E-Banking and ABC costing

Masters
Assignment
Business
Pages 16 (4016 words)
Download 0
Over the last few years European banks have spent billions of euros on new electronic channels. However, after some years of excitement it was clear that the banks' long-awaited skyrocketing profits from this area would not be netted. Banks have also invested in expanding and improving the IT systems and a number of new e-banking services have been developed.

Introduction

This article explores the implementation techniques of Activity-Based Costing (ABC) in the banking sector on the example of bank in order to analyze the cost structure for traditional and electronic channel transactions. The article shows how it is possible to implement ABC in banking and proves empirically that electronic channels help reduce the costs of both banks and their clients.
The setup and infrastructure to implement e-banking services requires a huge amount of initial outlay. Therefore, European banks have spent billions of euros into building direct channels like the Web, upgrading branches and call centres, and trying to integrate all these channels. Major financial futurists predicted bright prospects to electronic banking. But after some years of excitement it appeared that the banks' long-awaited sky-rocketing profits from this area would not be yielded. Around the world, Internet banks are faltering. This situation requires a profound analysis to be able to understand the real cost of e-banking, and e-bank transactions in particular.
All major banks have declared e-business as one of their core strategies for future developments. Until recently, most of the pricing decisions about e-bank services were made instinctively as the current financial management information systems did not support such analysis.
This research exp ...
Download paper
Not exactly what you need?

Related papers

E-banking in the Saudi Arabian banking sector
This paper aims to analyze the literature available on the concept of customer satisfaction; hence it is divided into two major sections for the purpose of defining a flow. Initially a very concise review of the concept itself is provided, in light of the literature available, it is then extended to cover and analyze in detail the parallel notion of service quality which is often at times…
Target Costing
Target costing in the initial stage allows business to control the design, specification and development technique to control the overall cost. TC provides business with other than basic costing processes. Chen and Chung (2002) discussed the benefit that TC lends by enabling manager to indentify the fraudulent as well as corruption practices in involved departments. Swenson, Ansari, Bell and Kim…
Impact of e-commerce in Banking sector
The concept of electronic commerce is descriptive of the process of conducting commercial transactions of services, goods, and information by means of computer networks. In e-commerce products and services can be bought online. Due to the fact that the banking sector is probably the busiest service sector, running it efficiently usually requires more manpower. Technological innovations such as…
The Influence of Activity Based Costing in Finance Sector
Understanding ABC can show the way to better knowledge of an organization business course of actions and basic expenses. ABC is a financial plan and scrutiny process that estimates operating cost by involving overheads to orders, clientele, services and end-items. It permits managers to discriminate between cost-effective and non-beneficial services. …
E-Banking and ABC costing
This article explores the implementation techniques of Activity-Based Costing (ABC) in the banking sector on the example of bank in order to analyze the cost structure for traditional and electronic channel transactions. The article shows how it is possible to implement ABC in banking and proves empirically that electronic channels help reduce the costs of both banks and their clients.…
Standard Costing
This paper considers the other side or the side in which standard costing has found its inappropriateness and unsuitability. Furthermore, the outcome of the critical analysis of how standard costing works is also evaluated in terms of its effectiveness as a means of control in the global industry and the increase in consumer wealth.…
Costing Principles
A cost purpose is an action or product for that the total or unit cost is to be computed. A cost objective may be the product manufactured or the service delivered, or it may be a department, a course, or a function, all of that are referred to as cost centers. The cost axis is the least unit for that costs are mounted up for reporting and analytical functions.…