E-Commerce
From the research, we found that the TUC Stakeholders Pension Scheme has been selected the Prudential to be their commercial partner following an extensive 6-stage selection procedure. TUC found that the Prudential is the one that able to offer the high quality of admin system to support the TUC Stakeholders Pension Scheme and their marketing strategies was developing highly as it can suit the needs of the small unions and small employers.Besides that, Prudential has the experience of providing group pensions and of working with affinity groups. The most important is the Prudential is the one UK’s largest institutional investors and the largest pensions and unit trust provider. This is why that the Prudential had scored highly against the TUC’s assessment criteria during the selection process. The TUC has set their goal which is ensure that TUC Stakeholder Pension Scheme is the best of the market- the one against which other stakeholders pension scheme will be judged.It said by the TUC General Secretary John Monks. Or it can been said that they are teaming up with a top pension provider (Prudential, 27 Jul 2000).
By running the TUC Stakeholders Pension Scheme, it will provide a cost efficient way of people to save for a pension of the first time. Moreover, the provision of a TUC wide- stakeholders pension scheme, they enable the TUC to get the better financial deal than would be possible from unions working individually. After interpreting the information that what we get, we found that the Prudential’s stakeholder pension will bring together the two strongest attributes of Prudential’s bunisness and it can proven that they have a long experience in delivering quality financial product as one of the Britain’s most innovative providers of the financial services by using the new opportunities which are presented by the advancemnt of the technology and the media revolution. Certainly, we can get the information about their product through online, they also enable customers to buy and manage their own stakeholders pension products. ( Prudential, 27 Jul 2000).
Furthermore, the Prudential invested heavily to bring in the new technology so that it help us can administer the scheme online and the employee can access their pension details online either is from home or at work immediately. The Prudential’s e-commerce stakeholder solution which is supported by a service centre, which is the way that enables us and the employees to have a call for help and acquire for more details and information of it. They had been stated that we can gain from the lower cost, easier and faster adminstration and a better quality service. Meanwhile, the Prudential is offering the some services for us such as reduce using the paper, provide more accurate and efficient data processing, allows immediate online access to information, to improve the communication between the employees, perform the simple calculation, and view or download all the product literature ( Prudential’s E-Commerce Stakeholders Solution). It also helps to advances in data warehousing and customer relationship management enables instituition to better target individual customers with tailored services and products.In terms of increasing turnover, they are existing the customers whom are lower than the new customers as the marginal cost of cross-selling products and services. It was believed that it will brings along benefits to the institutions ( Prudential Issues in Electronic Commerce, 2001).
After restructuring and re-engineering the traditional operations, Prudential had occured some changes on their business’s results likes, their new business achieved profits up 46% at $603 million UK dollars, record in-flow of new funds of over $ 18 billion UK dollars, related the profit before admortisation of goodwill up 6% to $996 million, and plans for IPO of a minority stake in. It had shown that, this strategy is using to maintain the leadership postion in rapidly changing financial services sectors. Besides that, the technology is be used to maximise the development and efficiencies across all the areas of the business instead of giving the customers a better access to their business as high levels of customer services and drives down unit costs. Not only for these benefits, they also bought M&G and integrate it successfully with PPM in UK, which allow them to pay more attention on those areas of fund management whre they have unique strengths and competitive advantages likes unit trusts, fixed income, pooled life and pension funds (Prudential plc 1999 Unaudited Results, 23 February 2000).
As we know, the e-commerce also occurs the potential risks to institutions, expecially through online. For instance, operational risks issues, which is more relying upon the system’s relaibility and intergrity and as a results is highly vulnerable to operational risks.Simplify that, system mulfuntional or failure due to internal or external causes, technical incompatibility of systems, system obsolencences and breaches in security which will increase the operational risks. The major part that always curious and concern by all the companies is the security. In terms of respectful of dealing over the internet, it will be considered less secure than other distribution channels likes closed networks, ATMs and EFTPOS. Unless they had control and procedures strongly which helps to protect the information and not easily hacked by other users. Certainly, it may need high level encryption techiniques, firewalls and other security tools.
Last but not least, the reputational risks will be affected by the electronic commerce. For example, electronic commerce customers expected they can access to financial services, accessible from almost anywhere within 24 hours. Wide accesesbility was introduced and promoted to financial products and services, instituitions runs the risks of the customer dissatisfactions should services such unvailable due to system faults, mulfuntions and it is under maintenance. Mostly the problems are caused by breakdowns in system faults or breaches in security which are may lead to reputational risks. By giving another examples, likes related to business to business when the customers are transfering any transactions or placing any order through the bank sites. Just because of the bank’s involvement in this process, there are certainly will be occurs some risks on it. Likes, customers will be consider the bank implicitly guranteeing the creditworthiness of the other part to the transaction and this could have reputational consequenses for the bank in the event of non-payment.