Made by: )

The Canadian banking industry started in 1817

Foreign banks were allowed to open Canadian subsidiary in 1980 Foreign banks were allowed to establish fullservice branches or lending branches in Canada.

Headquarters Amsterdam

One of the five largest companies in Netherlands

Active in more than 60 countries Among the top 10 global providers of integrated financial services Groups activities included insurance operations, banking and asset management

ING Bank of Canada was started under the trade name ING Direct on April 22nd 1997 A subsidiary of the ING (International Netherlands Group) A savings bank which operated from a branch in Toronto Customers were served 24*7 through a call center and by internet

Telephone the 24 hr call centre and request an application

Fill online application or download application and mail it to ING Enroll in person at one of the ING cafes in Toronto or Vancouver Fill out an application sent through mail as part of the companys direct mail campaign

Continuous increase in clients and limited resources to handle them Same day processing of both new accounts and deposits to existing accounts was becoming increasingly difficult

Excessive overtime cost

Weighted Avg Accounts Time For New CIFing

Weigh
30%
40% 10% 20% 30 % - Single Without CIF - 1.75 person hours per 50 Single w/out CIF 1.75 person hours per 50 40% - Joint without CIF - 2.5 person hours per 50 10%JointSingle with CIF 2.5 person hours hours per 50 - w/out CIF - 1.4 person per 50 20% - Joint With CIF - 1.75 person hours per 50 Single with CIF 1.4person hours per 50 Joint with CIF 1.75 person hours per 50

Operation

Person hours

Weighted Time = 0.3*1.75 + 0.4*2.5 + 0.1*1.4 + 0.2*1.75 = 2.015 person hours per 50 mails

PERSON PER HOUR

Process Old
0.041667 {50 minutes *50 mails) / (1000 Extraction mails* 60 minutes) } 0.3 {6 person hours * 50 mails/ 1000 Sorting Scanning CIF Posting mails} 0.125 (7.5 minutes) 0 0.625 0.3 0.125 2.015 1.25 0.041667

New

New vs Existing Account

Year 1999 2000 2001 2002 New Acct 110000 110000 99000 128700 Existing Acct 110000 220000 330000 429000

Comparison of accounts
100% 90% 80% 70% 60% Existng Acc

50% 40%
30% 20% 10% 0% 1999 2000 2001 2002

New Acc

Year 1999 2000 2001 2002

New Acct Transaction 110000 110000 99000 128700

Existing Acct Transaction 184800 369600 554400 739200

Per Hour for batch Old Accounts of 50 Extraction 0.041667

No. of persons working 1

Maximum possible time taken 0.041667

Sorting
Scanning Posting

0.3
0.125 1.25

3
1 9

0.1
0.125 0.138889

Bottleneck
The process of posting of cheques is taking the maximum time i.e. 0.13889 person-hours for a batch of 50.

So, it becomes the bottleneck for the whole operation. Management could think of the solution both in short term and long term for this process so that time consumed can be made less.

Ques.2 What would be your alternatives and decision criteria, and what action, if any, would you recommend and why?

Software Purchase Price = $1,00,000 Working Days = 250 Overtime Paid in 1999 = $61,000 Overtime Rate = 1.5 * Normal Rate {12Rs} Overtime hours per year = 61000/18 = 3389 man hours Cost to Company for overtime = $15.6 *1.5 = $23.4 per hour Man hours to recover cost = 4273 overtime hours (100000/23.4) As 9 person working at a given time, Days to recover cost = 4273/9 = 475 Days Therefore cost recovered in less than two years

OUTSOURCING

Simultaneous of posting and CIFing

Generating CIF when customer calls

INCREASE STAFF LEVELS

Complex software but handle heavy load easily