The Internet Banking Project in Industrial and Commercial Bank of China (Shanghai)

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This paper studies endogenous diffusion and impact of a cost-saving technological innovation -- Internet Banking. The bank understudy i.e. ICBC has efficiently embarked on its internet based private banking service. The vice director of e-banking felt that the entire project was an accomplishment in terms of its schema and satisfactory quality. Here is this case he needs to expound the understandings and the lessons internalized along the entire course of the project. Moreover, there were various issues which were raised during this intellectual itinerary, which included the challenges regarding computer system implementation, Information system design and most importantly the feasibility analysis. This case deals with the fact that how he confronted the challenges and developed a plan which immensely benefited bank.

There are various issues discussed in the case. These issues will be highlighted below:

-The foremost challenge was the seamless promotion of the existing banking system and channels for the installation of new state-of-art IT infrastructure. In this regard, the changes made to the structure and functioning of the financial institution challenged the regulatory structure of the bank. -Furthermore, the subsequent development of innovative banking products on the skeletal framework of information technology. -Another tactical goal on the banks strategic map was to fortify associations and interactions with private customers by offering better product delivery and in doing so harvesting the use of internet as a medium. -Initially the bank’s core banking system was product oriented, but the need of the hour was to develop a customer oriented system, because the challenge is to build customer loyalty, cross sell, and enhance repeat business.

-The industry is composed by a continuum of banks which produce a homogenous product — banking service. Domestic as well as foreign competition is violent. Not to forget the fact that ICBC has...
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