Digitalization of E-Commerce in Bank of Ireland Report

Introduction

Bank of Ireland is the largest and oldest bank in Ireland. The Bank’s staff headcount is more than 11,000 employees, and its revenues exceeded €3 billion in 2014 (Bank of Ireland, n.d.). The Bank is a subsidiary of Bank of Ireland Group plc, and it was instituted by Royal Charter in 1783 (About the Group, n.d.). The analyzed bank is a merchandising and commercial bank with the following objectives: renovate the bank, serve clients perfectly, and “grow sustainable profits” (About the Group, n.d.). The type of industry is banking and financial services, such as deposit services, mortgages, loan services, international asset and debt financing, home insurance, leasing, trustee, and other services. The Bank uses such technologies as the mainframe computer for recording all customers’ transactions, IT services, like cloud adoption and expansion, telecoms, business-to-business software, and internet of things (gateways, silicon chips, and antennas) (Bank of Ireland Technology Sector, 2016). However, the use of these technologies is not sufficient for the further expansion of the Bank’s e-commerce.

Bank of Ireland could improve its functions and activities, reviewing its digitalization path and making several adjustments. According to Martinez (2019), the following steps of the digitalization path can help advance business activities: customer orientation and operational efficiency, understanding the operation, develop solutions with technology, and solutions implementation and integration (p. 1727). This report will discuss the potential digitalized future of the Bank of Ireland, utilizing these four steps.

Potential Digitalized Future

Bank of Ireland is a customer-oriented commercial bank, with most of its services aimed at Irish consumers and business customers. Therefore, customer orientation and orientational efficiency are of high importance for the digitalization of the bank’s e-commerce. This section will discuss the four steps toward the potential digitalized future of the Bank of Ireland.

Customer Orientation and Orientational Efficiency

The deficiency of digital technology in the Bank of Ireland had a negative effect on its customers. The interview with the Senior Director in the Property Finance division of Corporate Banking, Michael Murray, revealed the importance of the advance of digitalization for the Bank of Ireland. Murray said that before the introduction of modern technologies, all transactions and bank operations were performed manually, and it might take up to ten days before the operations would be completed (Digital-Native, 2020). The state of affairs has changed meaningfully with the expansion of mobile phones and computers. According to J.P. Morgan’s 2019 report, Irish people favor smartphones and computers as e-commerce methods, and “mobile commerce accounts for 42 percent of total e-commerce sales” (para. 29). To satisfy customers’ needs, banks should ensure the expansion of secure payments and mobile digital wallets. As the Bank of Ireland advances its mobile payment services and promotes contactless payments through debit cards, the number of customers and bank operations will increase.

The Central Bank of Ireland has issued the discussion paper, in which it reviews consumer behavior and digitalization. According to this review, the use of contactless credit and debit card payments has nearly tripled “from 1.3 million a week in March 2016 to nearly 3 million a week in March 2017” (Central Bank of Ireland, 2017, p. 13). Therefore, the Bank of Ireland could improve operational efficiency, producing more debit and credit cards with chips for contactless payments and enhancing mobile banking apps that would facilitate bank-customer relationships.

Understanding the Operation

Understanding the operation means searching for possible improvements in the technology sector of the Bank of Ireland. The Bank realizes that modern devices and channels influence the customers’ choices and challenge bank services. People prefer to use online banking systems because they save time. Besides, multiple gadgets and digital platforms make the “customer journey” more complex, stimulating banks to search for novel approaches to the relationships with their clients (Kennedy, 2018). As the Bank of Ireland understands these changes, it will be able to find solutions to the problems and meet the customers’ needs depending on their personal experiences.

Develop Solutions with Technology

To re-establish the relationships with clients and adjust to global changes in e-commerce and banking, the Bank of Ireland should develop improvement projects in the technology sector. According to Kennedy (2018), the Bank is planning to use data science “to predict consumer behavior with greater accuracy” (para. 14). Thus, the Bank of Ireland will need to choose the right cloud technology to gather the data about their customers from all different touchpoints and bringing this information together. Such an application will decrease paperwork and open new opportunities for the Bank and its customers. To develop such a cloud system, the Bank will need to hire new specialists or educate the current employees who will be able to work in this sphere efficiently.

