The National Commercial Bank of Saudi Arabia was established in 1953. It was the initial bank in Saudi Arabia. Most of people, who knew about banking, depended solely on it for financial services. The citizens did not know about any other bank, as it was the only one, which existed (Baker 112).
Currently, this bank is the biggest in whole of Middle East. The latest information gotten about it indicates that it has a paid up capital of US $ 1600 million. Towards the end of 2007, the overall amount of assets that it owned were US $ 55658 million. In the same year of 2007, it managed a net profit of US $ 1610 million.
The bank is known for its efforts in delivering quality services to its customers for a long period it has existed in the market. Through leveraging technology, National Commercial Bank of Saudi Arabia is in a position to offer the most modern services among its competitors. It has also tried to maintain the traditions of Saudi Arabia, during its time of offering these services to its customers. It has 266 retail outlets that are committed in offering Islamic banking services.
One of its strength is its wide customer base, which is approximately 2 million, which is managed well through effective array of delivery control (Shaw 105). More to its effective services to customers, the National commercial bank of Saudi Arabia has approximately 942 ATMs and 7000point of sale outlets. It initiated the introduction of online-banking services in Saudi Arabia. It managed this, through the usage of credit cards to facilitate the mobile banking that made the services of customers more effective with time.
According to the news that were obtained in 2007, more than 85% of the customers banking services were done through alternative delivery channels, which was a sign of the advancement of the National Commercial Bank customer services. This bank is also known by its big space through which it operates its foreign exchange and money market in the whole of Middle East.
This effective service of handling foreign exchange has made its customers to be more satisfied as all their needs are` met satisfactorily within its premises. The main areas of the case study are the challenges that the bank faced, of the need to reduce manual processes, time and costs in efforts of giving its clients an online channel for its corporate clients (Shaw 503).
The solution of the challenge was the generation of a web-based solution that improved the flexibility and extensibility. The overall benefits that the bank enjoyed were streamlining the operations, improved customer service and reduced total operating costs that the bank incurred initially.
The case study
In the year 2003, the National Commercial Bank was working tirelessly towards enhancing its banking services to some of its corporate bodies. This was the time when these corporate bodies, the clients of National Commercial Bank received services from the bank directly (Shaw 612). Through receiving these services directly, the corporate bodies’ clients, had the chance to interact with the bank through its retail outlets, whereby the work of the manual processes increased leading to some key issues that required to be addressed on time.
The main channel for corporate clients
It was a routine for these corporate clients to report to the bank branches for their normal enquiries and cash transactions. Although it was relying on the PC banking solution, which was a direct transaction to serve few customers, it was hard for the bank to reduce the branch overhead.
This was a result of the presence of a huge number of cashiers within one branch, and the increased foreign currency draft request, that were made by the corporate clients (Baker 316). All these transactions required some personnel to handle the manual operations at the branch levels. Most of the time, it was a must for the bank tellers to keep regular interaction with the treasury help desk to inquire and decide on the most favorable exchange rate to be used in settling the corporate clients.
Features in incumbent system
The use of Personal computer banking services in the branches resulted to limited functionality. The main issue that brought about some controversies was that, the cash management elements for coming up with the best exchange rates to handle the problems of the clients online were not available.
The treasury system could not solve the foreign currency issues through online mode. Another major issue that needed some attention was that, some liquidity management elements such as time deposits management were not readily available (Shaw 475).
For instance, incase there was a need for SWIFT payments to be made; the corporate client had to visit the bank branch or communicate with relationship manager to give the required authorization by fax. This act was not admirable, as it was resulting to some delays of urgent customer’s requests. Another issue that the bank faced was
Non Web-enabled transactions
This was a great challenge to both the bank and its customers. One of the major issues that challenged the bank is lack of a bank website, where the clients would access some of the information to solve their problems.
The absence of a bank web where the clients could visit for some solutions resulted to an increased manual processing for both the bank and its esteemed clients. For instance, the clients from the corporate bodies were forced to prepare their payroll sheets in advance by following the specifications that were required by the bank, and then present the sheets to the bank for further processing (Baker 580).
This was too much work for customers to handle, as they were expecting all this work done by the bank itself, through the application of the advanced technology. The bank developed a high desire of solving such problems to ensure that their customers were served well and satisfactorily without much struggle. This was also a desire for clients to receive the best form of services from their entrusted bank.
