Management Information Systems Assignment.
Canada’s banking industry is becoming increasingly competitive. Any strategic decision
that could give a bank some competitive advantage would be a huge asset in terms of expanding
its market share within the crowded industry. Analytics, as a concept, is not new to the banking
industry; however, its innovative implementation could significantly improve a firm’s
competitiveness (Akkizidis and Stagars, 2016). Analytics uses data gathered from both internal
and external sources to identify patterns and trends that signal opportunities that a firm could
take advantage on.
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The biggest opportunity that a bank could derive from data analytics is in product
development. Management Information Systems Assignment.Customer preferences are constantly changing, and identifying customer needs as
they evolve allows a bank to dynamically change its strategic thinking to fit in with consumer
needs. Data analytics combining data gathered from market research efforts and the prevailing
economic conditions would be useful in determining how to design new products (Singh, 2015)
as well as influencing the decision making concerning product pricing (for new and existing
products). Data analytics would ensure that the products meet consumer needs and are priced
within their economic reach.
Data analytics also offer considerable opportunity in terms of identifying customers that
offer the highest potential in terms of increasing the bank’s revenue. Every bank has a lot of
internal data that could be used to identify high value customers. Effective implementation of
data analytics could identify high value clients by analyzing their spending habits, nature of
transactions as well as their income and determine which clients can be targeted by marketing
efforts (Sun et al., 2014). Targeted marketing has been proven to be more effective than mass
marketing as it offers the targeted segments with products that are within their economic reach
and that meet their specific needs.
The biggest threat offered to a bank’s competitiveness fro analytics is its improper use in
employee performance appraisal. Management Information Systems Assignment.Using analytics in employee appraisal places a lot of pressure
on the employees to meet the predetermined sales targets. The stress associated with this
pressure could either reduce the employees’ overall productivity or increase the likelihood of
them resorting to unethical practices to meet their targets. The recent scandal concerning Wells
Fargo employees in the US opening new accounts without client authorization to meet sales
targets (White, 2016) exemplifies the risk of using analytics for employee appraisal.
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References
Akkizidis, I., & Stagars, M. (2016). The Status Quo of Analytics in the Financial Industry—The
Perspective of Banks.
Singh, P. (2015). LEVERAGING BUSINESS ANALYTICS FOR MARKETING DECISIONS
IN RETAIL BANKING. Management Dynamics, 15(2).
Sun, N., Morris, J. G., Xu, J., Zhu, X., & Xie, M. (2014). iCARE: A framework for big data-
based banking customer analytics. IBM Journal of Research and Development, 58(5/6),
4-1.
White, M. C. (2016). After Wells Fargo Settlement, Questions About the Scandal Emerge. Management Information Systems Assignment.