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Unformatted text preview: perations. A few examples may help to reinforce this point.
Take the area of special offers. These may be part of an overall strategy, or could be in response to the actions
of competitors. For instance, retail banks are always interested in trying to attract students, for a number of
reasons. These young people will be the wage-earners of tomorrow, and today they tend to be short of money
and therefore need credit services, so on these characteristics alone they are interesting. It is also easier to
acquire a customer who has not yet established a relationship with another bank. Special offers might include
free banking, short-term discounted rates on overdrafts and a range of other offers. By utilizing rules to manage
these decisions, based on the criteria of whether the operation is on behalf of a student or not, the bank is now
in a position to alter the offers at a moment’s notice. So for example, if the offer involves free banking for 12 Page 12 months, and a competitor makes a similar offer for 24 months, all that has to be done is to change the rule
covering bank charges to specify that if the customer is a student, make the free period 24 months. No
applications needed to change. What could have taken a few weeks can now be done in a few minutes.
In the area of corporate banking, the need for agility is also apparent. Interest rates, counterparty risk, liquidity
management and foreign exchange movements are just some examples that will affect the decisions being
taken in banking operations, and the ability to quickly change the criteria for operational decisions is extremely
valuable, potentially saving money, increasing profitability and reducing risk.
Agility is also helped in another way. For more complex decisions, for example in the area of trading derivatives,
it may be that the business spet will need to do some research and take advice before being able to come
up with the new recommendations. The BRMS-supported rules-based decisions approach provides the ability
for pooling expert knowledge, in this case in derivatives trading, to quickly come up with the optimal approach
to decision-making. Ru...
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This note was uploaded on 01/29/2014 for the course ACC 230 taught by Professor Xia during the Winter '13 term at Bloomsburg.
- Winter '13