Introduction
The origin of the banking rooted in the time when the Roman conquered British regions and started banking business there. At that time, they mainly introduced two types of banking, one was for the elite class, and another was purely for professional. The activities of the bank bound to only receiving deposits and advancing credit and still today, it is the main business of the modern banks. After the dissolution of the crown’s power to hold the money, the goldsmith acted as a banker in England but the poor transaction and restriction of law making, it was difficult to run the banking business by the gold smith. Then the joint stock bank evolved in 1826 in England but the first bank of the world is the Bank of England established at 1626 through a special chartered law of the king. From that time to till today, banking businesses gone through a series of innovation and style where the nature of service changes almost in every day.
Key issues and challenges of Management of System
Strategic Business Challenge
Currently, almost all of the banking organisations in the banking industry are starting their services and implementing the strategic issues through the information system of the organisation. Banking sector is a service industry where the importance of implementing the information system is very important to serve and retrain the customers. As a result, one of the major challenges for the bank is to realise the benefit of implementing the information management system. The technological advancement and changes of business environment is so fast that sometimes few banking organisations find it difficult to cope with the situation. Not only that, merely undertaking the IMS cannot bring success for the organisation rather it requires to redesign the whole organisation through introducing new business models, and changing the attitudes of the employee and it is much important for realizing the actual benefit from the information management. Otherwise, a specific banking firm neither can be a digital firm nor utilise its resources, as developing information management system requires a huge amount of investment (Turban, McLean and Wetherbe, 2007).
Globalisation Challenge
In banking sector, globalization has more affect than any other sectors as banking sectors are more doing business worldwide even individually or congruence with the other banking organisation around the world. Globalization is a concept where whole world is thinking as one country and free flow of information and services are common. Efficiently handle the transaction and properly channel the communication for other business organisation is the most important challenges for this industry (Stair and Reynolds, 2007).
Developing proper business architecture and infrastructure challenge
In general, proper handling and maintenance of information management requires selecting that information system, which best fit with the organisational goals and strategies (Sherman & Blumenthal, (1969). In the banking sector, there are some basic business operations that include retailing, advance, foreign exchange, cash dealings, which involve different kind of information structure, and infrastructure. Here the challenges for the industry to select the best architecture that best serves the purpose of the organisation. The integration of different system into one central system through which the required person can obtain the information is very important and it prompts the operation of the industry. The quality of service to the customers broadly depends on these issues of selecting suitable information architecture and proper integration of the system (O’Brien & Marakas, 2006).
Investment Challenge
In banking industry, the importance of information management is very important as banks deals with information of customers and stakeholders (Shin, 2001). As a result, most of the world leading banks adopt current technologies to prompt the service and speed up the operation. However, installing a new information system incurs a huge amount of investment that may obsolete with in a very short time as the information technology is changing rapidly. Here the challenge is to select a system that may last for a period within which bank can realize the investment and the management face a challenge to select appropriate level of investment (Boddy, Boonstra & Kennedy, 2004).
Controlling Challenge
Whenever a new information system takes place, the management faces difficulty in controlling the operation and employees. Free flows of information may harm the privacy of strategies and tactics of the bank, which is important for competing in the market (Laudon & Laudon, 2003).
Business Process
Supply Chain Management Process of European Investment Bank
In European Investment Bank, information is the main key to do business in the industry and it largely depends on the information. Supply Chain in this bank includes providing information on stocks and investment to the client and stakeholders so that they can make the right decision on investment (Christopher, 1998). European Investment Bank collects information from various sources including market and feed the information in the market. As an example, the bank initiates various analysis on the market and take the information to assess the risk and profitability then finally delivers this information to the proper channel. This whole system builds the information supply chain of a bank like European Investment Bank. There are mainly three functions of supply chain of European Investment Bank, which are as follows:
Information Creation
In the supply chain of information, European Investment Bank create information itself through buying or selling IPO, shares, bonds, securities, equities etc. This information directly influenced the buyers, various other analysts collect this information for further use, and bank can make this information through the central bank, government other financial institution (Aladwani, 2001).
Source of Information
Supply Chain of European Investment Bank acts as an agent of information suppliers to the customers and stakeholders. It gives information regarding the primary share market, secondary share market, prices of share and debenture, central bank etc (Cohen & Roussel, 2005). Using this information, customers, and stakeholders may benefit in the investment and the bank sourcing this information through the central bank, various share market, issuing bank etc.
Movement of information
European Investment Bank crates the chance of exchanging information through its various services to the customers. The bank through its customer account provides information to the customers, settle the issues of clients, receive, and pay bills, issue cheques to the party of the clients etc. that helps to move the information and through the network system of European Investment Bank easily transfer the information from one place to another.
