Table of Contents

Acknowledgement...........................................................................................................................2

Introduction to Professional Services..............................................................................................3

What is Service?..........................................................................................................................3

Banking Industry as a Service Industry...........................................................................................3

Introduction..................................................................................................................................3

Factors of E-Services Add Value to the Customers........................................................................3

Importance of Service Process.....................................................................................................4

Service Quality............................................................................................................................4

Service Delivery System..............................................................................................................4

E-Services that are used of service delivery............................................................................5

Service Encounter........................................................................................................................5

Managing Service Encounters.................................................................................................5

High Contact Service...............................................................................................................6

Medium Contact Service.........................................................................................................6

Low Contact Service................................................................................................................6

Service Recovery.........................................................................................................................6

Banking Industry Adding Value for their Customers......................................................................7

Weaknesses of E-Services...............................................................................................................8

References......................................................................................................................................10

Acknowledgement

I am very pleased to say that I learned a lot in my Professional Services Management class.

Before this I had no idea about this subject. After the lesson I am able to cop up with the basic

and up to certain intermediate knowledge of Professional Services Management. I got familiar

with lots of new theories and information which are quite new to my knowledge.

For this I would like to thank to my Professional Services Management lecturer and supervisor

Mr. John Choong for his continued help and supervision during my assignment. He always gives

useful information in order to help me complete this assignment. Without the lecturer guidance I

would not be able to accomplish my task.

I am also very thankful to my friends who help and assist me in class and lab sessions. I am very

thankful to them, their helpfulness is always appreciated.

Syed Maaz Ahmed

Introduction to Professional Services

What is Service?

According to Lovelock, 2002

“Services are economic activities that create value and provide benefits for customers at specific

time and places as a result of bringing about a desired change in or on behalf of the recipient of

the service”

There are so many service organizations which are providing professional services like airlines,

insurance companies, banking and financial sectors, education, news, entertainment, hotels and

freight transportation. There are government and nonprofit organizations also which are

providing services (lovelock, 2002).

Banking Industry as a Service Industry

Introduction

Banking industry is a professional service industry. Nowadays bank provides electronic services

to their customers. Banking Industries are providing long list of e-services including traditional

financial services and shopping (Brian Nixon, 2000).

Banks offers lots of online services like online bill payments, funds transfers, checking balance,

charge phone cards. Nowadays banks are very popular because they provide lots of e-services

which attract the consumers to avail these services.

Factors of E-Services Add Value to the Customers

E-service helps banking industry creates value for their customers because in back days there

were no ATM Machines, people don’t do internet transactions because of lack of technological

advancements, they go pay their bills in banks, every time they have to leave their home because

they want to go to the bank. But now, this is an era of technology and all the information is one

click away from you. ATM machines brought us this 24 hours concept, but with internet banking

you don’t have to leave your home you can make transactions online, no need to go to banks to

pay your bills you can pay your bills online. For Example;

If you have children away at college you can better manage their college accounts and spending.

With e-banking you can bank anywhere in the world as long as you have access to computer and

internet. If you are a traveler, this comes in handy when you are away from home and need to

pay bill simply go to a banks site and the bank will either electronically pay the bill or cut a

check (Brian Nixon, 2000).

Internet Banking has intensified the competition between banks because now geographically

barriers have disappeared. Nowadays banks are offering higher interest rates on certificates of

deposits and they don’t charge ATM transaction fees also (Brian Nixon, 2000).

Importance of Service Process

Service satisfaction can be affected by many things. The total of the service process from the

activities undertaken by suppliers or back office staff through the handling of the customers

interface must be the most important factor in the customer’s assessment of quality (Robert

Johnston, 2001).

Service Quality

Service quality is the extent to which a service meets or exceeds customer expectations. If the

customers identify the actual delivery is better than he expected then he will be happy it means

customer satisfaction is the quality but if the actual delivery is below then he expected it means

service quality is not good because customer is not satisfied.

Before purchasing a service customers have an expectation about service quality that is based on

individual needs, past experiences, word of mouth recommendations and a service providers

advertising and after buying the service customers compared the service quality with his or her

expectation with what they actually received (lovelock, 1999).

Service Delivery System

“It is the part of the total service system where final assemble of the elements takes place and the

product is delivered to the customers, it includes the visible elements of the service operation”

(lovelock, 2002).

Service delivery is concerned with how to deliver the service product it is also concerned with

when and where to deliver the service product (lovelock, 2002).

E-Services that are used of service delivery

Because of e-services customers and consumers of banking industry are facing great convenience

then face to face contacts. Banks provides many e-services nowadays they deliver their services

using ATM machines, they provides debit and credit cards, websites, online banking and also

cash deposit machines.

Traditionally service providers had direct contact with their customers but they want to reduce

their cost and want to increase their productivity for customer convenience and many services

don’t want their customers to be physically present in their service factory that’s why service

operation is shrinking in many industries as electronic technology flows are used to drive service

delivery from higher to lower level of contact (lovelock, 2002). See Appendix 1

The use of technology in the delivery of banking services is becoming more and more prevailing

as it is being working to reduce costs and get rid of uncertainties. Banks provides e-services such

as account viewing, transferring funds, paying bills, personalization or customization, market

places, interest paying and checking accounts, mortgage applications, credit card applications,

brokerage service and many more.

