Bank Inquiry Focuses On Banned Financial Essay: Westpac Banking Corp.

Discuss about the Bank Inquiry Focuses On Banned Financial.

Strategic management involves setting objectives, analyzing the internal organization and competitive environment within an organization. The organization that has been selected for the strategic management is Westpac Banking Corporation. The company is commonly known as Westpac in Australia as the corporation who works as Australian bank and financial services provider and company is having the headquarters in Westpac Place, Sydney (Westpac Banking Corporation, 2018).

The report reflects the strategies that help the company in achieving the growth and development. Moreover, it includes the criticisms of the business practices that are pursued by the company over the years. The environmental analysis of the organization is discussed in a report as the external factors might create the impact on the decision related to the strategies.

Westpac is Australia’s first and oldest bank that came into existence in the year 1817 as the bank of New South Wales under a charter of incorporation provided by Governor Lachlan Macquarie. In the year 1982, the name of the bank changed to the Westpac banking corporation. The company has 5 customer facing divisions that are serving around 13 million customers. The operating strategy aligns the business with the customer segments. The company retains a unique portfolio of brands which include Westpac, St. George, Bank of Melbourne, BankSA and RAMS (Westpac Banking Corporation, 2018). 

Mission- The mission of the company is to meet the customer needs and leads to the customer satisfaction which helps in achieving the vision of company (Westpac Banking Corporation, 2018).

Vision- Westpac vision is to be one of the world’s great service companies that provide the help to the communities, customers and the people to grow and prosper (Westpac Banking Corporation, 2018). 

The strategy of the company was to provide superior returns to shareholders, to form enduring and strong relationship with the customers, to be a leader in the community and to make a place where the best people like to work. The company strategy helped the company in achieving the vision of the company.

The company is focused on core markets of the Australia and New Zealand where the company provides a comprehensive range of financial products and services that help the company in fulfilling the needs of the customers. The implementation of strategy seeks to grow a number of customers in the selected segments. The company is trying to maintain the flexibility in their strategies to meet the expectations of the customers (Westpac Banking Corporation, 2018).

To meet the challenges in the present market the company brings the changes in the strategies. Westpac believes in keeping the strategy on the priority and according to the current market the company refresh and review the strategies each and every year. The company tries to manage these strategies in a balanced way with an appropriate mix of return, growth, productivity, and risk. Currently, the company is focusing on improving the financial position that creating an impact on the company. The better financial position will help the company in achieving the growth and development (Westpac Banking Corporation, 2018).

Strategy and vision

The business practice of Westpac banking corporation is to provide the financial services brands and businesses to the customers and the communities so that they will be able to grow and prosper. Different people in the country are having different needs and this is the reason due to which the company is serving the 5 divisions to its customers.

The range of stakeholders is important for the company as this is the only way left with the company that helps the company in understanding the current issues along with the emerging trends (Carriline, 2008). Westpac is having the range of channels and mechanisms that help the company in collecting and monitoring this feedback across our business. There are some of the stakeholders who contribute to the development of the policy by sharing their feedbacks and issues. The criticism is reflected in the negative feedback of the shareholders towards the business practice.

Customers- Westpac track and analysis the feedback shared by the customers through calls, online surveys, and e-mails. The feedback of this shareholder is every important for Westpac as the company is working for the benefit of their customers. Customers shared the issues faced by them in the year 2012 related to the business practice of the company. The customers found the faults in the security and the reliability of the service due to lack of the technology advancement. Westpac practice is not able to fulfill the expectations of some customers in the context of the customer service (Westpac Group, 2012).

Employees- The employees of the company shared their feedbacks through suggestion boxes, staff perspectives survey, meetings and campaigns. Employees found downfall in the business practice due to the lack of the leadership practice which leads retention of the employees. To make the business practice successful the managers or leaders of the company have to take correct steps keeping the employees together.

