The case of Lloyds TSB Bank: Greater access and availability

Over 18 per cent of the UK population are connected to the Internet. In addition, e-commerce is expected to rise to $47bn in the UK alone by 2002. It is, therefore, imperative that Lloyds TSB allocate resources and get a share of the action.

Today, an automated website is accessible 24 hours a day, seven days a week, without the need for human operators to keep it functioning. Not only does this clearly offer increased convenience to the growing number of people with Internet access, it also represents significant cost savings for a bank. The cost of maintaining manned premises in prime high street locations, 24 hours a day, seven days a week would be prohibitive. Much of this cost would be ongoing revenue expense, whereas the greatest cost in setting up a fully integrated website network is the capital cost.

Greater consumer involvement in the service ‘factory’

The re-engineered process illustrates a fundamental aspect of the servuction model demonstrating that consumers are an integral part of the service process.

A fundamental difference in the re- engineered process illustrated in Figure 4 shows a greater active participation by the consumer. For example, there is no need for contact personnel (eg a bank clerk) to duplicate the entering of information into the bank’s database. This task is actually co-produced by the consumers themselves, directly on the bank’s website.

Thus, changes made in the ‘factory’, have necessitated changes in consumer behaviour, first to reflect a shift towards ‘self-service’ and secondly, so that consumers do not need physically to go to a bank to experience the service.

Limitations and constraints of the re- engineered process

The main difficulties with the re- engineered model are those centred on the customer’s perception of the service and their skill in operating the graphical user interface (GUI) of the website. If the customer perceives interpersonal contact as being an important element in the service then full automation is inappropriate. Customer skill is related to customer selection and also to the flexibility of the service offered. It is, therefore, necessary for the service designer to know and understand the customer, and to design a GUI which the customer will find easy to use. The presentation of too many options frequently causes confusion, and automated service GUIs are most effective when only a few facilities are offered.

 

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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