving account.jpg

When a client wants to open a basic saving account in Public Bank, the steps involved in the diagram is needed. Firstly, client has to take a number and wait for his turn to be called to the service counter for opening a saving account. Client is required to fill in the information in the requirement forms or documents. Next, client has to show the Identity Card and give the photocopy of the Identity Card to the staff. Then, client is required to pay minimum RM20.00 as initial saving to open and activate an account. After the account is verified and approved, a saving passbook will be given to the client and he/she could start using it anytime. Strengths and weaknesses

There are several strengths of opening saving account process in Public Bank Berhad. The process can get to be done in a short and efficient time since there are only very few steps involved in opening saving account. It is not time-consuming and convenient to apply for saving account. Temporarily, there is no any weaknesses have been found in this production process as it the current flow is very useful and helpful for the bank. Unit Trust Funds.

A unit trust is a financial vehicle which individuals may invest their money. Investing in unit trust offers investors several of advantages which are professional management at low cost, safety through the spreading of risks, liquidity, ease of transaction, and capital appreciation. Public Bank Berhad has a range of unit trust funds which are managed by Public Mutual Berhad, currently the largest private unit trust company in Malaysia with more than 20 years experience in fund management. The diagram below shows the processes how to start investing a unit trust of Public Bank.

Unit Trust INVESTMENT.jpg

First of all, customer is required to complete a new investor form before starts to invest unit trust. Customer has to show the original Identity Card to the staff, and a photocopy of Identity Card is needed to be submitted together with the form as well. After that, a cheque or cash with minimum RM1000.00 is needed to be enclosed by the customer as an initial investment to start investing unit trust. Cheques must be made payable to Public Mutual Berhad. The servicing agent will help to submit the application form and initial investment to Head Office. Lastly, once customer has completed the application form submit together with the cheque made out to Public Mutual Berhad, customer is considered to be the unitholder of the selected fund which is unit trust, also known as mutual fund. Customer may add on to his/her existing investments on a regular basis. RM100.00 is the minimum additional investment for most of the unit trust. Customer could make the investment at any Head Office, branch offices or at Public Bank and Public Finance branches or at any collection centre throughout Malaysia. Strengths and weaknesses

Public Mutual is a wholly-owned subsidiary of Public Bank, its financial strengths and good tracking record is well-known in the investment industry as it subscribes readily to the Group's excellence-oriented corporate culture and high standards of financial integrity in the management of its unit trust funds. While the main weakness of investment process is the related documents are needed to be passed through not only one party, it may cause the missing of important documents and also the money. Western Union Outward Remittance.

Public Bank and Western Union Company is the global leader in international money transfer services. Customers of Public Bank can send money and receive money in cash through Western Union to more than 355000 service provider locations in over 200 countries and territories just within 2 minutes and this is what they called "Cash In Minutes".

Western Union Outward Remittance.jpg

The diagram above shows the operation process of remittance of Public Bank's customers through Western Union.

Firstly, remitter, the customer who wants to do money transfer, has to go to the nearest branch of Public Bank and complete the remitting slip. Next, submit the completed form, money and relevant documents such as the amount of money that remitter want to send, and also the necessary transfer fees, together with remitter original Identity Card. The maximum amount that can be sent and receive is RM10000 and RM50000 per transaction respectively and there is no bank account is required to send or receive money under this service. Remitter is required to sign a receipt with handling password which helps to track the status of the money transfer online and it will be given to him/her. Then, remitter has to inform the payee, the person who will receive the amount of money, of the handling password. Once the steps are finished and the payee's info is verified, the transaction is completed. Strengths and weaknesses

Transfer money within minutes is the strongest strength of Western Union Remittance. It is very convenient for those businessmen or customers who need the amount of cash urgently as the process of remittance takes only few minutes and they can get the money in time and efficiently. However, there are also some problems might be faced during this process. The receipt with handling password may be lost easily since it is very difficult to keep it. Besides, the errors might be occurred while the remitter is informing the payee about the password because of typing mistakes or wrongly send the message through oral way. Home Loan.

