Competitive Strategies in Sri Lankan Banks

 Competitive Strategies in Sri Lankan Banks

1.0       Introduction

 

The need for businesses to create competitive strategies, both for the benefit of the company and for the attraction of the customer has been the most challenging aspect that contributes to bringing about changes in the operational landscape of many industries. One such industry influenced by this phenomenon is the banking industry. Such creation of competitive advantages has benefitted customers in performing their banking-related tasks in less time, while offering new advancements in the ways in which customers interact with banks.

 

An area in which banks have evolved and developed in this sense is the advancements in standard ATMs and deposit machines which provide the facility to deposit money without direct contact with the bank; a facility that allows customers to make cash deposits that are instantly credited.

 

This assignment explains my own experience of the technological advancement introduced to the ATM machine, which has currently evolved to its present status known as the Cash Deposit Machine (CDM), through the TAM model (Davis, 1989):

  

 Figure 1: TAM Model

 

2.0       Discussion

 Global banking systems and their technological advancements have been well ahead of Sri Lanka, and it was only in 1971 that a savings bank with a 100% government security was initiated in the country. Accordingly, the National Savings Bank (NSB) was established in 1971 with a Special Act. Although NSB has a long history to its name, it was only about 15 years ago that the concept of ATMs were introduced in the country in banks in Sri Lanka, however not in an advanced form as they are today with links within branches of the same bank and even across different banks in and out of the country, but in the form where customers had very minimal use: the ability to withdraw money from an account.  

 

With time, ATMs were not only linked from one branch to another of a particular bank, technological advancement also provided the ability for a customer to deposit cash through an ATM machine; a concept which was first introduced by NSB in Sri Lanka. Yet, despite the facility provided through machine, it was found that ATM cash deposits did not reach the estimated customer response.

 

According to the TAM model, this outcome can be explained as a failure in the perceived usefulness of the newly introduced feature to ATM machines, where the perceived ease of use that the cash deposit facility was supposed to have given, was not actuated in customer response to the venture.

 

In other words, the estimated behavioural intention of the customer, or the customer response to the newly introduced technological advancement in the ATM structure, where for the first time a customer could deposit cash to his/her own account via machine failed. Several reasons can be provided for the failure in the usage behavior or customer response to this particular technological advancement.

 

Firstly, the social attitude 15 years ago, where face-to-face communication was preferred as the mode of interaction over technological interface-based communication which is most common today, could have had a major impact on customer response and attitude towards the acceptance of the new technology. Second, given the fact that it was only NSB which introduced the facility at first when other banks still had traditional, over-the-counter transactions for cash deposit, customers may have had disinterest, lack of confidence and awareness and trust to utilize the new feature. Thirdly, the failure in the usage behavior can also be explained since even though it was possible to deposit cash through machine, technology at the time was not advanced enough to instantly credit the deposit to the customer account, and thus took a day or two sometimes for the transaction to be completed.    

 

Today, the CDM has evolved and come a far way since then, and with other banks having introduced CDM through ATM machines across the country, there is more favourable customer response in the way people accept the new technology. Besides, the CDM feature today is updated online instantly, and is far more effective than before, and usage behavior has adapted accordingly to present times when monetary transactions are required more instantly and customers feel comfortable to face a machine than to have actual face-to-face interaction with banker after standing in queues, waiting in line. The advancement of banking customer service in the face of competitiveness amongst banks has also assured that even if a customer approaches a CDM machine and requires assistance, banks do provide assistance to operate the machine, based on the perceived ease of use for both customer and banker, and the banks need to maintain good customer service and relations. 

 

3.0       Conclusion

 

The above discussion of the TAM model based on my personal experience in relation to the ATM cash deposit facility has proved that the TAM model’s assumptions are highly determined on features such as user adaptability, attitude and awareness, which are highly sensitive factors of a community and banks, as industries or business ventures, need to focus more on how to tap into the said volatile dimensions of a society and its people, it they require better reception by customers to advancements in technology.