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Industrialisation in savings banks – an empirical analysis using the example of German savings banks

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Kuchelmeister, Patrick (2015) Industrialisation in savings banks – an empirical analysis using the example of German savings banks. DBA thesis, University of Gloucestershire.

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Abstract

This study examines the notion that the term “Industrialisation” within the banking system is not clearly understood, nor its impact on the whole value added chain. The goal is to establish a clear definition of the term “Industrialisation” in an international context and study the manifestation and impact of Industrialisation across the length of the banking value added chain. Four indicators of Industrialisation (standardisation, automation, specialisation, quality management) were identified through a systematic literature review. The work focuses on one of the ‘three pillars’ of the German banking system: the East German Savings Banks Group. The research uses a homogenous multi method approach utilizing statistical financial information, existing documentary evidence and questionnaires. The data (quantitative and qualitative) was derived from files held by the national association on the 48 savings banks, and from 36 quantitative questionnaires returned by respondent banks. The 36 complete data sets were systematically combined using a comprehensive regression approach. The data was used to test three over-arching hypotheses, each relating to connections between the (generally understood) four stages of the value-added chain, activities related to each stage and indicators of banking success. The research clearly identified that: 1) Industrialisation dominates the savings banks value added chain. 2) Industrialisation augments financial outcomes and ‘perceived success’ in product development, marketing, settlement and transactions. 3) Outsourcing functions are negatively correlated to banking success in these value added stages. 4) Success in risk management was shown to be contingent on settlement and transactions, but no other activities. Automated services, such as self-service terminals and internet banking, are successful in the areas of settlements, transactions, marketing and customer relations. Increasing automation and standardisation can increase the perceived and quantitative measured success within the value added chain. Conclusions & Implications: The developed model extends knowledge in the area of banking and Industrialisation, showing increasing interaction between stages along the value-added chain. The closer the stages, the stronger the effects. The model provides a guide for managerial attention in adding value through Industrialisation techniques in the industry. The management implications of the study are that the savings banks should focus on their core competencies in providing a holistic in-house service in routine transactions, as well as supporting exceptional financing and investment tasks for their clients. To enhance the efficiency of Industrialisation across the value added chain, savings banks should find standards and routines contributing to Industrialisation success in risk management, and seek to comprehensively link the function of risk management to the value added chain stages.

Item Type:

Thesis (DBA)

Thesis Advisors:

Thesis Advisor	Email	URL
Koch, Ulrich	ukoch@glos.ac.uk	UNSPECIFIED
Davies, Barry	bdavies@glos.ac.uk	https://www.glos.ac.uk/staff/profile/barry-davies/
Trezise, Edward	etrezise@glos.ac.uk	UNSPECIFIED