B.A.Sc. Thesis Abstracts - Year 2004

Keywords are searchable by using your browser's Find function, usually by pressing Ctrl + F.

The Development of a Technology Evolution Road Map

Timothy Huang (Eng. Sci.)

The People's Bank Wealth Management Division is one of the leaders in the Financial Services Industry in Canada. In order maintain this excellent standing and remain competitive, the Bank recognized the need to adopt new technologies as they are developed. It was evident to them that the application systems' architecture supporting the Wealth Management Division (WMD) could benefit from a well planned restructuring. Hence, a team of IBM consultants was asked to assess the Bank's systems architecture and provide recommendations on what steps to take to move it towards a more robust, reliable and efficient applications system.

To carry out this task, the IBM team gathered information about the Bank's Wealth Management Division so that there was a clear understanding of the present state of the application systems' architecture that they would be dealing with. After gathering this information, the IBM team realized that there was inadequate cohesion between the applications within the divisions of the WMD. A solution recommended by IBM was for the Bank to adopt a component-based system. This type of system would provide the consistency that the current divisions were lacking. In addition, projects were suggested within each division that would put the Wealth Management Division on the right path to achieving this component-based system.

A component-based architecture is more robust, and better equipped to adapt to change. As new applications and technologies are created that are more effective and efficient, the old applications that reside in one of the components can easily be updated without disturbing the rest of the system.

With the mentality of always striving to improve, the Bank will remain a successful company for many years to come.

Analysis of a Bank Branch Scheduling Program for Case - Specific Applications

Adrienne Bitner, (CHE)

The objective of this document is to make recommendations for improvements in an automated staff scheduling program and its implementation at one of Canada's six major banks. Trends by region, demographic, and level of business were found in hundreds of branches across the country so that these recommendations could be made specific to branches in different categories. The data used for the analysis consisted of detailed information on several measures of staff usage, as well as customer and employee feedback surveys. In addition to analysis of data provided by the bank, a review of current work in both the automated scheduling discipline and the banking industry is included in this paper.

Debit Transaction Market Examination

Selene Ing and Nickolas Lim

In Canada, the Internet is quickly becoming a competitive medium for consumers to make purchases, and there is a compelling case for offering debit card payments for online purchases. As a result of the serious threat that third-party providers of this service pose to both the Bank's customer base, and to the Bank itself, a consortium of banks has joined together with the Interac Association to propose a new online payment system, classified as Online Debit in this study, in order to maintain the Bank's customer base, and address competition from new third-party entrants.

This study analyzes the market for such a product, and determines the potential size of the market. Market segments were delineated and identified through a careful analysis of the customer appeal of Online Debit. General equations were derived to determine the key market statistics that would be useful to the Bank, such as the number of transactions expected and the average value of each transaction. A comprehensive search for statistics was conducted to parameterize the general equations, and this data was input into Microsoft Excel to calculate the key market statistics. Key strategic recommendations and lines of future investigation were also presented.

This study provides the Bank with the general equations and key market statistics it requires, in order to create the profitable business and pricing models for its new product. The study also provides detailed market information and strategic advice, so that the launch of Online Debit will be highly successful.

Paper Truncation Assessment of the Bill Payment System At BCB

Martin Ho and Chris Rocha (MIE)

This thesis outlines the results from the assessment of the issues surrounding paper truncation in BCB's bill payment processes. With the conclusion of the extensive research and evaluations performed, it is recommended that BCB use an enterprise wide design approach to perform paper truncation in 2004 while cultivating online banking and expanding its capabilities of bill consolidation. Paper truncation should provide savings of approximately $14 million per year on average between 2004 and 2010, with an initial onetime investment of about $6 million. The return on investment is 4.5 months and the net gain per year would average to over $11 million annually. Once paper truncation at the branch is complete, branch tellers would be able to spend more time on sales and customer relationship management and that should reap additional benefits to BCB. Such benefits would include increased customer satisfaction, better customer and creditor relationships, additional share of wallet and many others.

Developing a Business Case for eStatements: Understanding the Legal Requirements

Jullie Betty Tran (CHE)

The delivery of account statements by an electronic channel would provide clients with the convenience of managing their personal accounts using the Bank's Online Banking services. Further, the electronic delivery of statements would enable the Bank to reduce the substantial costs of issuing paper statements as well as to generate new revenue streams through the offering of additional services. These are the motives for the Bank's eStatement initiative. As with all of the Bank's activities, the eStatement initiative is tightly governed by the Bank Act of Canada. Moreover, eStatements are also required to comply with federal legislation that regulates electronic commerce in Canada. This thesis project studies three issues fundamental to using eStatements including: the legal effectiveness of using an electronic agreement to obtain client consent to switch to eStatements; how to ensure that eStatements are reliably transmitted; and the conditions under which electronic documents are deemed as "received". To understand Canada's legal environment, past court judgments were reviewed and current practices were examined both internationally and across several industries. The proposed recommendations are based on the features of a legally binding electronic agreement, the use of e-mail notifications for the active transmission of electronic documents and the adoption of several theories which might help define the term "received". Through the consideration of the legal requirements and recognition of the methodologies used to address legal issues and reduce risks, the development and implementation of eStatements would be facilitated. This would ensure that eStatements are legally compliant and as a result, the Bank and its clients would be able to realize the benefits of the initiative upon implementation.

