Barclays bank was first incorporated 300 year ago in Lombard Street in the centre of the London’s financial area, UK. It is among the biggest financial institutions with operation in Europe, USA, South America, Asia and Africa as well. It operates in more than 60 countries with about 140,000 employees and annual revenues above $30billion.
We Write Essays for Students
Tell us about your assignment and we will find the best writer for your paper
Get Help Now!The company has seen consistent growth for a long time with few downturns in its operating life cycle. The company has consistently grown from one branch in London to the current more than 4,000 branches distributed worldwide. One of the main strategies that Barclays has always applied is innovative thinking and intelligent adoption of technology. For example, it was the first bank in UK to purchase a computer in 1959 and ten years later it became the first to set an automatic teller machine (ATM). Later in 1990s, the bank was the first to introduce a website and ‘drive thru’ cash machine. Today, it is among the banking industry giants with on-line banking with around 8 million registered customers (SAP AG, para1).
Technological and innovative changes
It is not wrong to conclude that Barclays has undergone transformational changes for many years. It has revised its mission to be one of the world’s most preferred financial service institutions and be recognized for innovative and superb customer focused services and ensuring successful careers for its employees.
Technology plays a very important role in the banking sector by ensuring that services are delivered to the convenience of customers. Barclays recognizes this and in 1998 it replaced the old financial system with the current system known as SAP. The motivation was to ensure that the company’s banking system was based on the current technology where real time banking is the industry norm. SAP was more compatible with other bank’s strategies which were drafted to ensure success of the banks in its goals and objectives. At the initial stage, a pilot project was carried out where SAP was used to integrate thirteen different general ledgers from various business units. Barclaycard, Consumer Lending, Barclays Insurance Services and Barclays Life business units were integrated and improved customer service delivery. When they were successfully executed the bank rolled out to other business units and by the 2000 all the business units were fully integrated (SAP AG, para3-4). The benefits of the integration have been enormous. The company managed to reduce the operational costs associated with old technology such as queuing and long time taken to process transactions. As such, there was increased turnover and improved customer satisfaction. Similarly, the company used the SAP to develop an integrated electronic data interchange system. Through the system, operational efficiency and optimization became possible. As such, various aspects of e-commerce such as regional coordination and performance comparisons as well as branches’ accounts coordination were enhanced. Further, the international money transfer has been greatly enhanced with the technology, thus improving the company’s income from international wire transfer services.
Global economic uncertainties, political instability in some countries, unpredictable financial markets and altered regulatory conditions have created increasingly harsh and competitive business environment for financial institutions worldwide. For example, the new laws in Europe are demanding changes in the capital requirements for banks, and the US new legislation demanding strict corporate governance observations and an endless stream of emerging accounting rules have contributed to the difficulties the banking sector is currently facing (Barclays Capital, para4).
In attempting to address these challenges the bank formulated a Value Based Management (VBM) strategy which has shaped the way decisions are made and how the company is organized. VBM is aimed at ensuring that whatever is done in the company creates economic value for the company and all activities of the Strategic Business Units are measured against the VBM. Today, Barclays has a single SAP system that provides a constant platform in all its businesses. Real-time information is now possible which is important in moving towards the goal of offering quick and true services.
Another major transformational change that has occurred with the Barclays is changing from being retail banking to being investment bank. The retail customers have expanded their scope to benefit from investment banking services which are extensive when compared with retail banking. Though investment banking is sometimes unstable but it is more profitable during good economic times. For example, history shows that investment banking experience loss at least once in two decades like it happened in 1973, 1990 and 2007 (Augar, para4). It also experiences downturn at least once in every three years. In the past Barclays has successfully minimized these drawback for its customers. However, as risk management is a game of try and error and one cannot apply the old solution to solve a current problem, the bank continues to analyze financial markets and advice their customers accordingly (Rowbotham, Azhashemi & Galloway, p142).
Current Strategies in Achieving Operational Excellence
Barclays bank main strategies revolve around its objectives of continuous growth through diversification and venturing into new markets. Though reduction in focus on retail banking may be interpreted as a withdrawal and contraction act, the company is largely focusing on the more profitable market segments with a view to counter competition and offer better services. The strategies are inspired by the desire to become one of the few global banks that lead in offering high quality financial products and services and supporting clients and customers in achieving their goals throughout the world. To achieve this, the bank has drawn four strategic priorities:
- To be the best bank in the UK where most of it branches are located.
- To support in the growth of businesses globally by offering the best banking services to both retail and corporate clients.
- To expand both retail and corporate banking services to the markets not yet exploited and
- To regularly enhance on the operational managements.
