E-Banking and ABC costing Assignment Example | Topics and Well Written Essays - 4000 words

E-Banking and ABC belling - Assignment ExampleThis article explores the implementation techniques of Activity-Based Costing (ABC) in the positing sphere on the example of bank in order to analyze the cost structure for traditional and electronic stock transactions. The article shows how it is possible to implement ABC in banking and proves empirically that electronic channels cooperate reduce the costs of both banks and their clients.The setup and infrastructure to implement e-banking services requires a huge measuring of initial outlay. Therefore, European banks have spent billions of euros into building direct channels like the Web, upgrading branches and call centres, and difficult to integrate all these channels. Major financial futurists predicted bright prospects to electronic banking. But after some eld of excitement it appeargond that the banks long-awaited sky-rocketing profits from this area would not be yielded. Around the world, Internet banks are faltering. This s ituation requires a profound analysis to be able to understand the real cost of e-banking, and e-bank transactions in particular. every last(predicate) major banks have declared e-business as one of their core strategies for future developments. Until recently, most of the pricing decisions nigh e-bank services were made instinctively as the current financial management information systems did not prevail such analysis.This research expThis research explores the implementation techniques of Activity-Based Costing in the banking sector on the example of bank in order to analyze the cost structure for traditional and electronic channel transactions. Also conclusions are drawn about the profitability of e-banking transactions.The research addresses the following questions1. How can ABC techniques be implemented in a bank How it is possible to allocate IT expenses to products2. What are the cost elements of e-channel transactions What are the major cost groups3. Are e-channel transact ions cheaper than those made via the traditional channelsChapter 2 Role of E-bankingIn the past, banks have utilize a set of integrated distri yetion channels has provided the basis for them to build strong relationships with their customers. Those banks leading to constellation the way in which products are distributed can often gain long lasting competitive advantages. equivalent ATMs and phone banking, the Internet is seen by many banks today as a new, low cost distribution channel (Feng 2001). Unlike traditional corporate networks (which usually have private computer networks in place), the Internet has lead a mass infrastructure available to an ever-growing segment of the population. It is based on an open, standard protocol for communications, and it is comparatively inexpensive and non-proprietary with global accessibility. Most of all, the Internet is not only cheaper than other distribution channels but also allows banks to reach new customers in new areas more easily ( Feng 2001). The advantages both for banks and their customers are obvious, particularly in terms of cost and convenience. If we assume that the end users have the basic understanding of internet rule then substantial cost savings can be achieved if banks can persuade their