Public Bank offers the home loan at easy installment payment system by giving the loan seekers with ease of paying. There are 2 types of home loan plans with variety of financial packages of 5 Home Plan which the customers can choose according to their conveniences. The financial packages are Equal Monthly Installment Package, Fixed Monthly Installments Package, Graduated Payments Package, and HomeSave Package. The processes involved in applying for home loan are as shown in the diagram below.

Home Loan.jpg

The first step involved in applying for home loan is customer is required to fill in the application form. After successfully filling the application form, the relevant and required documents have to be submitted to the bank together with the application form. The bank will establish the repayment capacity based on the information of applicant such as income, age, experience and so on, then if the applicant is qualified, the sanction and offer letter will be given. After that, all the legal documents of the property involved for applying home loan have to be submitted. The bank will do the legal checks on the property. The final step is that the applicant will be asked to sign the final agreement of the home loan and he/she will get the loan. Strengths and weaknesses

One of the strengths of home loan process is the bank will examine the information and qualifications of applicant in order to prevent any mistakes will happen. After the documents are checked legally and carefully, the loan will only be approved. This is a very cautious process and also considered as strength of home loan process. Nevertheless, the process of applying for home loan normally takes 5 to 7 days to get the full approval, and customers will get the loan 4 weeks from the approval is given. This takes a lot of time and many processes are needed to be gone through. Furthermore, the important and relevant documents have to be passed through many hands and it will cause the loss of documents as well. Recommendations of Production Processes

In order to maintain the strengths and improve the weaknesses for the 4 types of process, here are some suggestions for Public Bank which may be helpful to upgrade the flows. In order to prevent the loss of important documents or money of customers while handling and checking by the staff, the bank should possibly make the steps become easier so that the staff will not get confused and can be more concentrating on handling the documents during the process. Regarding to the loss of receipt with handling password, banker should provide another copy of receipt for the payee via email or mobile phone. This can help to reduce the incorrect information happen and the work can be done effectively. Hence, the company will be able to gain good reputation and image. Conclusion

Every production must have been gone through many processes to produce products or to make the jobs work out. The reason that the production process is important to the company is because the works must be done methodically. Every step has to be made clearly and carefully during the process so that if errors happened, it is easier and more convenient for the staff or managers to find out where and how the problems occurred. Besides, it is time-saving and jobs can be work out effectively through different processes. Therefore, the customer will stay loyal to the company because of their decent, satisfied and effective production processes. This will help the company gain more and more customers in the future.

2.0.2 Facility Layout Diagram of facility layout





Bank Teller

Bank Counter


Customer Service Representative



Figure 2.1: Facility layout of Public Bank Berhad in Kampar Branch. Description of the Facility Layout

Layout is one of the important factors that lead to the long-run efficiency of operations in Public Bank Berhad. A layout that is improperly designed will lead to operations inefficiency among employees and customers. Hence, a good layout will lead to efficiency in operation management. The objective of layout strategy is to fulfill the organization's competitive needs in a cost-effective and cost-efficient manner.

According to the layout Figure 1, bank teller is located at the right hand side of the bank office. The bank teller is the first person customers always seek to as they enter bank. The bank teller deals with the customer directly in order to assure the customers that they entered the "right" bank and to ensure that they had their best visit possible. The bank teller also functions to guide the customers to the respective counters accordingly. However, there is a limitation for this teller. The teller is located far from the entrance compared to the service counter. Since teller should be the first person customer encounters as they enter banks, hence the placement of the teller is improper.

The service counter is located at the left corner once a customer steps in. This layout then shows that Public Bank Berhad emphasis on services provided to customers as it is the first counter that customers encounter as they step in the bank. This is a strength of the layout because customer service counters are able provide information and solve the enquiries of customers. The service counter also helps the customers in handling their problems. The service counter will then refer the customers to appropriate counters for further assistance if they are unable to assist the clients. The service counters functions to provide information regarding the service customers requires and enquiries.