Service Encounter

It is a period of time in which customer interact directly with service and in the sometimes the

entire service experience can be reduced to a single encounter many people enjoy visiting the

bank branch if they don’t trust machines or if they know any of the bank staff members who

provide them services (lovelock, 2002).

High level of encounters between customers and the service organizations can be very opposite

from lower level. Many service problems revolve around disappointing incidents between

customers and service personals that’s why service industries are simplifying their service

delivery and improving their productivity (lovelock, 2002).

Managing Service Encounters

Services involve in various encounters between the customers and service employee it can be in

person, online, by phone or in service factory. It may also take place in physical facilities or

equipment (lovelock, 1999).

Service encounter is viewed as a harmony with the customer and the service personnel both

exercising manage over the service process in an environment defined by the service

organization. The importance of flexibility in meeting customer needs has resulted in many

service organizations empowering their contact personnel to exercise more independence

(Fitzsimmons, 1999).

High Contact Service

In which customer face the service facility in person and involve with the service organization

personal directly throughout the service delivery for example; Restaurants or hair dressing

(lovelock, 2002).

Medium Contact Service

Customers visit the service factory and involve in situations but do not remain throughout service

delivery or have only reserve contact with the service personal for example management

consulting or insurance (lovelock, 2002).

Low Contact Service

Very little involvement of the physical contact between customer and service provider and the

service delivery medium can be electronically or physical distribution channels for example

ATM machines (lovelock, 2002).

Service Recovery

Service recovery made when there is a failure or when there is a customer complain. The

purpose of service recovery is not to satisfy the customer but to use the information from the

failure and its consequences to continuously drive improvements through an organization by

focusing managerial attention on specific problem areas (Robert Johnston, 2001).

Banking Industry Adding Value for their Customers

In operations banks must be careful where value is added and sometimes this may be different to

what organization does or appear to do. For example, we as customers and even the banks staff

and management may say that personnel interaction between customers and banks staff is very

important, but form an operations perspective the bank is a big factory which process millions of

transactions every day. The main value is in provides is in handling accounts and in managing

financial movements. It is the mistake to ignore the back office activities, which may provide the

majority of the added value for the customers (Robert Johnston, 2001).

Weaknesses of E-Services

Many people are big fan of online banking but there are few drawbacks of using e-services.

Banks are taking steps every day to secure their websites from hackers and e-thieves that are

work also, that’s why there are risks to bank online (Brian Nixon, 2000).

Electronic mail containing confidential information could be sent in error to the wrong

person

Some banks have their systems connected to other businesses a setup that can offer an

opportunity to thieves who want to access sensitive information

Illegal access to customer files by dishonest employees (Brian Nixon, 2000).

In e- services theft of credit card and personal information is often all somebody needs to be able

to spend all your money on the internet. Being able to purchase and buy items with very little

proof of your identity is another big downside to e-service. Using a credit card in an online

transaction all you need is what is already printed on the card, and the offender can cover their

tracks a lot easier, no one will have to see them to make the transaction (Valentine 2003).

It is not only the consumer that is at risk on the internet, extortion is a major problem for

company's using online transactions from customers (Gow, 2005)

Consumers are hesitant to buy some products online. Online furniture businesses, for example,

have failed for the most part because customers want to test the comfort of an expensive item

such as a sofa before they purchase it. Many people also consider shopping a social experience.

For instance, they may enjoy going to a store or a shopping mall with friends or family, an

experience that they cannot duplicate online. Consumers also need to be free from worry that

credit card transactions are secure and that their privacy is respected (Online business money

maker, July 2008)

We can say that the information is overloaded. We can also talk about the flexibility of the e-

service with the promotion companies on the internet that can easily change and get the right

direction as soon as the company starts working. If you wanted to get information any other way

from these countries you may end up having to go there. They want more safety in their

purchases. In effect all the olds computers who doesn’t have internet are cut of this market and if

they want to get into this market and they have to invest in computers and it cost a lot of money

at the company. With all these new systems of security, it is more and more difficult to find

qualified consultants who ensures the maintenance

Appendix

1. Many Types of e-services provided Maybank.

2. Service Failure, Need Recovery

References

Christopher Lovelock and Lauren Wright, 2002, Principles of Service Marketing and

Management, 2nd edition. New Jersey, Pearson Education.

James A. Fitzsimmons and Mona J. Fitzsimmons, 1999, Service Management. 2nd

Edition. United States. MacGraw-Hill

Brian Nixon and Mary Dixon, 2002. Teach Your Self Today, E-Banking. Indiana, Sams

Publishing.

Robert Johnston and Graham Clark, 2001. Service Operations Management. England.

Prentice Hall.

Gow Brad, 2005. The growing threat of cyber-extortion, Risk Management, New York,

United States of America, Retrieved on 30th July, 2008. From

http://athene.riv.csu.edu.au/~rdunn12/itc125/assignment2/essaypage.html

Valentine, Lisa, 2003. The 'fraudsters' playground, American Bankers Association,

United States of America, Retrieved on 30th July, 2008. From:

http://athene.riv.csu.edu.au/~rdunn12/itc125/assignment2/essaypage.html

Online business money maker, 2008. Retrieved on 30th July, 2008. From:

http://www.orble.com/introduction-electronic-commerce-advantages-and-disadvantages/

Advantages and disadvantaged of internet marketing. Retrieved on 31th July, 2008. From:

http://www.megaessays.com/viewpaper/5433.html.

Appendix Pictures from: www.maybank.com.my Retrieved on 31st July, 2008.