Problem Analysis, Recommendations, and Conclusion

Problem Analysis

Valley National Bank’s mission statement states that Valley's mission is to provide superior banking services in a prompt, accurate and courteous manner. This statement can be found at www.valleynationalbank.com along with their general statement and code co conduct guidelines. They have grown a tremendous amount since the beginning of their first branch back in 1927 and will continue to grow through their acquisitions.

During the last few years technology has been constantly and rapidly changing. This is something that has tremendously affected everyone, whether personal or business. Banks have not been left behind in this field either. Technology has advanced so much for the banking industry that you no longer need to visit a branch if you want to make a deposit of take out cash. Valley faces a great challenge in the technological world when it comes to their competition.

VNB currently has over 200 hundred branches all across New Jersey and in parts of New York. With its many branches they come to have a strong customer base. Acquiring new customers is something that is a constant pursue for VNB or any other bank. One of the major things that attract people to banking is what they can get for free or what “cool” new things that bank is using.  People stay with banks for longer periods of time because of the switching costs. One way that VNB tries to grab new customers is by making their transition as easy as possible.

Once a customer has established an account with VNB they can register to use online banking. Online banking gives the customers banking at their finger tips 24 hours a day seven days a week. Valley uses a very simple system to register their customers to their online banking. Customers log into www.vallenationalbank.com and click to enroll. They will then be prompted to a screen to fill out their personal information

The questions that are asked in these steps are very simple questions to the customer. The process should only take them about 5 minutes. Once the customer has completed the above screens they will be given a notice that tells them that a confirmation email will be sent to them to verify that they are the actual account owners. The page is marked by the FDIC stamp to help the customer feel safe and also be aware of the fact that Valley is FDIC insured.

Once the customer has completed the application and they receive their confirmation notice they can then begin to use their online banking. The screen below shows a sample of what the customer can view when they are on the online banking main screen. They can make transfers and check balances of their various accounts without any hassles.

 Valley also offers bill payment to their customers to lessen the amounts of checks that they have to write on a monthly basis. This system allows the customer to reminders or automatic payments every month without the customer having to even sign in to make the payment. VNB bill payment is also a free feature that valley offers with their free online banking.

Recommendations

One of the things that is holding VNB from competing with other banks, aside from their size, is their lack of technology. Other banks, such as Chase and BOfA, have much more advanced technologies that they provide to their customers. We live in a world where technology is the first things inspected by its potential consumers. Banking does not fall behind on this. Costumers want to find the easiest way to their banking without even having to come into a branch. While this approach might not be the best way for a bank to succeed, it is something that Valley needs to look into.

VBN should consider looking to update the way their customers do their banking. While they use a very simple online banking system, they should begin to but into practice the new advances that technology has been able to offer. Banks such as Chase make it easy for the customer to make a deposit without even having to leave the comfort of their homes.

The screen above is taken from www.chase.com online banking and mobile banking options. Here the customers have more options as to what they need to do or how they need to do it. Valley needs to work on finding a way to give these same conveniences to their customers so that they don’t lose out on the technology aspect of the market.

Valley National Bank’s focus is to provide their customers with great customer service and products that everyone can afford on any budget. By VNB updating their systems to something that is more competitive to what is being offered now, they can then begin to retain more of their customers and also acquire new ones.

Valley National Bank’s Business Strategy

This section of the Group Six report discusses VNB’s business strategy.  Here we will discuss how Valley uses their MIS to compete with other banks.

Valley National Bank was started over 80 years. The main thing that banks face in today’s age is the rapid change of technology and who can facilitate information for the customers faster. With competitors such as TD, Chase, Wells Fargo, and PNC, VNB faces obstacles that only a boost of technology will help to overcome their barriers.

VNB ANALYSIS

The Bargaining Power of the Customer is not very high for VNB. Since there is nothing being purchased, there is not much room for negotiation.  If there is any bargaining power at all for the customer it would be to negotiate rates for certain products or the amount of money that they can maintain in an account.

