Creating Value in Financial Services: Strategies, Operations and Technologies PDF
Preview Creating Value in Financial Services: Strategies, Operations and Technologies
CREATING VALUE IN FINANCIAL SERVICES Strategies, Operations and Technologies CREATING V ALUE IN FINANCIAL SERVICES Strategies, Operations and Technologies Edited by Edward L. Melnick Praveen R. Nayyar Michael L. Pinedo Sridhar Seshadri Stern School ofBusiness New York University .... " Springer Science+Business Media, LLC Library of Congress Cataloging-in-Publication Creating value in financial services : strategies, operations and technologies / edited by Edward L. Melnick ... [et al]. p. cm. Includes bibliographical references. ISBN 978-1-4613-7081-9 ISBN 978-1-4615-4605-4 (eBook) DOI 10.1007/978-1-4615-4605-4 1. Financial services industry--Management. 1. Melnick, Edward L. HGl73.C74 1999 332. 1' 068--dc2 1 99-0474 Il Copyright © 2000 by Springer Science+Business Media N ew York. Second Printing 2002. Originally published by Kluwer Academic Publishers, New York in 2000 Softcover reprint ofthe hardcover 1st edition 2000 AII rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC. Printed on acid-free paper. This printing is a digital duplication ofthe original edition. This book is the result of a joint effort by • Center for Information Intensive Organizations • The New York University Salomon Center • Department of Operations Management • Department of Statistics and Operations Research at the Stem School of Business, New York University. CONTENTS Foreword xv Lzrry Zicklin Preface xix 1. Creating Value in Financial Services 1 Edward L Melnick, Praveen R Ncqyar, Michael L Pinedo and S ridhar Seshadri SECTION I: CUSTOMER VALUE FOCUSED STRATEGIES 2. The Changing Global Environment of Financial Services 23 Alexander llinno'!) Kan 3. Universal Banking: Does it Work? 37 David Rogers 4. Universal Banking: A Shareholder Value Perspective 53 Ingo Walter 5. Redefining Customer Relationships 85 in the Age of the Ascendant Customer Thomas L Monahan III 6. Out of the Fog: Creating Value by 103 Assembling and Managing a Portfolio of Services Praveen R. Ncqyar 7. Challenges of Product Delivery in Emerging Markets 131 Akshqya Bhargava 8. Modeling Services of Financial Institutions 143 in Emerging Markets Edward L Melnick viii CONTENTS SECTION II: CUSTOMER VALUE FOCUSED SERVICES 9. Creating Value: Evolution and Management 157 of Financial Derivatives John O. Matthews and Cathy A. Rusinko 10. Electronic Commerce and Financial Services: 179 Going for Broke? Andrew Hosking, Ajit Kambil and Amanda Lister 11. The Internet Channel Revolution: 195 The Case of Charles Schwab Sanjeev Dewan and Haim Mendelson 12. Lessons from Developing the Yield Book 219 Ernest R Battifarano SECTION III: CUSTOMER VALUE FOCUSED SYSTEMS 13. Impending Revolution in Corporate 253 Information Technology Departments Kevin McGillowqy 14. Financial Service Networks: 267 Access, Cost Structure and Competition Udqy S. Karmarkar 15. The Potential for Virtual Work to Enhance Value 289 in Financial Services Firms Roger LM. Dlmbar and Raghu GaT'Nd 16. Designing Electronic Market Institutions for Bond Trading 303 Ming Fan, Jan Stallaert, andAndrew B. Whinston 17. Staffing Challenges in Financial Services 327 Richard C Lzrson and Edieal J Pinker 18. Call Centers in Financial Services: 357 Strategies, Technologies and Operations Michael L Pinedo, Sridhar S eshadti and J George S hanthikumar CREATING VALUE IN FINANCIAL SERVICES ix 19. PruServ™: A Call Center Support System 389 John A/ouisa, William Anderson, Richard Castro, Raymond Ennis, J~ Gevarler and RrlSseU Pandolfo SECTION IV: CUSTOMER VALUE FOCUSED MEASURES OF SUCCESS 20. Process Improvement in Financial Services: 405 A Focused Approach Paresh D. Patel 21. How do Financial Services Stack Up? Findings from a 427 Benchmarking Study of the US Financial Service Sector Richard B. Chase, Aleda V. Rnth and Chris Voss 22. Value Creation and Process Management: 447 Evidence from Retail Banking Frances X. Frei and Patrick T. Harker 23. Bank Productivity: Promises