Westpac Banking Corporation Company Overview - Case Study Example

Westpac Banking Corporation: Business report Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission Westpac Banking Corporation: Business report Executive summary According to Australia Trade Commission (2011), the financial sector is the largest contributor to the country’s national output. This was epitomized by the sector’s generation of more than 10% of Australian output or A$135 billion of real gross value added in 2010. Westpac has had a monumental share in this contribution. This has been founded on the bank’s long-term commitment to continue with quality service delivery to its customers as well as responsiveness to their dynamic demands. Contents Executive summary 2 Contents 3 Company overview 4 Service quality assessment 5 Tangibles 5 Responsiveness 6 Empathy 7 Reliability 8 Assurance 8 Conclusion and Recommendations 9 References 10 Company overview Westpac has a long history in the Australian banking sector, being the first and the oldest bank in the country. This bank was established in 1817 as the Bank of New South Wales and eventually changed its name to Westpac Banking Corporation in 1982 following the acquisition of the Commercial bank of Australia (Westpac website, 2012). The bank recorded heightened expansion following this acquisition. Despite the economic challenges at the wake of the financial slump in the 1980s, Westpac continued with its efforts for rapid expansion and successfully instigated acquisition of Challenge Bank Limited, Western Australia, Trust bank New Zealand and Bank of Melbourne in 1995, 1996 and 1997 respectively (Westpac website, 2012). 2002 saw the bank advent some strategic reshaping which was characterized by the sale of its long-term finance company, Australian Guarantee Corporation Limited (AGC) to GE Australia. Westpac merged with St George Bank Limited in 2008, a key strategy that culminated in the formation of a bigger multi-brand group with a diversified portfolio (Westpac website, 2012). The Bank has continued with its upward trend in terms of growth and elevated consumer base and despite the economic recession in 2008, Westpac has sustained a constant market share both in the Australian population and internationally. By 2017, Westpac will reach a commendable milestone of being in business for two centuries and according to Westpac Group Annual report (2010), the firm is making efforts towards sustainability which entails managing and positioning the company for the long-term. Service quality assessment As aforementioned in the above discourse, the company has made integral strategic approaches to enhance the quality of service delivered through continued meeting of the consumer demands. This assessment will explore five dimensions of quality service delivery assessment namely tangibles, reliability, responsiveness, assurance and empathy. Tangibles Naik, Gantasala and Prabhakar (2010) defined tangibles as the appearance of the physical facilities, equipment, personnel and written material. In regard to personnel, Westpac Group (2010) noted that the bank has exceeded its projected advancements in its human capital development through continued focus on coaching and training, having a diverse and flexible workforce as well as tailored recruitment and induction processes. In terms of physical facilities and equipment, the bank continued to invest in the refurbishment and expansion of branch and ATM networks which includes the conversion of 34 St. George branches in Victoria to the bank of Melbourne brand in 2011. In the same year, the Westpac Group also enlarged its footprint with a net additional 15 branches and installed an additional 119 proprietary ATMs (Westpac Group, 2011). However, there are some expectations which are not met including widespread penetration to the international market outside the Asia-pacific region. This includes countries in Africa and Latin America which will be integral in expanding its consumer base. Responsiveness According to Naik, Gantasala and Prabhakar (2010), responsiveness is the willingness to assist customers and provide prompt service. It is worth noting that the sole factor of superior services in a bank is not sufficient in customer satisfaction. They have to be supplemented with the willingness to meet the clients’ needs, provision of excellent services and delivering innovative products. This combination is key in the eventual success of any firm in the banking industry (Cohen, Gan, Yoong & Choong, 2006). Westpac has continued to engage diverse efforts aimed at understanding and addressing the consumers’ concerns through the provision of services that are tailored towards addressing their specific needs. According to the Westpac Group (2011), responsiveness issues are directly injected in to the generation of sustainability strategy and setting of objectives. The bank set itself several objectives in this regard to be completed between 2011 and 2014 and much progress has been achieved in most areas. St. George and Westpac continue to be ranked numbers 1 and 2 respectively for net promoter score (NPS) among the major banks for business consumers. Nonetheless, the group is yet to achieve its women in leadership targets as a way of responding to the consumer demands of elevated gender equity in the bank. Currently, 37.5% of the leadership roles are held by women. However, this is not enough when juxtaposed with the set objective which is to increase the percentage of women in leadership roles to 40% by the end of 2014 which is yet to be achieved (Westpac Group, 2011). Perhaps this slow progress can be attributed to the reluctant policy formulation and implementation towards addressing the issue of gender equity as a response to both the consumer demands and inclusion fundamentals. Empathy Naik, Gantasala