Case Analysis of Bank of America

Knowledge as a base to build upon

Engaging in online banking turned out to be a very valuable experience for Bank of America in that it provided knowledge and insights on customer behavior, perceptions, understandings, attitudes regarding new technologies, on various obstacles and drawbacks of implementing those, on reliability of forecasts of future cost reductions, etc. All this knowledge is a crucial base on which to further build and explore new horizons and opportunities such as mobile banking and the lessons learned are applicable for any further such technological developments.

Important lessons

One important lesson is that new services and technologies have the potential of raising customer satisfaction and provide more convenience. A warning for the bank here, however, would be not to overwhelm the customers with features and learn how to find the perfect balance between complexity and usability. Another lesson is that people will always be reluctant in embracing technology. They will always have enough personal reasons not to try something new. But on the other side this adoption will ultimately happen. This is the direction that society is headed for. Being the first to offer such a service gives the bank the advantage of the early learner. Another valuable lesson is the recognition that fees, security concerns and extra tasks hinder significantly adoption. If the bank is to develop mobile banking on a later stage it could definitely use such information.

Costs and benefits

Another important lesson is the realization and occasional measurement of the benefits and costs of customers migrating to online banking. The most prominent benefits are: the raised customer satisfaction, the potential to significantly cut operational expenses, the opportunity to further develop and build brand image and to properly position it in the minds of customers by exploring new grounds to differentiate in a highly competitive market, the possibility to keep up with trends and preserve an already strong position on the market, the increased customer retention, the benefits gained from the growth opportunities of this segment of the market, the exploration of new channels of promotion and communication, the possibility to reach customers that might have been out of the reach of the bank before and the attraction of online users to bring higher incremental benefit to the bank.

When it comes to costs, there are two subgroups - actual costs and predicted future cost drivers. It is a fact that in order to implement online banking an investment in new technology, specialists, software, development, etc. should be made. This initial investment reduces the attractiveness of all listed benefits. Furthermore, the opportunity costs from transferring resources to the new initiative should be accounted for. The only comfort for the company