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Made by:

)

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The Canadian banking industry started in 1817

Foreign banks were allowed to open Canadiansubsidiary in 1980

Foreign banks were allowed to establish full-service branches or lending branches in Canada.

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HeadquartersAmsterdam

One of the five largest companies in Netherlands

Active in more than 60 countries

Among the top 10 global providers of integrated financialservices

Groups activities included insurance operations, bankingand asset management

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ING Bank of Canada was started under the tradename ING Direct on April 22nd 1997

A subsidiary of the ING (International NetherlandsGroup)

A savings bank which operated from a branch inToronto

Customers were served 24*7 through a call center

and by internet

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Telephone the 24 hr call centre and request anapplication

Fill online application or download application andmail it to ING

Enroll in person at one of the ING cafes in Torontoor Vancouver

Fill out an application sent through mail as part of

the companys direct mail campaign

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Continuous increase in clients and limited resourcesto handle them

Same day processing of both new accounts anddeposits to existing accounts was becomingincreasingly difficult

Excessive overtime cost

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Weighted Avg Accounts Time For

NewCIFing

30 % - Single Without CIF - 1.75 person hours per 50

40% - Joint without CIF - 2.5 person hours per 50

10% - Single with CIF - 1.4 person hours per 50

20% - Joint With CIF - 1.75 person hours per 50

Weigh Operation Person hours30% Single w/out CIF 1.75 person hours per 50

40% Joint w/out CIF 2.5 person hours per 50

10% Single with CIF 1.4person hours per 50

20% Joint with CIF 1.75 person hours per 50

Weighted Time = 0.3*1.75 + 0.4*2.5 + 0.1*1.4 + 0.2*1.75

= 2.015 person hours per 50 mails

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Process Old New

Extraction

0.041667 {50 minutes *50 mails) / (1000

mails* 60 minutes) } 0.041667

Sorting

0.3 {6 person hours * 50 mails/ 1000

mails} 0.3

Scanning 0.125 (7.5 minutes) 0.125

CIF 0 2.015

Posting 0.625 1.25

PERSON PER HOUR

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New vs Existing Account

Year New Acct Existing Acct

1999 110000 110000

2000 110000 220000

2001 99000 330000

2002 128700 429000

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Comparison of accounts

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2000 2001 2002

Existng Acc

New Acc

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Year

New Acct

Transaction

Existing Acct

Transaction

1999 110000 184800

2000 110000 369600

2001 99000 554400

2002 128700 739200

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Old Accounts

Per Hour

for batch

of 50

No. of

persons

working

Maximum

possible time

taken

Extraction 0.041667 1 0.041667

Sorting 0.3 3 0.1

Scanning 0.125 1 0.125

Posting 1.25 9 0.138889

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Bottleneck

The process of postingof cheques is takingthe maximum time i.e.

0.13889 person-hoursfor a batch of 50.

So, it becomes the bottleneck for the wholeoperation. Management could think of thesolution both in short term and long term for this

process so that time consumed can be made less.

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Ques.2 Whatwould be youralternatives anddecision criteria,

and what action,if any, wouldyou recommendand why?

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Software Purchase

Price = $1,00,000

Working Days = 250 Overtime Paid in 1999 = $61,000

Overtime Rate = 1.5 * Normal Rate {12Rs}

Overtime hours per year = 61000/18 = 3389 man hours

Cost to Company for overtime = $15.6 *1.5 = $23.4

per hour

Man hours to recover cost = 4273 overtime hours

(100000/23.4)

As 9 person working at a given time,

Days to recover cost = 4273/9 = 475 Days

Therefore cost recovered in less than two years

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Simultaneousof postingand CIFing

INCREASESTAFFLEVELS

OUTSOURCING

Complex

software buthandleheavy loadeasily

Generating

CIF whencustomercalls