The bank counter located at the back part of the bank functions to manage financial issues such as money withdrawal, money deposit, cheque, account saving enquiries and investment issues. The employee behind the desk functions to handle the personal financial enquiries of customers. This includes helping customers to issue cheques, input money into fixed deposit and many other investments, money exchange into other currencies, and money exchange into smaller amounts. They also function to update the passbook information, trading transfers, and sell bank draft. The weakness of this bank counter is that there are insufficient numbers of counters available.

Office in which the managers and clerks work is situated behind the bank counter. The planning of the office in this layout is strategic. Confidential corporate documents and database are situated in this office. The employees of this office functions to serve "high-class" customers which consists of many corporates and to assist the bank counter if there are problems to occur. They also functions to file and assess the documents of the bank counter. However, further information regarding the job scope of this office is unclear as the manager is unwilling to provide more information as they are confidential.

The layout of the second floor consists of three offices, a conference room and a bank counter. This bank counter handles issues of higher purchase, loan and mortgage. This bank counter manage loans such as housing loans, car loans, business loans, property loans, education loans, and personal loans. However, the limitation of this is that the lack of information regarding this counter.

One of the offices in the second floor is used for loan department. Loan department functions to check the background of the customers requesting for loans, mortgage and higher purchase. The loan department functions to ensure that the customers requesting for loans are credible and able to return the loans. Information such as process and details of the loan department are confidential and are not available for this assignment.

3.0 Study Area's Literature Review and Contribution

3.0.1 Nature of service

Service is intangible, inseparable, variable and perishable (Gronroos 1978 as cited in Sharaf M.A.2010). In many cases, the customers are part of the service process. Service is different depending on who provides the services to whom and when and where the delivery of the service takes place. Service cannot be stored or inventories and are perishable.

3.0.2 Service Development

Ojasalo work (as cited in Sharaf M.A.2010) showed that the focus of current service development is aligning business goals with service design. Business leaders need to identify business goals such as increasing productivity and cutting costs and link them to service design to remain competitive. Service design involves understanding service process and delivery channels that meet customers' needs and requirements (Ojasalo, 2009).

Schmenner work (as cited in Sharaf M.A.2010) develops a model to classify services based on the two dimensions. Firstly, it is the dimension of classification. Schemenner (2004) classified the service landscape into four quadrants based on relative throughput time and degree of variation. The relative throughput time is how quickly a service encounter can be rendered relative to others in the industry (service productivity). The degree of variation is how much customization is necessary for the service provision (service interaction).

A high relative throughput times requires intense labour per transaction to provide a high degree of variation such as professional service (law firms and accountants) or a low degree of variation such as mass services (retail banking and wholesaling). According to Schmenner, a low relative throughput time require less labour per transaction to provide a high degree of variation such as a service shop (hospitals and repair shops) or a low degree of variation such as a service factory (airline and hotels).

The banking industry is the mass service that requires a high relative throughput time and a low degree of variation. According to Schmenner (2004), mass services require a low degree of variation in the service delivery. Bank leaders might provide low service customization for each customer. In contrast, service providers are required to pay attention to employee capacity to service and handle customer needs.

Secondly, it is the dimension of optimization. Schmenner (2004) provided that the service providers strive to increase service productivity by minimizing the relative throughput time (labour) and degree of variation (customization) to reach the service factory level of operations. For the banking services, the throughput time is high, organizational leaders might focus on reducing bottlenecks and removing service process wastes, such as counting and recounting cash during the deposits and withdrawals or verifying customer identity.

Leaders must take into consideration the degree of variation, such as charging different customers different rates based on service types, and provide an even flow of the service delivery process. It provides the optimal service operations (high productivity) and service interaction (high customization) that organizational leaders might seek to reach to enhance overall services (Schmenner, 2004).