The National Commercial Bank of Saudi Arabia did an evaluation of how the banking solutions could be found online, and it managed to come up with Infosys as its technology partner that would provide solutions to its problems (Reid 226). Through collaborating with Infosys, there was an introduction of Infosys Finacle web based cash management software, which the bank planned to implement within the next one year.
The application of this web based cash management software with the help of other competent technologies like J2EE and .NET managed to solve major problems associated with online banking. Through the use of these technologies by the National Commercial Bank, it was possible to eliminate the hardships of travelling by providing anytime, anywhere access to the needed information by both the banks clients and the employees.
There were other benefits that the bank enjoyed from the introduction of such technologies like global liquidity management, short term clients investments through the bank, and easier management of international payments such making it to enjoy rich set of functionality (Reid 123).
The web based cash management software has a capability of offering multi-channel delivery through both the personal computer and other wireless devices. The application of this solution to the bank branches also ensures reduced Total Cost of Ownership, effective services to the clients, time saving for clients and the tellers, and quick maintenance for the bank in general.
Banks corporate customers
Another solution that was worth celebration by the banks clients was that the clients did not have to visit the bank branches for inquiries and other cash transactions like those that they used to do before. The new system gave the clients some opportunities to remotely login by use of a browser, do some inquiries, and later conduct some transactions with National commercial Bank.
The corporate customers still can as well access the liquidity management features through online, and handle some issues like setting up account sweep guidelines, come up with money market deals, and receive an automated reconciliation of the account cash transactions (Reid 201). This exercise allows clients to have access to their account whenever they need it, to ensure their accounts are safe and not tampered with by any stranger. These applications provided for more security of the clients account.
By Finacle web based cash management software, the national commercial bank treasury is able to obtain the current online exchange rates that would be important while doing foreign exchange transactions with the corporate (Baker 405). It became possible for the corporate clients to receive the latest rate during the cash transactions with the bank.
This system also has a capability of allowing the corporate to send their draft requests online. The Finacle system also works with the National Commercial Bank especially the main banking system to ensure the clients requests are processed as quickly as possible.
The real time transaction processing
Another major improvement was that the corporate could easily send their payroll sheets through the internet a safe connection (Baker 315). Once the banks receive these payroll sheets to confirm whether they are in accordance with their specifications, the bank takes them to the main banking system for further processing.
This action saved much time as the corporate used to visit the bank branch to present their payroll sheets for final processing. Through the online services, the bank keeps on updating the corporate about the status of their payroll processes.
Through working hand in hand with Finacle the National Commercial Bank has managed to handle its business challenges, and has successfully met the demands of its clients especially the corporate ones (Reid 98).
The introduction of the online banking services creates a most convenient customer experience and effective services to be enjoyed by both clients and employees. One indication of showing that customers are enjoying the online banking services is through the increased number of the customers preferring online service to other retail outlets.
The banks online services act as a virtual branch for the National Commercial Bank thus reducing the overall operating cost of it, due to the decrease of corporate transactions and bank staffs. Moreover, the online services have resulted to rich functionality whereby the workload in every branch is reduced thus streamlining the overall operations. The accessibility of various transactions by the bank from one point became possible thus enabling it to fix the prices of the products and services in the best way.
According to the information obtained from the Deputy General Manager of National Commercial Bank, he confessed that the cash management solution made them to take very crucial steps. Such steps included adding business value to their corporate customers, receiving the flexibility and functionalities that would place them in a very competitive edge compared to other global banks (Reid 117).
The bank was also in a position to have a real time transaction processing potential and acquired a more business value according to their expectations. The deputy general manager of the bank gave a speech to assure the public how much the bank has benefitted from the Finacle web based cash management solution. There were no doubts that it enjoyed many benefits from this system especially fulfilling the dreams of their clients.
Some of the questions that may arise from the above case study are:
What were the challenges that were associated with the introduction of Finacle web based cash management solution.
Was the cost of installing the system worthy compared to the benefits that the bank enjoyed?
Is the bank still looking for more technological advancements?
Baker, Michael. The Marketing Book. Michigan: Butterworth-Heinemann, 2007.
Reid, Robert. Hospitality Marketing Management. New York: John Wiley and Sons, 2009.
Shaw, John. International Marketing: Strategy and Theory. Michigan: Taylor & Francis, 2008.