Investment community- Westpac take the feedback from the investment community through a formal survey, questions, briefings, or can take the feedback at the time of the Annual General Meetings. In the year 2012, investors found the faults in the management of the impact of the financial crisis. Lack of management of financial crises creates an impact on the amount invested by the investors. Investors expect good returns which are not possible to get if there is lack of management (Westpac Group, 2012).

Industry expert- Westpac Company found the criticism from their stakeholders and industry experts. As per the news article was written by a political reporter, ASIC (Australian Securities and Investments Commission) banned an employee of Westpac from offering the financial services for 4 years because he entered false data or information related to the client’s health in Westpac life insurance applications. National Australian bank (NBA) has banned employee for giving any expert advice in the industry. The company faced the critics from ASIC and NBA who are known as the industry experts of financial and investment management (Patel, 2016). 

PESTLE analysis is the strategic tool that helps the Westpac Company in analyzing the factors that can influence the decisions of the company.

Past strategy

The political factors can impact the Westpac profitability in the certain market or country. The company is operating and expanding the business in many countries. Westpac needs to perform the analysis to achieve the success in the countries having a diversified political environment.

• Westpac needs to analysis the trade regulations and tariffs that are associated with banks globally.
• Pricing regulations might affect the revenue or profitability of Westpac. Hence, the company needs to analyze the pricing regulatory mechanism for banks in the country where the company is looking to expand the business.
• There is variation in the legislation such as taxation, wage legislation, work week regulations, employee’s benefits regulations and many others from country to country (Fern Fort University, 2017).

Improved business activities can affect the decisions of the bank. The rise in the business activity leads to the non-mining business environment. This results in increased demand for housing loans and new investment in-dwelling. Westpac can find the growth or hike in the investment and deposits by the people. The controlled inflation rate, lowered GDP, and moderate employment growth might force the central bank of Australia to maintain the cash rate at 2.5%. This leads to changes in the decision related to the strategy of banks (Mba Skool.com, 2017).

The social factors include the preference and demand of the customers for the money might vary considering the situation of the country. The increase in the employment-population creates the impact on the customer’s deposit. In Australia, the labor market is soft and in 2015 at the starting, there was a decline in employed population then the people made use of savings for survival which reduced the profitability of Westpac. The rise in the employee's population increased the number of customer saving accounts and amount in their accounts which results in the increase in the revenue of Westpac (Fern Fort University, 2017).

To maintain the confidentiality of customer’s data is important for banks. Westpac acquires around 11% in Quintessence Labs which is an expert in technology security. The use of technology is increasing in banks and with the use of technology, the Westpac is able to provide the digitalized services to their customers. This strategy helps the bank in winning the trust of customers and result in high revenue (Mba Skool.com, 2017).

Westpac has adopted an inclusive approach where the company engages with all the stakeholders include customers, employees and other groups to create a sustainable economy. The bank launched the green bond after partnering with World Bank to safeguard the environment. It borrowed $8 billion for the environmental service sectors for cleanness. The aim of the bank is to maintain the carbon neutrality, recycling and reducing power and paper usage.

Westpac is dealing with the class action suit for charging high penalties to the household customers for the late credit card payments, increasing credit card limits and making a business deal with inadequate funds in the account. These activities affect the goodwill of the company not only in the home country but also in international countries where the company is operating its business. This results in the decrease in customer trust and revenue (Fern Fort University, 2017).

• One of the leading companies in terms of a number of branches and ATMs in Australia.
• The bank is second largest lending banking in Australia.
• Westpac has been defined as world’s most socially responsible banks (Westpac Banking Corporation, 2018).

• The strategies of the company are not strong to face the high competition in retail banking from other top ranks banks.

• The company is having the license to open its operations in new markets globally.
• The company is having an opportunity to develop new banking products with the help of high technology and innovation (SWOT & PESTLE.com, 2017).

• Regulatory and credit limit changes are one of leading threats for Westpac.
• Worsening economy of New Zealand and Australia is a threat to the company as it will affect the bank.