3.0.3 The role of technology

To achieve higher productivity and customization of service delivery, bank leaders were historically required to open branches with many trained service desk employees to handle customer-specific services. All service encounters traditionally took place in the presence of an employees and a customer (Bitner, Booms & Teteault 1990 as cited in Sharaf M.A.2010).

With the increase of labour costs and innovations in technology, more service providers shifted to self-service technologies (Dabholkar 1996 as cited in Sharaf M.A.2010). The use of technology allowed service providers to use technology to overcome operational expenses and address customer-specific needs. Eyadat and Kozal 2005 (as cited in Sharaf M.A.2010) found that the use of technology correlated positively with profitability in the banking sector.

Technology -based services are technological interfaces that enable end-users to take advantage of a service without any direct employee intervention (Mueter et al., 2000 as cited in Sharaf M.A.2010). A service encounter is an interaction between a customers and a machine such as ATM, Internet site, or interactive voice response system, and service providers focus on systems rather than employees and system functionality rather that employee's interactions.

The use of technology provides business leaders with three main benefits (Pasasuraman 2000 as cited in Sharaf M.A.2010). First, leaders can communicate more efficiently, develop new product and services, and analyse customer behaviours with the support of computing technologies. Second, business managers can interact with employees via an internet and a knowledge-based database despite geographic locations or time barriers. Third, the use of technology allows an employee to interact with a customer via technological interfaces such as ATMs and e-services.

3.0.4 Innovation in Financial Service

Alam work (as cited in Schirr, Gary R., 2008) identified six objective for user involvement in new service development: (1) a better new service that matches customers needs; (2) reduced development time; (3) facilitate user education about new services; (4) rapid diffusion of innovations; (5) good public relations; (6) assists a long-term relationship with clients. Collaboration strengthens customer relations by developing customer-friendly products (Lilien et al., 2002 as cited in Schirr, Gary R., 2008).

There have been multiple studies of success factors in bank new service development. New service development is largely informal in its early phases (Kelly and Storey 2000 as cited in Schirr, Gary R., 2008). Customer support staff should [lay a significant role in financial services innovation (de Brentani 1993 as cited in Schirr, Gary R., 2008).

Market research is often a missing ingredient in new service development at financial service firms (Cooper et al., 1994 as cited in Schirr, Gary R., 2008). In a follow-up article to "Evolving a New Dominant Logic for Marketing", (Virgo and Lusch 2004), they argue that large established service firms could be misled by traditional goods-dominant marketing logic. Such service firms, such as banks, hospitals and universities, are likely to be guided by good dominant logic and are just as likely to miss the customer's roles in value creation as are their goods-producing counterparts (Vargo and Lusch, 2006).

3.0.5 NSD for Internet Service

The key role of a customer as co-producer of a service (Grove and Fisk 1983 as cited in Schirr, Gary R., 2008) affects the success of the service event and can lead to a stronger producer-customer relationship (Rodie and Kleine 2000 as cited in Schirr, Gary R., 2008). A study of technology infusion in service encounters indicated that change can be positive if producers "closely involve customers in the design process" (Bitner et al., 2000).

Growth of the internet has accelerated self service development and helped firms improve employee communication, forge strategic alliances and strengthen relationship with customers (Parasuraman et al., 2002).

3.0.6 Impact of Office Design on Employees' Productivity

Many authors have noticed that the layout of the workplace along the management process is a major role in improving employees' productivity and organizational performance. (Uzee, 1999; Leaman and Bordass, 1993; Williams et al. 1985). Better physical environment of office will boosts the employees and ultimately improve their productivity. The American Society of Interior Designers (ASID, 1999) had revealed that the workplace design is one of the top three factors which will affect employees' performance and job satisfaction.

3.0.7 New Service Development Process

New service development process can be defined as process models. The development phases have to be accomplished from the initial idea until the final launch of the service (Bullinger and Schreiner, 2006).

