Sunday, April 7, 2019
Middle Range Theory Essay Example for Free
Middle Range Theory bear witnessBank of the States is the largest US avow founded in 1904, it has expanded finished several acquisitions. By the oddment of 2009, Bank of the States was the market leader serving 82% of the US population and over 53 million customers. They ar positi unrivalledd as number one in online and nimble positing. Their active banking service were launched in 2007 and have gained 4 million customers in less than tierce years. Acquisitions make by Bank of the States prior to the monetary crisis ca routined a very strong drop in their stock price. Customers In 2009, 10 million customers used mobile banking and this is expected to grow to 37 million by 2014. Customers that use mobile banking are not the same as online customers. Customers that use mobile banking represent a different element of the market that other banking customers. Security issues, a perceived low value and expense, were the primary reasons that customers did not budge to mobile banking. Potential customers were reluctant to try a new banking service that are represented an limited cost and they were also afraid of losing control of their finances.Debit cardholders were the most active users. It was convenient for them because they could check their history at any time. Customers that used this service changed their usual banking channels and as a result -the bank had a higher retention for these users of online services. Competition/Competitors Bank of Americas main competitors were Bank of New York Mellon, JP Morgan Chase Co. , rise up Fargo Co. , Citigroup, and PNC Financial Services. These competitors also used mobile banking to ensure good service for their customers.They used SMS, customized web browsers and apps, depending on the bank and the customers they served. Citibank and Wells Fargo had different natural coverings customized for their target groups. General Context Considering that the banking industry is fragmented, with thousands of b anks offering retail and sell banking services ten of the largest banks hold 46. 4% of total deposits, Bank of America beingness the largest one. The mortgage crisis of 2009 take to a deep recession and spilled over into a financial crisis that affected the retail banking business.Banks started waving fees and offering additional benefits in order to capture and retain customers. Mobile banking was introduced in the US in 2007 which added cost to each transaction. However, these cost were lower than call centers and interactive voice response costs. Bank of America had three options mobile messaging (mobile stream modification without any software installation), mobile Internet (wireless coating protocol), and mobile applications. Mobile applications in particular were more sophisticated and costly. Smartphone use was estimated to grow to 46% by 2014. reading DilemmaBank of America has two options to handle the future of mobile banking 1) Build new and mingled applications to target different customers a) Pros i) Customers want customization in the products this ordain increase retention and satisfaction. ii) Marketing strategies buttocks be segmented into different types of clients. This increases efficiency and reduces costs. iii) Superior brand and innovation perception. a) Cons i) Cost of application creation leave increase due to the different areas and type of customers at Bank of America ii) Any changes in the bank services will have to be applied to all apps. somewhat customers will have to transfer and use various apps at the same time 2) Refuse to add complexity to the current application a) Pros i) No extra costs on building a new application ii) Customers that don? t like technology or doubt about security issues wont be affected b) Cons i) otherwise banks offer better mobile apps and this will increase their competitive advantage ii) Customer satisfaction will suffer if the app is not updated and does not fulfill their needs. iii) Tran sactions will still be done through ATMs, Call centers and IVR, which are 4 to 11 times more costly.Opportunities Since Bank of America is one of the largest financial institutions in United States that has millions of customers online banking is an important feature that offers to ease transactions and provides chafe to billing statements. However, because of the multitude of services banks offer it is overly-complicated to provide all items in one bundle. Because of this complexity (to add all the banking features in one app for mobile banking) Bank of America should target tablet-users to provide all the banking features with different applications.For example Bank of America can provide tools like market reports for savvy investors or savings programs for households (where it is easier to keep track of expenses. ) Tablets are relatively easier to use than mobile phones. Targeting such a market at an early stage can broaden the spectrum in which Bank of America operates its mobi le banking. This opportunity which targets future markets as computers are being replaced by tablets should not be forgone.Ease of access and use for customers with multiple Bank of America services, easier trailing of frauds or errors. ) Bank of America customers will be able to access a large grade of services online. c) For about high-end apps a nominal fee may be charged to cover some of the technology budget. 2) Cons a) Customer information may be at risk as it is insecure to access sensitive information online for which Bank of America will have to maintain high privacy, increasing cost. b) Some of the features may still be complex and require customer support hotline. c) Customers may act on unintended transactions involving significant funds.Recommendations Bank of America needs to improve the complexity to the current application. subsequently analyzing the options and the opportunity, we think that Bank of America has to differentiate themselves from their competitors w hile offering a great service to their clients, we would urge on to increase the functionality of the mobile app. This change will bring extra benefits to the different type of clients in a ace download. The company will also cut costs in the type of transactions made by the clients.The continuous growth of the mobile market especially the Smartphone use is another aspect of the recommendation. Having a mobile has become a commodity for the population. The new generation will get so accustomed to this technology that they will be able to deal with any app complexity without any problem. Bank of America has to think of its future customers, not only the current mobile technology adaptors. 1) Pros a) Having a better application will differentiate the bank compared to their competitors b) Customers will have overall services in a single application.Mobile payment services would be added to the app and will attract and benefit many customers. d) Transaction costs will become lower as the % of Smartphone users grows (46% for year 2014). 2) Cons a) Added complexity will discourage some customers to use the application b) Speed of the application may suffer if the customer has a bad connection or has too many applications downloaded in their mobile. c) The cost of developing a more complex application is larger and may require more expertise and training for employees and customers as well.