Unrealized 461 W ~ne 1. Cutler 24. Productivity in Service Industries: 475 Implications of the Boskin Commission Report Rnbert S%W CONTRIBUTORS John Alouisa Sanjeev Dewan Prudential Securities Inc. Business School One New York Plaza University of Washington New York, NY 10292 Seatde, WA 98195 William Anderson Roger L.M. Dunbar Prudential Securities Inc. Stem School of Business One New York Plaza New York University New York, NY 10292 40 West 4th Street New York, NY 10012-1118 Ernest Battifarano Raymond Ennis Salomon Analytics Prudential Securities Inc. 388 Greenwich Street, 10th Floor One New York Plaza New York, NY 10013 New York, NY 10292 Akshaya Bhargava MingFan Citibank a.s. Graduate School of Business 178 Evropska The University of Texas at Austin Prague 166 40 Austin, TX 78712 Czech Republic Richard Castro Frances X. Frei Prudential Securities Inc. Harvard Business School One New York Plaza Soldiers Field NewYork,NY 10292 Boston, MA 02163 Richard B. Chase RaghuGarud Marshall School of Business Stem School of Business University of Southern California New York University Los Angeles, CA 90089-1421 40 West 4th Street NewYork,NY 10012-1118 Wayne I. Cuder Jeffrey Gevarter First Manhattan Consulting Group Prudential Securities Inc. 90 Park Ave One New York Plaza New York, NY 10016 New York, NY 10292 xii CONTRIBUTORS Patrick T. Harker Edward L. Melnick The Wharton School Stem School of Business University of Pennsylvania New York University Philadelphia, PA 19104-6366 40 West 4th Street New York, NY 10012-1118 Andrew Hosking Haim Mendelson Andersen Consulting Graduate School of Business 1345 Avenue of the Americas Stanford University New York, NY 10105 Stanford, CA 94305-5015 Ajit Kambil Thomas L. Monahan III Andersen Consulting Corporate Executive Board Company 100 Williams Street 2000 Pennsylvania Avenue Wellesley, MA 02181 Washington, DC 20006 Uday Karmarkar Praveen R. Nayyar Anderson Graduate School of Stem School of Business Management New York University University of California in Los Angeles 40 West 4th Street 405 Hilgard Ave New York, NY 10012-1118 Los Angeles, CA 90024 Richard C. Larson Russell Pandolfo Sloan School of Management Prudential Securities Inc. Massachusetts Institute of Technology One New York Plaza Cambridge, MA 02139 New York, NY 10292 Amanda Lister Paresh D. Patel Andersen Consulting Corporate Executive Board Company 1345 Avenue of the Americas 2000 Pennsylvania Avenue New York, NY 10105 Washington, DC 20006 John O. Matthews Michael L. Pinedo EcononUcsI>epartment Stem School of Business Villanova University New York University Villanova, PA 19085 40 West 4th Street New York, NY 10012-1118 Kevin McGilloway Edieal J. Pinker Lehman Brothers William E. Simon 3 World Financial Center Graduate School of Business New York, NY 10285 University of Rochester Rochester, NY 14627 CREATING V AWE IN FINANCIAL SERVICES xw Alexander H.G. Rinnooy Kan Jan Stallaert INGGroup Graduate School of Business P.O. Box 810 The University of Texas at Austin 1000 AV Amsterdam Austin, TX 78712 The Netherlands David Rogers Robert Solow Stem School of Business l)epartrnent of Economics New York University ~assachusetts Institute of Technology 40 West 4th Street Cambridge, ~ 02139 New York, NY 10012-1118 Aleda V. Roth Chris Voss Kenan Flagler Business School London Business School University of North Carolina Sussex Place, Regent's Park Chapel Hill, NC 27599-3490 London NW1 4SA, United Kingdom Cathy A. Rusinko Ingo Walter ~anagementl)eparttnent Stem School of Business Villanova University New York University Villanova, P A 19085 44 West 4th Street New York, NY 10012-1118 Sridhar Seshadri Andrew B. Whinston Stem School of Business l)eparttnent of ~anagement Science New York University and Information Systems 40 West 4th Street The University of Texas at Austin New York, NY 10012-1118 Austin, TX 78712 J. George Shanthikumar Larry Zicklin Haas School of Business Neuberger, Berman, LLC University of California at Berkeley 605 Third Avenue Berkeley, CA 94720 New York, NY 10158
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