In the service development process, the first phase is generates new service ideas. Those ideas are analyzed in terms of costs and time needed and also the probability of risk. After the evaluation, choose the low cost and time required and low risk idea as the promising idea to perform it. (Song et al., 2009). Thereafter, design the specification of the new service. For example, resources required to process, the service delivery process, market measures of the service and expectation of the performance as well. The necessary resources are needed to allocate in the task in order to perform the test of the service specifications. (Bullinger and Schreiner, 2006). If there is any possible weaknesses happen, the test has to re-perform until the specifications have passed the test. At the end, the successful specification is finally can introduce to the marketplace as a new service.

3.0.8 New Development Success Factor

In service industry, providing a better or unique product or service can be achieved in various ways such as making it adaptable and updatable to specific and changing customer needs, using innovative technology (Cooper et al., 1994), providing superior quality (Easingwood and Storey, 1993), or offering superior core attributes and supporting services (Melton and Hartline, 2010).

Successful services are suit to their designated markets (De Brentani, 1991, De Brentani, 1989) and customers (Cooper and de Brentani, 1991, De Brentani, 2001) and also are compatible with the others product in organizations, marketing strategy (Easingwood and Storey, 1993), resources (De Brentani, 1989) and capabilities (Ottenbacher and Harrington, 2010).

According to Neu and Brown (2005), the expertise of employees has been identified as one of the important factor which will impact the NSD performance. In order to gain customers trust, service personnel should show their strong behavioral competencies. Employees are able to make a difference whenever they are in direct contact with the customer by exuding motivation (Neu and Brown, 2005), friendliness, courtesy, and efficiency (Cooper et al., 1994). Moreover, the ability to understand the customer's problems and needs is essential to fulfill their expectations of the service offering.

3.0.9 Service Characteristics

Service consists of three characteristics. It includes inseparability which is the production and consumption happen at the same time, heterogeneity which refer as the requirement for human effort and interaction, and perishability which explained as the service cannot produces at advance and to be kept for the future use. (Locklock, 1983; Zeithaml et al., 1985). Service characteristics can define what and how of an innovation effort, and help identify the key factors of NSD. It is necessary to understand by a service firm in helping them realize how service characteristics may be used to develop strategic efforts in innovation.

3.0.10 Five Dimensions of New service development competence

There five dimensions which will reflect a firm's competence in NSD are NSD process focus, market acuity, NSD strategy, NSD culture, and information technology (IT) experience.

The first dimension, new service development process focus indicate as a set of activities or tasks for carry out new service development efforts which allows to leading greater new service development efficiency and effectiveness.

Next, second dimension is market acuity. It explained as the ability of the organization to understand well their competitive environment and overcome and response to what their customers' needs and wants. (Roth, 1993: 22). 

The third dimension, new service development strategy enables the organization's management to plan and construct the suitable resources for the new service development efforts. The firm's new service development strategy also must be

related to the organization's overall business strategy.  (Cooper and Edgett, 1999, Griffin, 1997 and Sunbo, 1997).

The fourth dimension, new service development culture is the organization's values and beliefs in a willingness and desire to innovate and the last dimension is information technology experience. Information technology (IT) is creating and sustaining the organization competitive advantage.  (Price, 1998 and Ross et al., 1998). Fiedler et al. (1996) . Information technology advancement is also able to enhance the information processing and coordinate activities in operating environments.

4.0 Discussion and Conclusion

By developing new service development, bank leaders can gain an economy of scale by increasing fixed cost in the technology infrastructure to minimize variable cost in transaction. Besides, the bank can enhance its competitive position by effectively using the new service development in technology. Bank leaders can collect customer information for effective use by management and also gain market shares and knowledge ahead of the competition.

Moreover, customers might benefits from new service development in technology because of control, speed, convenience, ease of use, and enjoyment. They control over banking needs in term of when, where and how to produce the service. Customers might be attracted to the service that saves their time, money and effort. Besides, customers might save bank trips and waiting time in teller queues.