Based on the analysis and exploration of the issues and challenges faced by Commonwealth Bank of Australia, some feasible recommendations have been suggested. The Commonwealth bank will be required to increase its interest rates on deposits to encourage a higher deposit rate by customers. As a result, the bank will increase the level of deposits and solve the problem associated with international market volatility.
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At the same time, the bank can increase its lending rates to deter customers from borrowing but instead prefer depositing. The bank can also shift its operations from products which have been slowly growing. For example, the back can explore other ways to increase deposit funding such as issuing covered bonds to raise money. This can aid commonwealth bank raise its financial deposits in the future.
The bank can counter the future issue associated with regulatory framework by approaching the situation in a systematic way. For instance, the bank will be required to have compliance regulatory framework which complies with the new regulatory framework. In addition, the bank may increase its requirements for borrowing and investments on mortgage.
It may also increase costs of compliance or alter its liquidity targets. Generally, Commonwealth bank requires strategically placed policies which meet the regulatory reforms. The policies which enable the bank align its mission and vision with the regulatory framework.
Technological divide between the young and the old is a major challenge facing the company. Therefore, it is recommendable for the bank to adopt banking applications which are easily understood by the older generation. This will bring more customers on board and assist in increasing its customer clientele. This can be realized through massive awareness campaigns and incentives to new users.
In addition, the bank can offer affordable and secure devices at affordable prices. Another possible idea is for the bank to collaborate with mobile service providers and other stakeholders in coming up with an innovative mobile banking and reduce the overall costs. Technological change in the Australian banking industry will affect Commonwealth bank as it will level the playing ground.
So, for the company to increase its competition, it has to adopt the latest technology as part of vertical integration. This will enable the bank gain a competitive advantage over its competitors and new entrants. For example, the company can design new products which are technologically competitive such as mobile money transfer and online banking. As a result, the company will gain leverage in the competitive banking industry.
The Commonwealth Bank of Australia will have to offer products and services which meet customers’ expectations and knowledge. By understanding the change in customer behaviours, needs and segments, Commonwealth bank will deliver products and services which fit to these demands and expectations. As a result, the bank will not be afraid to lose its customers in the future.
Adaptation to changing customer landscape and demands will give Commonwealth Bank a competitive advantage over its rivals. In addition, the bank will have to shift its financial focus and concentrate on addressing the needs and the preferences of the customers. To achieve this, there will be the need to shift its focus and come up with customer value propositions.
Market and customer segmentation is highly recommendable for Commonwealth Bank to accommodate emerging markets and new customers. This is because increase in customers’ expectations and knowledge will require quality services and products which meet the demands of those specific customers.