and Prabhakar (2010) perceived empathy to entail caring, easy access and ideal communication, giving individualized attention to customers as well as understanding the customers. This is key to retaining consumers in the firm and informing the ultimate success of any business venture. In addition, Naylor and Greco (2002) inferred that understanding the motivation, desires and expectations of the customer and the organization offers a basis in how to best serve the customers. Kaynak and Kucukemiroglu (1992) suggested that to successfully compete in the contemporary dynamic and competitive marketplace, banks ought to engage intensive focus in understanding the needs, satisfaction, attitude and behavior patterns of the market. It is apparent that the market is basically constituted of differentiated customers. According to the Westpac Group (2011), the corporation is endowed with a workforce profile that has been competent in delivering competitive advantage which has been enhanced through the ability to gather a deep understanding of consumer needs. This has been facilitated through giving the staff timely insights and empowering them in order to improve their competency in addressing the consumers’ issues which has been chief in providing even a deeper understanding of the consumer in practice. Nonetheless, issues of inequality in accessing banking services, mostly in relation to the Aboriginal populations has been an ongoing argument among policy makers and in the public domain. There is presumed segregation in service delivery and Westpac group is yet to address this maze. Reliability Naik, Gantasala and Prabhakar (2010) viewed reliability as the ability to perform the promised service dependably and accurately. In response to the dynamics in the market instigated by widespread technological advancements, Westpac has been able to incorporate the latest technology in its operations which has been chief in offering dependable and accurate services. This effort has been spearheaded by a technology oriented group in Westpac whose sole responsibility is to develop and maintain reliable and flexible technology capabilities and strategies (Westpac Group, 2011). Nonetheless, the firm is yet to come up with a comprehensive strategy of embracing an inclusive technology that will cater for all the needs among different consumers in terms of age and gender in its highly differentiated market. Assurance This can be viewed as the knowledge, courtesy and ability of the employees to inspire trust and confidence (Naik, Gantasala & Prabhakar, 2010). The employees at Westpac have continued to perform exemplarily well in inspiring trust and confidence among consumers which has been enhanced through extended trainings to advance their knowledge and skills. However, the institution is yet to comply with the Future of Financial Advice (FOFA) reforms which are geared towards enhancing the consumer trust and confidence in, and the quality of, financial advice. This is the first tranche of draft legislation that was issued by the government on 29th August 2011 but yet to come to effect in July 2012 (Westpac Group (2011). Conclusion and Recommendations From the preceding discourse, it is apparent that Westpac has continued to perform well and rates exemplarily in the five dimensions of service quality assessment. Nonetheless, there are some minor gaps that need to be addressed aimed at further enhancing its services quality. In regard to technology, the firm ought to formulate a strategic approach in rolling out its technologically-oriented services. This will be fundamental in delivering of services which will cater for all the consumer classes in the market regardless of age, gender and financial set-up. Secondly, the marketing strategies of Westpac ought to expand outside the confines of the Asia pacific region and diversify to other areas in the world which will not only elevate its consumer base but also enhance its global corporate image. Thirdly, the firm ought to fast-track the implementation of some of the already formulated policies like gender equity. This will be integral in increasing its acceptance among diverse consumers as well as compliance with the set standards of gender balance in the corporate world. In addition, Westpac has an urgent need to address the raised concerns about inequitable access to banking services among members of the Australian population. This will ensure that the firm gains a more favorable niche in the differentiated market. Lastly, the firm is under obligation to ensure that compliance with legislations aimed at improving the public trust and confidence in the banking sector are adhered to. This will be paramount in retaining the consumers even in times of economic slumps. References Australia Trade Commission (2011). Australia’s banking Industry. Canberra: Australia Trade Commission. Cohen, D., Gan, C., Yoong H., & Choong, E. (2006). Customer Satisfaction: A Study of Bank Customer Retention in New Zealand. Retrieved April 27, 2012 from http://www.lincoln.ac.nz/Documents/2308_DP109dc_s6473.pdf Kaynak, E., & Kucukemiroglu, O. (1992). Bank and Product Selection: Hong Kong. The International Journal of Bank Marketing, 10(1), 3-17. Naik, C.N., Gantasala, S.B. & Prabhakar, G.V. (2010). Service Quality (Servqual) and its Effect on Customer Satisfaction in Retailing. European Journal of Social Sciences, 16(2), 231-243. Naylor, M. & Greco, S. (2002). Customer chemistry: How to keep the customers you want – and say “good-bye” to the ones you don’t. Chicago: McGraw-Hill. Westpac Group (2010). Annual Review and Sustainability Report: Sustainability Matters. Sydney: Westpac Group. Westpac Group (2011). Westpac Group Annual Report 2011. Sydney: Westpac Group Westpac website (2012). Retrieved April 27, 2012 from http://www.westpac.com.au Read More