Supporting our customer-focused strategy is a tough set of company-wide values which are well surrounded by Westpac culture. The core values of the company include:

• Delighting customers- By deeply understanding customer’s needs and expectations.
• One team- Valuing each other and working together to provide best possible outcomes to customers and organizations (Westpac Banking Corporation, 2018).
• Integrity- Each and every employee in the organization is accountable for their actions, work, honesty and doing the right thing.
• Courage- Company is having the courage to deal with change because the company think boldly and finding innovative methods of performing work.
• Achievement- Pursuing team, personal and business excellence. 

The leadership shadow model was created by CEW in association with the Male Champions of Change group. Westpac Leadership shows the action taken by the CEO of the company to drive the gender equity across the organization which reflects the culture of the company. 

The image shows the leadership shadow of the Westpac Banking Corporation. The CEO of the company believes wants to focus on inclusive leadership development. The company knows the role of investing in management capabilities to support diversity and has identified that there is need of better leadership skills to support and maintain to sustain improved gender diversity. A variety of programs strengthens the link between leadership skills (Smith-Gander, 2017). According to the CEW member, “Gender inclusive leaders are generally just the best leader’s full stop. None of those great leaders say ‘I’ am going to lose as a result of this desire to increase the numbers of senior women leaders.”

Conclusion

The report shows the strategic management of the Westpac Banking Corporation. It can be concluded from the report that the strategies formed by the company are for the betterment of the customers and the community. The strategy also helps the company in achieving the vision and mission of the company. Moreover, stakeholders and other people show the criticism of the business practice of the company. The environmental analysis is discussed that can create an impact on the working of the company. The company should try to work on the strategies related to the retail market as it is a weakness of the company. Westpac organization leadership shadow that reflects the organization culture is discussed.

References

Carriline, A. 2008. Strategy and Performance Management. [Online]  Available at https://info.westpac.com.au/annualreport2008/default.aspx?PID=273 [Accessed 11^th January 2018].

Fern Fort University, 2017. Westpac Banking Corporation PESTEL & Environment Analysis. [Online]. Available at https://fernfortuniversity.com/term-papers/pestel/nyse4/4215-westpac-banking-corporation.php [Accessed 11^th January 2018].

Mba Skool.com, 2017. Westpac Banking Group SWOT Analysis, USP & Competitors. [Online]. Available at https://www.mbaskool.com/brandguide/banking-and-financial-services/1985-westpac-banking-group.html [Accessed 11^th January 2018].

Patel, U., 2016. Westpac, NAB to face grilling as bank inquiry focuses on banned financial advisers. ABC News, 5^th October. [News] Available at https://www.abc.net.au/news/2016-10-06/banking-hearing-to-focus-on-banned-financial-advisers/7906908 [Accessed 11^th January 2018].

Smith-Gander, D., 2017. Westpac. [pdf] Available at https://cew.org.au/wp-content/uploads/2016/07/CEW_CaseStudy_Westpac_WebFinal.pdf [Accessed 11^th January 2018].

SWOT & PESTLE.com, 2017. Westpac SWOT & PESTLE. [Online]. Available at https://www.swotandpestle.com/westpac/ [Accessed 11^th January 2018].

Westpac Banking Corporation, 2018. About us. [website]. Available at https://www.westpac.com.au/about-westpac/westpac-group/company-overview/about-us/ [Accessed 11^th January 2018].

Westpac Banking Corporation, 2018. Our businesses. [website]. Available at https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-businesses/ [Accessed 11^th January 2018].

Westpac Banking Corporation, 2018. Our history. [website]. Available at https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-history/ [Accessed 11^th January 2018].

Westpac Banking Corporation, 2018. Our strategic priorities. [website]. Available at https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-strategic-priorities/ [Accessed 11^th January 2018].

Westpac Banking Corporation, 2018. Our strategy and vision. [website]. Available at https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-strategy-vision [Accessed 11^th January 2018].

Westpac Group, 2012. Westpac Group Annual Review And Sustainability Report 2012. [pdf] Available at https://www.westpac.com.au/docs/pdf/aw/ic/2012_Annual_Review_and_Sustainability_Report.pdf [Accessed 11^th January 2018].