Question 32b
The People’s Bank is a bank based in the country of Nawkrei. It has a total of 65 branches across the country and also offers online banking (access to services via computer) and telephone banking (access to customer service agents over the telephone) to its customers. Recently, The People’s Bank also began offering its customers a range of mobile banking services, which can be accessed from customers’ smartphones and tablet computers. Its customer-base is made up of both private individuals and business customers. The range of services it offers includes:
Current accounts
Savings accounts
Credit cards
Business and personal loans
Mortgages (loans for property purchases)
The People’s Bank’s vision is to be ‘the bank that gives back to its customers’ and their purpose is ‘to help the people and businesses of Nawkrei to live better lives and achieve their ambitions’. In order to achieve this, the bank’s values are stated as:
(1) Putting customers’ needs first, which involves anticipating and understanding customers’ needs and making products and services accessible to as many customers as possible. The People’ Bank has recently invested heavily in IT security to prevent fraud and also invested to make more services accessible to disabled and visually impaired customers
(2) Making business simple, which involves identifying opportunities to simplify activities and communicating clearly and openly
(3) Making a difference to the communities they serve, which involves primarily helping the disadvantaged and new homeowners but also supporting small and medium-sized businesses (SMEs) and acting fairly and responsibly at all times
Extracts from The People’s Bank’s balanced scorecard are shown below:
| Performance measure | 20X6 | 20X6 |
|---|---|---|
| Financial perspective | Actual | Target |
| Return on capital employed (ROCE) | 11% | 12% |
| Interest income | $7·5m | $7m |
| Net interest margin (margin achieved on interest income) | 2·4% | 2·5% |
| Amount of new lending to SMEs | $135m | $150m |
| Customer perspective | ||
| Number of first-time homebuyers given a mortgage by The People’s Bank | 86,000 | 80,000 |
| Number of complaints (per 1,000 customers) | 1·5 | 2 |
| Number of talking cashpoints installed for the visually impaired | 120 | 100 |
| Number of wheelchair ramps installed in branches | 55 | 50 |
| Internal processes | ||
| Number of business processes within The People’s Bank re-engineered and simplified | 110 | 100 |
| Number of new services made available through ‘mobile banking’ | 2 | 5 |
| Incidences of fraud on customers’ accounts or credit cards (per 1,000 customers) | 3 | 10 |
| Total carbon dioxide emissions (tonnes) | 430,000 | 400,000 |
| Learning and growth | ||
| Number of colleagues trained to provide advice to SMEs | 1,300 | 1,500 |
| Number of hours (paid for by The People’s Bank) used to support community projects | 1,020,000 | 1,000,000 |
| Number of trainee positions taken up by candidates from Nawkrei’s most disadvantaged areas | 1,990 | 2,000 |
| Number of community organisations supported (either through funding or by volunteers from The People’s Bank) | 7,250 | 7,000 |
Required:
(b) Using all of the information provided, including The People’s Bank’s vision and values, discuss the performance of The People’s Bank in 20X6.
Note: Use each of the four headings of the balanced scorecard to structure your discussion. (16 marks)