Valley faces low threats of substitutions. There are things such as credit unions or saving banks, but over all they settle over the same category, banking. They also do not face bargaining powers of suppliers since they are the ones providing the supplies. The essential things that they use are things that help run the everyday branch such as paper, electricity, and other things.

VNB along with other banks face low threats to new entrants. Opening a bank or beginning a new bank is not something that just any one can one day decide to do. Banks go through rigorous qualifications to be an established bank backed by the Federal Reserve. Extensive auditing and many policies and procedures must be established before a bank can be opened.

Rivalry is something that is faced on a daily basis in the banking industry.  Not only are there big banks that use their names to pull in customers, but there are also small community banks that work hard to outdo what the big banks miss out on. With competitive products that are almost identical from bank to bank, VNB tries to differentiate them from the competition.  VNB offers a $499 refinancing product, which no other bank has been able to match, as their way of setting themselves from the competition. They strive for excellent customer service and offer free services such as free checking accounts, online banking, and free bill payment.

Valley National Bank uses a focus differentiation approach for their competitive strategies. VNB focuses on bringing in their customers using the refinancing program that no other bank can offer them and by providing impeccable customer service. They also use promotional checking accounts that require only a minimum balance of $99 to avoid service fees. Many bigger banks require higher balances to avoid these fees which are a big advantage for Valley.

Valley also offers a program called Perfect Switch. This program helps customers easily transition from one bank to another. Many people might not be satisfied with their current bank but because it takes time to change from bank to bank, they are reluctant to do so. Valley’s Perfect Switch helps to facilitate this for its customers. Things such as direct deposit or any bill that might be automatically withdrawn from your account are transferred from your old bank to your new Valley account. You simply provide the information and let Valley do the rest.

Some business processes that VNB uses to acquire more customers are detailed customer service. When customers come in for refinancing options, VNB employees recommend the potential customer to also open a Free Checking account as to facilitate their payments for their mortgages. Valley makes follow up calls and issues letters of gratitude to their customers for their loyalty and for banking with them.

Valley provides a product and a process implementation information system to provide competitive advantages. The product that they use to get their customers into the bank is the refinancing option of $499. They also use their money bank checking account as a product to get customers to open new accounts by rewarding them. The process implementation comes into play by helping the customer to find anything else they are looking for. They make it harder for the customer to leave the bank by offering and accommodating them to the things that matter most to that customer.

MIS REPORT FOR VALLEY NATIONAL BANK

MANAGEMENT INFORMATION SYSTEMS REPORT FOR VALLEY NATIONAL BANK

Prepared by Group 6

Helen Bautista

Marlee Ojeda

David Falzarano

Federico Marmolejo

September 20, 2011

Prepared for

Professor Thomas Abraham

MGS 3040*01

REPORT

Introduction

The purpose of this report is to review the management information systems used by Valley National Bank. In this report you will find an analysis of Valley, an observation of how their operations work, and how they us collaboration to make their bank most efficient

Company Profile

Valley National Bank was founded in 1927 as Passaic Park Trust Company. In 1976, after the bank had acquired a few other banks, the name Valley National Bank was chosen. Since then Valley has committed its self to expanding to new ventures, dedicating themselves to the highest levels of customer service, and working on their continued growth by acquiring somewhere around 30 small banks. VNB is a holding company with over $14 billion in assets. Its headquarters is in Wayne, New Jersey. VNB currently has approximately 200 branches in 135 communities throughout New Jersey and parts of New York.

Company Analysis

VNB, whose headquarters is in Wayne New Jersey, currently operates around 200 branches throughout New Jersey and parts of New York. They are dedicated to providing the highest levels of customer service to their clients. VNB works with many different areas of technology to get the most out of all of their products and to also be able to offer their clients. In this report we will cover how VNB uses  collaboration to get the most out of all of their offices and how to get the most to their customers.

http://www.valleynationalbank.com/