Solutions Implementation and Integration

This step involves the Bank’s organizational culture and the employees’ safety and desire to work. If the Bank of Ireland decides to develop a new cloud system or an application that allows it to gather information about its customers, it will have to ensure that the employees will be able to create such a system. Employees should be aware of new technologies and should use them as an instrument to improve the customers’ services. Moreover, if the solution implementation requires additional investments, some cuts or even branch closures will be needed. For example, the Bank of Ireland could close some branches in the areas where digital banking is preferable, thus saving money on the development of the new cloud system. According to Brennan (2021), seven in ten “personal customer product applications are made digitally,” and this number will grow to eight in ten by the end of this year (para. 16). Consequently, the implementation of the new cloud system will be relevant and crucial for re-establishing the relationships with the customers and reaching a new level of financial development.

Ways in which the Bank of Ireland Can Take Advantage of Emerging Technologies

Emerging technologies bring changes to different financial service sectors, including the Bank of Ireland. The Bank can take advantage of these technologies, improving the customer services and offerings and reducing costs. Modern consumers expect a customer-oriented and seamless experience, thus digital applications and technological innovations can help the Bank satisfy the customers’ needs. Investing in cloud and software will reduce infrastructure costs and ensure security, resilience, and scalability. Advanced analytics will promote the usage of the right tools for a quick realization of benefits. Robotic process automation will allow the automatization of repetitive manual tasks, saving time and money. These and other technologies will enable the Bank of Ireland to grow and meet the clients’ needs.

Challenges and Issues That Can Be Foreseen in the Adoption of Such Technologies

The main challenge that can be foreseen in the adoption of new technologies is location and security risks. Cloud systems and software may be at risk of data leaks or virus infections. Therefore, the Bank should manage risks and devise a system for protecting the cloud and applications from data leakage and fraud. In addition, innovations require rapid changes in delivery methodologies, which means that the Bank will need to improve the qualifications and educate its employees continuously. Finally, ethical considerations about gathering customers’ data can also be considered as a challenge because not all clients will agree that their online operations and searches are traced. Thus, the Bank should consider these and other issues before adopting any new technologies.

Recommendations and Conclusions

Digitalization is an important step forward in the improvement of financial sectors and customer services. The Bank of Ireland will make this process easier if it involves in partnership with modern technology companies. Such a partnership will allow the Bank to receive new software and other products earlier and outwit the competition. In addition, the Bank should invest in its analytics technologies to be able to gather only the most useful insights and data. Adopting automation will minimize human-made errors and save time on manual procedures. Such innovations as e-wallets and blockchain technologies will improve customers’ experience and change digital transactions fundamentally. Finally, if the Bank of Ireland invests in innovations instead of maintenance, it will attract more customers because modern people strive for novelties and uniqueness.

Having discussed the potential digitalized future of the Bank of Ireland, one can conclude that this Bank will need to take several steps to implement the necessary changes. The Covid-19 pandemic became the first step in the digitalization process, making the Bank close its branches and consider the development of online services. Nowadays, more and more people utilize online banking apps to buy and sell products, which means that the Bank should invest in this field to re-establish the relationships with clients and enhance the financial services.

References

About the group. (n.d.). Bank of Ireland. Web.

Bank of Ireland case study. (n.d.). Digital strategy. Web.

Bank of Ireland technology sector. (2016). Bank of Ireland. Web.

Brennan, J. (2021). Covid switch to digital banking underpins BoI plan for branch closures.The Irish Times. Web.

Central Bank of Ireland. (2017).Discussion paper: Consumer protection code and the digitalization of financial services.Web.

Digital-Native. (2020). The importance of the progression of digital technology through Bank of Ireland. Make It Digital by Audiencia. Web.

J. P. Morgan. (2019). E-commerce payments trends: Ireland. Web.

Kennedy, J. (2018). Bank of Ireland prepares for the Netflix-style future of banking.Siliconerepublic. Web.

Martinez, F. (2019). Process excellence the key for digitalization.Business Process Management Journal, 25(7), 1716-1733. Web.