Commonwealth Bank is an Australia-based bank (CBA). CBA was founded in 1911 by the Australian Government and its privatization was completed in 1996 before ANZ and NAB [i] , CBA along with its subsidiary is engaged in the provision of a range of banking and financial products and services to retail, small business, corporate and institutional clients.
According to website Money review and the news Australian, in the end months of 2008, the Commonwealth, AZN, NAB and many other Banks simultaneously cut interest rate on variable home loan to stimulate the housing market. On 20 October, the Commonwealth Bank reduced from 8.53%pa to 8.32%pa (-0.21%pa) and ANZ from 8.56%pa to 8.32%pa. Special on 2nd November (after 2 weeks) the Commonwealth reduced second times from 8.32%pa to 7.74%pa (-0.58%pa) and become the lowest interest rate on variable home loan. Retail Banking Services Group Executive Ross McEwan said “we do expect global financial markets to normalize over time and once that does occur we will be able to reduce rates by more than the RBA adjustments. Our customers can continue to expect additional out of cycle interest rate reductions. The figure 4 compares between Au, USA and UK housing market in this time, Australian market was better than USA and UK because the economic efforts of Australian Government, CBA and other banks. That was very good sign because it made the Australian market minimize the consequences from the global financial crisis.
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CBA could control crisis management even its performer declined but Mr Ralph Norris understood that CBA had to do more after, in 2010 – post of the Global financial crisis, the CBA became the first big bank to raise interest rates on standard variable loans in 2010, better than ANZ and NAB. Sydney-based CBA said “the deposit interest rate on the NetBank Saver and Business Online Saver accounts will increase by 25 basis points also on March 5 of 2010”. That were very good strategy to draw the capital. (news.com, the Australian, commonwealth bank)
However in Nov 2008, many magazines (the Australian, news.com, the Financial times) were simultaneously public news: CBA meet big technology problem” that was glitch from ATM problem it made many customers lost much money while they were transacting the money but CBA’s website never shows its problem. Up to 200,000 customers were affected by the error, their accounts overdrawn or missing large sums of money. Immediately understanding urgent problem at 2pm in that day, CBA spokesperson Steve Batten apologized to customers and said “we are sorry for this convenience and we will refund any fee that a customer is impacted by as a result of this error. We have identified a fix to this problem which will be resolved overnight”. Anyway, that was very good solving problem because nowadays the technology change rapidly and some problems cannot predict. If it happens, the best way to solve is “apologize customer and fix it as soon as possible”. And 2009, CBA got the OSCARDS award (Best International Prepaid Card)
Chapter 4: Strategy
In any company, the strategy is very important because it decide the direct of company. I mentioned in chapter 1, over few past years CBA focused on retail banking services segment and it generates most profit. That was reason CBA’s strategy focused on:
Improving customer service was highest priority.
Simplifying policies and procedures
Expanding its business-banking footprint by extending business banking services and refining the sales model to ensure it meets evolving customer needs.
Technology and operational excellence: after some glitches were caused by computer and ATM, CBA understood the important of technology. CBA focused on:
Leveraging technology capabilities and expertise to revitalize systems and processes
Implementing smarter sourcing
Continuing to develop lean and efficient processes
Strategic humans by the training staff, investment in talent management, etc…
The CBA’s strengths include strong brand recognition and the largest financial services customer with more than 37,000 staffs and 135,000 points of representation in Australian and overseas. More than that, 2009 CBA was biggest assets in Australian market m$ 317,697, the 2nd was NAZ (m$ 247,782).
(Top 10 Banks of Australia by Assets and Deposits, David Hunkar, This list was compiled with data from the “Monthly Banking Statistics” report released by the APRA [iii] on July 31st, http://seekingalpha.com/article/158189-top-10-banks-of-australia-by-assets-and-deposits) .
According the Financial times (http://markets.ft.com/tearsheets/businessProfile.asp?s=CBA:ASX) researched, CBA has been 6th in the ranking of ASIA bank after 4 banks of China and ANZ. And very important strength CBA that is the employees, CBA’s strengths also include strong in the technology, it is expressed in CBA’s strategy and become the strength of CBA.
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Special in 2010, understanding the demand of the customer and the growth of the technology, CBA developed a strategic alliance with Woolworths Ltd to deliver Ezybanking, a cobranded financial services product through its 640 retail outlets, an agreement with McDonalds to provide EFTPOS [iv] facilities in every outlet, and an agreement with Vodafone to provide Australia’s first mobile banking service using the keypad. That were the CBA’s conveniences which are used to improve competitive advantage and it were the innovations of CBA (Media Release, 2010, Bryan Fitzger – Head of Communication/ the free library)
Chapter 5: Vision, mission, goals.
CBA’s vision
The Commonwealth Bank’s vision is to be Australia’s finest financial services organization through excelling in customer service.
The Commonwealth Bank is committed to being Australia’s finest financial services organization through excelling in customer service. To achieve this, we are doing things differently. This determination to be different has been reflected in a number of recent award wins.
When I read this assignment for the CBA report, I thought I will answer the question “would you like to work for this company and why?” very simple “No because I did not have the experience working in Bank”. But when I verify all about CBA with strong brand, very good CSR, the training staff, spread branch (special Vietnam representation) I would like to work in CBA. Because I know I have a chance to make up my knowledge and experience in the banking sector with the useful training of CBA’s strategic humans. I hope with CBA’s dynamic and innovation which would enable me to apply my skills and my knowledge. Moreover, I trust on the developing of CBA with very good services and its convenience goods which are better than other competitors.
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