The bank has formulated strategies that will help in achieving all these goals by encouraging employees to participate in decision making. In organization renewal strategy, and policy formulation, it is vital that specific strategies be put in place to help in achieving the objectives as spelt out in the strategic plan. The bank recruits highly qualified employee who are trained on the culture and traditions of the bank. The bank already has training and development programs that ensure that employee are updated on their skills so as to handle the growing and changing needs of customers. These training and development programs can be improved by making them more elaborate. Barclays University which will engage in training new and old employees from all over world might be the way to go. This will ensure that all Barclay from all over the world are exposed to the same principles and culture (Barclays, para3-4).
Today, customers needs have changed and many customers prefer to be treated according to their financial problem or need. To address this need special needs, the bank reviews its customers and clients need regularly by conducting surveys of customer satisfaction. This helps in understanding them and serving them satisfactorily. The bank is also able to package products according to customers’ interests. The bank should also try to gather more information even from those who are not yet their customers.
Another strategy that Barclays has embarked on is enhancing innovation, bringing in to the bank diverse skills and improving operation management. Innovation has been witnessed in such areas as mobile banking, mortgage services, marketing and branding, market segmentation and creative product development as well as service. Competitors in the banking industry are not sleeping in innovation with new technological ideas going on everyday. Therefore the bank has invested in this important field of research and development. Barclays is known for its quick adoption of technology. The bank should strengthen the relationship with technological based companies who will be advising them on new development in eth IT sector (Pycraft, p85).
Competition has become stiffer than any other time in history. This has been partly contributed by the most recent global economic crisis which has left customer with little power to save and invest. Also some banks have not fully recovered from the crisis and had to be bailed out. Competition in developing markets like Africa and Asia has coming from local financial institution. These local banks have been able to penetrate into the mass low-income market of the society and reaped from them. These markets have not been exploited fully because most people thought that banking services were reserved for the elite.
It is time for Barclays bank to do away with customers’ discrimination on the basis of financial ability. This had been the company’s problem more in the developing world where there were such non sensitive acts as raising the minimum bank account balance, and very lengthy process of opening an account. In some areas, the bank closed its braches due to low productivity. However, these acts were driven by poor strategy development as opposed to low market performances. This is because other small banks went to those markets where Barclays had divested from and became success stories. This is particularly true in Africa. Small and medium enterprises is a section of the economy that the bank has not been able utilize fully. The bank should set up a unit that will deal with these low incomes population markets. This will help to identify their needs and provide them appropriately (Rowland, para2).
Conclusion
The recent global financial crisis has made many customers to reduce their savings and borrowing. There is currently a high level of unemployment hence low purchasing power. This has left financial institutions to fight for smaller customer base. Unlike when Barclays was starting today there are a lot of banking institutions which are working hard to outdo competition.
Barclays has not been left behind in maintaining its position as one of the global leading by. It has formulated strategies that will see it stand strong in the market. The bank incorporates technology in its operations to ensure convenience and truth of the service to customers. It also understands the benefits of carrying out regular customer satisfaction survey and improving employees’ skills to ensure that they meet the customers’ expectations.
References
Augar, P., 2010. Barclays’ success comes at a price. [Online]. Available: http://www.ft.com/cms/s/0/13de7770-bab2-11df-b73d-00144feab49a.html [7 October, 2010].
Barclays, 2010. Our Strategy and Guiding Principles. [Online]. Available:
http://group.barclays.com/About-us/Who-we-are-and-what-we-do/Our-vision-and-strategy [7 October, 2010].
Barclays Capital, 2008. Barclays CORETM – Opportunities In
Trading Equity Correlation. [Online]. Available:
http://db.riskwaters.com/data/structuredproducts/pdf/oct08/oct08_ss_barclayscapital.pdf [7 October, 2010].
Pycraft, M., 2000. Operations management. Pretoria: Pearson
Rowbotham, F., Azhashemi, M. & Galloway, L. 2007. Operations Management in Context. London: Butterworth-Heinemann
Rowland, R., 2010. Barclays Launches Six ETNs for Custom Yield Curve Strategies. [Online]. Available: http://seekingalpha.com/article/220956-barclays-launches-six-etns-for-custom-yield-curve-strategies [7 October, 2010].
SAP AG, 2004. Barclays’ Success Story. [Online]. Available: http://www.sap.com/southafrica/industries/banking/pdf/CS_Barclays.pdf. [7 October, 2010].
PLACE THIS ORDER OR A SIMILAR ORDER WITH GRADE VALLEY TODAY AND GET AN AMAZING DISCOUNT
The post Technological and innovative changes in barclays appeared first on Grade Ninjas.
Welcome to originalessaywriters.com, our friendly and experienced essay writers are available 24/7 to complete all your assignments. We offer high-quality academic essays written from scratch to guarantee top grades to all students. All our papers are 100% plagiarism-free and come with a plagiarism report, upon request
Tell Us “Write My Essay for Me” and Relax! You will get an original essay well before your submission deadline.
