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2.5 Changing business modes Branch banking in decline The branch is the traditional image of a bank. The following graph illustrates the trend towards reducing numbers of branches. 8 Figure 2.4 Bank branch numbers 3000 2800 2600 2400 2200 2000 1800 1600 1400 1200 1000 CBA WPAC ANZ NAB 1992 1993 1994 1995 1996 1997 1998 Source: Bank Annual Reports. The traditional concept of a branch offering all services is also changing. Banks are setting up specialist transaction centres and centres that target specific audiences. The National Australia Bank (NAB) has 219 specialist business centres in addition to its 903 traditional branches and in Australia. The ANZ has a Business Direct Centre that offers lower priced products for smaller business with simple lending and financial service needs. Mobile personnel There is a trend toward the use of mobile lenders and investment advisers. Westpac have 1 000 mobile staff and during a 12 month period the Commonwealth Bank’s mobile bankers conducted almost 50 000 home loan interviews, and over 24 per cent of all Commonwealth home loan approvals were generated by mobile bankers. New intermediaries The Commonwealth Bank has traditionally used Post Offices to provide additional branch type services for their customers. The Commonwealth plans to extend this with Woolworths Ezy Banking (see http://www.commbank.com.au/Today/ShareholderInfo/TBC-Prism.htm) Westpac is working with rural communities and introducing in-store branches in pharmacies, general stores and newsagencies. Disintermediation in financial services Banks have traditionally provided an intermediary service of matching deposits with funding for loans. E-commerce provides an opportunity for banks to be disintermediated from this activity. The direct provision of loans by non-banking entities such as superannuation organisations and insurance companies could be an indication of this disintermediation. 8 Calculated from information provided in the annual reports of the National Australia Bank, Commonwealth Bank of Australia, Westpac and the Australian and New Zealand Banking Group Limited. The data does not separate out increases in branches obtained through acquisitions of overseas activities, so probably understates the fall in branches used in Australia. 96
Traditionally banks have played an important role in the payment approval process. The trend towards the use of credit cards (versus cheques) has had (and still does have) the potential to reduce the role of banks in the payment loop. Banks have retained some control in this area to date as the card issuing body. The move towards SET in the online payment areas will re-intermediate banks back into the online payment approval process. The likely acceptance of some form of digital cash in the future could potentially disintermediate banks again from the payment approval process. Elimination of value is also possible in the sector. Banks now act as intermediaries in matching depositors with funds to loan applications. The function could move to brokered markets, and even to a direct market. With payments, the provision of EFTPOS enabling payments was a valuable service to bank customers. Now with services such as Telstra’s SureLink, the payment service is provided as part of a larger service. This commoditises the pure payment service. Interview: Tim Batten, National Australia Bank, IRG member, 12 July 1999 Value has been eliminated by Internet trading: buyers can now trade for $30 per trade regardless of the value of the trade, whereas it would have been twice that cost. This also creates the opportunity for unbundling, for example for third party clearing perhaps. One of the reasons for the changes at the ASX is the possibility of losing to new competitors. The ASX is not a core service provider, but could be unbundled from this position, in fact disintermediated. The advent of digital certification will be important for the ASX. This will open possibilities for further unbundling and is a risk for brokers who currently play a ‘certifying’ or risk management role for trades. Interview: Jason Anderson, Australian Stock Exchange, IRG member, 12 July 1999 New value and services Greater use of e-commerce is also opening new opportunities in this sector. Regulatory reform, competition and the potential of the new technologies are breaking down distinctions between the roles that companies in the banking and finance sector play. E-commerce over the Internet has enabled banks to move into stock trading. The Commonwealth Bank’s ComSec is a predominantly online share trading service, although it does provide a supporting telephone service. The ANZ has recently announced an alliance with E*TRADE Australia for ANZ customers to trade securities online. There is a trend for banks to offer complete financial services to individuals and organisations. This typically includes investment advice, insurance, superannuation, share trading, and funds management. E-commerce is creating new value in the banking and finance sector. E-commerce assists organisations in becoming virtual CFOs for small businesses by handling all financial services and providing accounts receivable and payable services. The aim is to provide a full service from operational through to strategic. For consumers, the concept is to package services around ‘life events’ (marriage, retirement) and to provide focussed advice and services. Internally, e-commerce is moving processes from the bank to the customer, for example instead of a loan officer completing an application in a face-to-face interview, the customer completes a form on the web. Interview: Tim Batten, National Australia Bank, IRG member, 12 July 1999 97
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© Commonwealth of Australia 2000 I
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Table of contents Foreword ........
