Q1. Please explain how Bankinter classifies its customers, and explain whether or not you believe this is an appropriate approach for them to take (providing clear justification)
There are five internal divisions in Bankinter and each of them has its own customer based, i.e.:
- individuals,
- corporations,
- small-medium enterprises,
- personal banking, and
- private banking.
Basically, the customer classification above is appropriate because the divisions cover all sort of market starting from personal, family unit, business units, and they also provide private banking which dedicated exclusively for individual that has sizeable asset (usually they need certain privileges that normal division could not offer. However, Bankinter need to consider having additional division for its internet users, both to maintain the existing and gaining new customers because based on exhibit 5 and 6, the internet transaction has grown from 10% to become 37% and there are many potential customers since the market penetration for Spain is considered low (24%).
However inside those divisions, Bankinter also allocate each of its customer into a network based on the customer’s first contact with the bank, i.e.
- brick and mortar branch,
- virtual banking,
- agents,
- internet (8700), and
- telephone
This approach is not an appropriate approach for Bankinter to classify its customers since it would end up in misleading information and data. For example, someone who opens an account in brick and mortar branch will be always regarded as brick and mortar customer although he would conduct most of his transaction via internet. It would result in higher transaction traffic in brick and mortar in which the reality is different. It would be better if Bankinter divide the transaction (not customers) by those networks. Hence the classification data would reflect the real transactions.
Q2. Please calculate the effectiveness of each of Bankinter’s previous...