personalized service, since it was really personal - they were handled by the same
employee of the bank, and this person knew them well.
According to the control systems, the banks relied on the honesty and
professionalism of their employees, as well as on occasional irregular inspections.
Although initially this model worked well, it did not go beyond a small amount of
operations. However, in today's world of centralized competition, such a model cannot
be applied because of high costs and a potential high risk of internal fraud.
The back-office branch model. As the number of clients that served in one branch
of the bank grew, the banking industry began to use methods that borrowed from the
production sector. There was a specialization when work with clients was transferred
to one group of employees, but functions of sales support and back-office moved to
another group. Due to the specialization in each group it was possible to select people
who better meet the requirements for performing certain functions. Thus,
communicative extroverts had significant success in sales to customers, and pedantic
introverts were more suitable for complying with strict rules of back-office.
With this model, if the head office made a conscious effort, the control system
improved, because the back-office staff could balance the enthusiasm of the sales
professionals which they experienced in connection with any client or operation.
However, the subordination of the back-office to the head of the department (manager)
who must fulfil the sales plans may lead to a decrease in control and to the fact that the
staff of the back office that works in the offices becomes unreasonably expensive.
The model of centralized operations. When the task of personnel working with
clients, separated from other tasks, and the work is dematerialized (i.e. presented as
electronic data or scanned paper documents), the operations previously performed in
the office can and should be centralized and transferred into a single point of sale. This
allows economies of scale to be exploited through the integration of work, provides a
standardization of processes high level by improving the quality of their physical
monitoring, and also limits the possibility of internal fraud, since the staff of the back
office no longer submits to the branch manager, the branch aimed at implementing the
sales plan, and it does not feel pressure from its colleagues, specializing in sales, rather
than sitting next to each other.
Moreover, when transferring the bulk of the back-office staff from the bank
branch, new offices can be made smaller in size, thus reducing the total amount of real
estate spending while expanding the network of institutions. The creation of one or two
(for reserve) operational centres is much cheaper than the placement of back-office
staff in branches, as staff can be more efficiently seated in a large open space, and the
operating centres are usually located in "cheap" regions than retail outlets.
The presence of a centralized operating group allows to make a huge leap in terms
of both performance and control. New tools and approaches can be introduced. One
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