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Part 2 - Case studies Section One I
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Executive summary E-commerce is sti
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Part 1— economic analysis
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Chapter One Study context, aims and
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Within the business-to-business cat
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Table 1.4 Projected growth in econo
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Chapter Two Economic issues What di
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Exhibit 2.1 Disintermediation effec
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Table 2.1 E-commerce impact on vari
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Chapter Three Changes ahead—indus
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Health Significant efficiencies sta
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Chapter Four Economy-wide assessmen
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Direct changes and flow on impacts
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consumption relative to economic ac
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External competitiveness Greater us
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Industry outcomes Greater use of e-
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Food products The food products sec
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people with differing occupational
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Tasmania and the Northern Territory
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Table 4.2 Regional growth and emplo
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The data for country regions (Exhib
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impacts are a reasonable representa
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Chapter Six Policy implications and
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Appendix A Study methodology, shock
Page 57 and 58: confidence. This is at the expense
Page 59 and 60: All of the GDP gain generated by ch
Page 61 and 62: (s11) Saving of particular inputs I
Page 63 and 64: Table A.1 continued Commodity Per c
Page 65 and 66: Table A.2 continued Engine & Boiler
Page 67 and 68: Table A.2 continued Safety Inspecto
Page 69 and 70: Table A.3 continued Industries 2007
Page 71 and 72: B.2 The structure of MONASH The cor
Page 73 and 74: simulations it is assumed that the
Page 75 and 76: Table B.1 (Continued) MONASH-RR Reg
Page 77 and 78: C.2 Forecasts for macroeconomic var
Page 79 and 80: other grains, iron and non-iron ore
Page 81 and 82: The numbers in column (II) of Table
Page 83 and 84: Productivity growth over the histor
Page 85 and 86: forecast of a 0.1 per cent decline
Page 87 and 88: Productivity growth in the construc
Page 89 and 90: Employment prospects in the sector
Page 91 and 92: Table D.1 continued Textiles, cloth
Page 93 and 94: Table D.1 continued Health, educati
Page 95 and 96: Table D.2 continued 45 Bags and Con
Page 97: Part 2 — case studies
Page 100 and 101: Industry sectors’ use of e-commer
Page 102 and 103: e-commerce were chosen. Key questio
Page 104 and 105: Banking For some time now most of t
Page 106 and 107: 2.3 Cost savings Banks are keen to
Page 110 and 111: Banks are also looking to take adva
Page 112 and 113: NAB, as a multinational, is already
Page 114 and 115: activities such as consumer electro
Page 116 and 117: Box 3.2 Building a business on e-co
Page 118 and 119: One of the issues for all industrie
Page 120 and 121: 108
Page 122 and 123: Box 4.2 Australia Post and e-commer
Page 124 and 125: Opportunities are being created for
Page 126 and 127: Value can be transferred into Austr
Page 128 and 129: Continued use of email and the deve
Page 130 and 131: E-commerce allows some flexibility
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Page 134 and 135: are introduced to market at a start
Page 136 and 137: educe the duplication of assessment
Page 138 and 139: 6.3 Cost savings as a result of ele
Page 140 and 141: The primary e-commerce tools for im
Page 142 and 143: New service modes and channels to t
Page 144 and 145: 132
Page 146 and 147: This Section will review the implic
Page 148 and 149: of greater depth. (It should be not
Page 150 and 151: consumers watch five per cent less
Page 152 and 153: artist is the promotion which airpl
Page 154 and 155: New costs The fragmentation and reg
Page 156 and 157: gambled. The development of Interne
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146
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Making a purchase over the Internet
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Customers who access troubleshootin
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they does not actually sell those i
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Key points There are few other sect
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e-commerce allows quicker order pro
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9.3 New costs The demand for busine
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How a ticket is sold, through an ag
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Box 10.1 Case study: E-commerce and
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The education and training sector h
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166
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11.2 Production Manufacturing busin
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Opportunities for re-intermediation
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Value could transfer within the sec
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174
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years’ time. 30 This reflects an
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seeks to provide a point of referen
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To a small extent, direct selling t
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Box 13.1 Austmine—a window for th
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Box 13.2 Leaving mining sites for w
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