Evaluation of Project Management Methodology for IT Projects in the Financial Services Industry

Catherine A. Gucciardi (CHE)

Software and wireless technologies continue to revolutionize the banking industry in Canada and abroad. Examples include the growing use of online or Internet banking as well as the creation savvy consumers due to the availability of online investment information and reporting.

Despite the positive potential for information technology (IT) projects within the banking industry, IT projects have a poor track record of success. The goal of a financial institution that invests significant funds and resources in IT projects is to increase the likelihood of project success. Many factors have been identified by industry professionals to impact project success, one of which is the use of formal project management methodology.

The focus of this thesis was to evaluate the project management methodology currently employed by a large Canadian financial institution. In order to conduct the evaluation, it was necessary to first identify the industry best practices for fundamental aspects of project management as well as specific elements of project management methodology.

The evaluation of their methodology as it applies to the project management life cycle has resulted in various recommendations to bridge the gap between the company's and the industry's best practices. Within the planning phase, it is recommended that key success factors are established and that the communication plan mechanism and content be revised. Within the closing phase, a formalized evaluation process should be added to evaluate and reward team performance, individual performance, and vendor performance.

At this time, the institution is not able create high-level reports of the track record of their project successes. However, the institution is working towards this goal with the use of a portfolio management tool.

In order to gauge how well the project management practices truly engage people working on the project and their respective talents, it will be necessary to conduct further examinations, such as by surveying end-users of the methodology.

Business Value of Instant Messaging: A Feasibility Study for a Canadian Financial Institution

Andrea Chan (Eng. Sci)

Poised to become even more pervasive than email, Instant Messaging (IM) is the latest communication technology to infiltrate today's business community. A particular Canadian Financial Institution (FI) is thus keen to determine what business value an IM platform can offer their company. By exploring its history in consumer use and its current place in business, the strengths and deficiencies of IM are determined. A feasibility analysis is performed by first defining the factors of an IT investment that add value to the business; these are Financial Impact, Architectural Contribution, Operational Delivery and Strategic Fit. Next, a set of Key Selection Criteria for an ideal IM platform are derived; these include Functionality, Security, Administration, Presence Integration and Price. Evaluation of these criteria was performed against three currently available Enterprise IM platforms, along with both operational and economic analyses.

What sets IM apart from other communication tools is its real-time component, called Presence technology. Presence gives users the ability to see the availability status of other users. In doing so, IM can remove the latencies in many business processes. IM also allows users to converse via different media types, and in multiple chats simultaneously. Through chatrooms and application-sharing functions, IM breaks down the geographic barriers between employees in different remote locations. Furthermore, Presence can be integrated into other back-end applications to help the business arrive at a real-time collaboration platform. However, IM's greatest weakness is that, unlike email's TCP/IP, there is currently no standard protocol that allows all IM networks to interact. This lack of interoperability is preventing IM from becoming as ubiquitous as email. In spite of this, the operational benefits of IM outweigh the lack of interoperability. Hence, the deployment of an IM solution that fits the Key Selection Criteria is deemed to be a worthwhile investment.

Price Elasticity of Term Deposits and GIC Products

Peter Cheung (CHE)

In the increasingly competitive Canadian financial services industry, interest rate spreads between money borrowed and lent are among the lowest in the world. The focus of this work was to study the sensitivity of the market to changes in interest rates offered (the price elasticity) on guaranteed investment certificates (GICs) and term deposits. Published literature in the area of consumer behaviour in the financial services industry was explored in order to give a qualitative impression of customer price elasticity. The historical relationship between the size of the GIC and term deposit market, and the average GIC interest rate offered was then examined. Both the literature review and historical data indicated that Canadians have become increasingly sensitive to pricing, with improvements in technology and variety of alternatives being cited as prime drivers of the change. A strong correlation between product demand and interest rates has been pronounced in recent years. Purchase data exclusive to one of Canada's largest chartered banks, including information on discretionary bonuses offered on top of posted GIC rates was examined, leading only to the conclusion that improved accessibility to customer data was necessary in order to facilitate adequate segmentation of the market needed to model price elasticities.