Impact Of Reengineering In Banking

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CHAPTER ONE INTRODUCTION 1.1 Background of the Study The globalization of the financial market has hinged upon financial institutions to make changes on their operational processes to endure beyond local competition. This tendency has led many financial institutions in developing countries such as Nigeria to improve upon its customer service with quality, speed, reduced operating cost and enhance profitability performance (Randle, 1995). As the financial market consolidates due to mergers and acquisitions of banks and up-to-date strategy, banking services has innovated into personalized banking portfolio management. The resultant effect is that banks will no longer focus on cutting costs alone, but rather on simultaneously improving services…show more content…
Business process reengineering is perhaps the most popular business concept since the 1990’s (Davenport, 1998). Many organizations have initiated reengineering efforts and often use the term reengineering to describe what they do, be it incremental process improvements, downsizing to even new information technology systems. This signifies the popularity of the concept of reengineering among businesses and even the public sector. The concept of reengineering has however been around even before the 1990’s; (Grover & William, 1998). Some scholars argue that it is a derivative of scientific management and further enhanced by the value chain concept (Porter, 1985). Business process reengineering also has its roots in quality management and process improvement, however the key aspect of reengineering is starting from a clean slate. The competitive pressure to meet customer expectations is growing at an ever faster pace. The steady improvement of products and services is no longer sufficient to survive in the global…show more content…
The customer retention became a key factor in determining the success of bank. The bank that has the largest customer base and highest customer retention rate will be a market leader in the industry. Hence, the quality of customer service becomes a driving force in ascertaining business survival in the banking industry (Tang and Zairi, 1998). Many scholars see re-engineering as a return to the mechanistic ideas of Frederick Winslow Taylor. As explained by Hammer and Champy (1993), the four general themes of BPR are process orientation, the creative use of information technology (IT), ambition and rule breaking. Such a clean slate perspective enables the designers of business processes to disassociate themselves from today's process, and focus on a new

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