Information requirements for Supply Chain
To effectively maintaining the supply chain of European Investment Bank, it needs to supply information on various perspectives of businesses. Traditionally supply chain is a concept used in production but now in current time it also used in service industries especially in banking industry to support its stakeholders. It starts with serving customers through information supply to end up with measuring the outcome of using that information (Ryals & Knox, 2001). In various steps of supply chain, the business process of European Investment Bank requires following information.
- It requires clear and compact data about the market including the current and historical trends, which is compulsory for helping the investors or customers to take decision about the investment. To serve this purpose, investment bank needs to conduct extensive market survey rather depending on the secondary data. It also helps other stakeholders excluding the customers about the companies own stock and shares beside the outside one (Amir, 2008).
- In the supply chain management of European Investment Bank, the banks need to collect information about the clients including the other stakeholders for analysis purpose. Generally, a central integrated information system has installed to support the employees of European Investment Bank to enter and works in the supply chain system using the central system.
- European Investment Bank needs to undertake some research works for providing the accurate data to the customers. To do the research work, it should stresses on collecting primary information regarding the market, current situation, financial analysis and many other issues relating to the investment that can feed into the supply chain system of the bank.
- To develop an automated supply chain European Investment Bank requires information regarding the stakeholders that includes the all parties related to the bank. If the customer and stakeholder do not have orientation with the automated system, it may create problem and the bank should information regarding this issues.
Management decision making processes analysis
Top-level management
At the top-level management the strategic issues of the organisation discussed and finally decision have made on the critical issues of the organisation, which directly affect or influence the strategies of the organisation. European Investment Bank has the decision support system to aid the top management in decision-making. Top-level management of this bank deals with the corporate strategies of the company, which requires a large sum of data. Another important function of top-level management is to integrate the functions of various departments in a way so that it can serve the overall goal of the organisation. To take the decision to formulate new strategies or fine-tune the existing one, top management must have the data regarding the current condition of the bank including the condition of the employees and functions of the various departments. It also assesses the support from the various level of the organisation to implement the new strategies (Wand & Weber, 1990). Various analytical models and tools are available to the management to undertake the analysis regarding environment, competition etc to rationalize the decision making process. For European Investment Bank, the main decision involves in top management is to evaluate its current corporate strategies and take new strategies to cope with the changing situation. As the customers demand and the nature of system have changed almost in every month, top-level management should keep this data to update its strategies and system with the competitors.
Mid level managements
Mid-level management of the organisation includes the managers who take the decision regarding the various functions or business units and this decision-making related to the business level strategies of the organisation. European Investment Bank has various functions that include provide information regarding the investment to the investor, represent the client in the stock market, conduct research etc. To be successful in the industry, it has to collect information about various departments of the bank and their progress in functioning to the achievement of the organisational goals (Porter, 2001). At this level managers requires the information regarding whether the business or department work according to the goals and is there any necessity to change current system. When analyzing the information system of the department, manager gets a wide array of data regarding the operation and environment that need to analyze to understand the situation and various models can use as a tools for analyzing the data. After that, the decision making process may be more easy for manager if the collecting data can analyze properly (Deacon, Al-Weshah, & Thomas, 2009).
First-level management
First level management of the organisation supervises the workers or low-level employees and undertakes the decision regarding the day-to-day operation of the organisation. Sometimes it may correspond to the functional level strategies of the organisation. European Investment Bank has regular functions including contact with the customers, giving answer and solving the problem of the customers, collects regular information about the stock market and investment situation etc. To make this system efficient, a large number of information need to gather everyday for functional purpose. Right number of information should be available in right time to the employee so that they can serve the customers more efficiently. The supervisor or manager at this level, mainly decide how the bank response to the customers immediately, which data should gives importance and which is not etc.
Conclusion
Information system is a core supporting tools for enduring banking system around the world and without information, modern banking is almost impossible. Due to changes in nature and system of business banking business faces more challenges than any other time. The main challenges face by the modern banks regarding globalization, strategic, infrastructural, investment etc. Without overcoming those challenges, no bank will get success and to cope with the challenges, banks must develop unique as well as integrated information system for all the business processes in the bank. Suppose, in case of supply chain process, it is mandatory to use an information system, which helps the bank to maintain this function more efficiently. Finally, to undertake information system and management decision need to be made on every level of management. There are three levels of management such as top level, mid level and first level and different processes occupied by the different levels. In order to handle those processes effectively, managers of different level decide on which information system required by process.
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