Esa Viitamo (2012) PhD analysis and case study of the Finnish banking industry

The text I’m reading for this assignment is the PhD thesis for Esa Viitamo’s (2012) analysis and case study of the Finnish banking industry. The specific contribution of the thesis is called the value creation approach (VCA) and it examines the relation between technology and productivity in a market-based interaction by a service firm and its clients. The thesis tangents the service design from a strategic management and organizational design point of view.

                      The thesis highlights the inter-linkages between technology, resources and strategy that determine the productivity of an organization. The case study consists of data of the Finnish universal banking industry accompanied with former industry studies, interviews with Nordea and Svenska Handelsbanken, reviews and statistics which are used in analyzing the corporate goals in the industry. My report will mainly consist of the Universal Banking Industry case study and more specifically on the technological and customer aspects since they interest me the most.

                      The case study is based as earlier mentioned on the VCA and how the value creation framework can be applied within the universal banking industry. The case study involves various aspects of banking technology and the standards in assessing competitiveness and the productive performance within the banking industry. Since the global financial crisis that started in 2008 deep academic researches on finance and on the negligence of the economic fundaments of competitiveness and productivity have been made. In response to the pro-competitive policies within the EU, the European commercial banks have adopted strategies aimed at improving efficiency, expand output and increase the range of services offered (cf. Goddard et al., 2001; Barras, 1990). In general, the characteristics of the service technology and the measurement of the productive performance in the banking business highlight the diversity of the financial and operative goals of a banking firm.

                      Our studies for Aktia bank involve research on customer satisfaction. The case study provides measurments of customer’s productivity and satisfaction. Arguments are given on how the revenue-cost ratio should be measured in connection with the price of the service quality and value. A purchased service may be substantially higher or lower than the actual price paid for the service(cf. Hoopes et al., 2003), income-cost ratio and perceived quality are interrelated. An ideal framework for the analysis of customer’s productivity in the universal banking industry is the customer satisfaction survey conducted by EPSI (Extended Performance Satisfaction Index) Research Services (EPSI Rating, 2008).
                     

                  This figure summarizes quite well the customer satisfaction part of the thesis. The figure is in my opinion pretty self-explanatory. It all starts with image and customer expectations combined with perceived product quality and perceived service quality. This creates the perceived value for the provided service. This contributes to the customer satisfaction. Loyalty and trust can be catered for in numerous ways, e.g. with customer relations management (CRM) or B2B key account management (KAM) etc. Loyalty can be created by making sure that the customer feels like he or she has been observed on a personal level by the company or in this case the bank. This all contributes to the financial performance of the bank. 

The thesis was very heavy to read and the speculations and arguments were so protracted and thoroughly elaborated that the orientation through the context was pretty hard to comprehend.  All in all the thesis was partly interesting but 350 pages of banking industry analysis didn't turn out to be a reading pleasure that i had expected. 

References:
Viitamo, Esa (2012) Productivity as a Competitive Edge of a Service Firm – Theoretical Analysis

and a Case Study of the Finnish Banking Industry, URL: https://aaltodoc.aalto.fi/bitstream/handle/123456789/3801/isbn9789526046396.pdf?sequence=1 (read 27.3.2013)

//Rasmus