RBS BANK

Performance of Information Technology in UK Banks Preferable UK Investment Banks

Table of Contents

Introduction3

An analysis of the investment RBS banking industry4

Deregulation4

Information technology5

Globalization of financial markets6

Size and rapid growth of financial transactions and volumes7

Increased customer sophistication9

Methodology10

Data Analysis10

The role of investment RBS bankers - intermediaries, advisers and counterparties11

The marketing of services to corporate customers: the case of RBS investment banking16

Conclusion29

References31

Appendix35

Performance of Information Technology in UK Banks Preferable UK Investment Banks

Introduction

Investment banking is a key activity in the provision of corporate financial services in all countries which have a developed private sector economy. The principal activities of investment banking are the raising of capital for corporations and the provision of advice on mergers and acquisitions. To raise capital, investment RBS bankers originate, structure and sell corporate securities in order to raise funds for client companies. Additionally, providing advice on initiating and implementing mergers and acquisitions involves investment RBS bankers in identifying suitable partners or target companies for acquisition, valuing the transaction and negotiating appropriate terms.

During the past 20-30 years there has been an ever growing demand for these services and, more recently, major changes have been occurring leading to rapidly increasing competition and over-capacity. This has led to a recognition of the potential contribution of marketing to the industry.

This paper examines the marketing of investment RBS banking services and reviews critically the theoretical frameworks provided by the literature in the marketing of services field. Through this and based on in-depth research interviews with 12 of the largest UK-based investment RBS banks, a discussion of current marketing practices identifies the critical marketing management issues facing the industry. Finally, an attempt is made to suggest an “infant” theory of marketing of investment RBS banking services that can guide the analysis of marketing practice in this industry.

An analysis of the investment RBS banking industry

The financial services industry is undergoing a fundamental change. Intensified competition, severe overcapacity, new customer-focused management structures are some of the symptoms of this change. RBS, for instance, consider that the most important themes for the future of investment banking are: internationalization, industry specialization, high level marketing by chairman and senior directors, quality of service, relationship banking and independence (Financial Times, 1991). Selby (1990) identifies the most critical forces of change, to be deregulation, developments in information technology, globalization of financial markets, the huge size and rapid growth of financial transactions and volumes, and increased customer sophistication.

Deregulation

Within national markets, the rules on how capital is raised and placed with investors are being liberalized, moving closer to the intensively competitive situations which characterize the unregulated Euro-markets. The boundaries between national markets are crumbling as governments relax exchange controls, abolish discriminatory taxes and take a more relaxed view of the entry of foreign banks. Everywhere, the regulatory framework has been left looking outdated and ill-equipped as financial services are driven more by the demands of shareholders and customers, and less by the dictates of public policy. The deregulation of financial markets has proceeded at a quickening but uneven pace across industry and geographic ...