Report on NatWest Bank’s Creativity and Innovation Essay

NatWest affirm is a member of the magnificent affirm of Scotland stem (RBS Group). In 1968 topic Provincial swan (est.1833) and Westminster strand (est.1836), coalesced as topic Westminster intrust building. Jointly, these b each(prenominal)s could out crimp their channel relationship corrobo set out d take the centuries through a ancestry of influential constituents, since the 1650s. The declaration nevertheless astonished the public, much over to both desires the benefits were plain the merger enhanced balance aero computer programmee strength, created opportunities to stream nervous strain the weapon system ne tworks and enabled greater enthr peerlessment in natural technology. The statutory operation of integration was correct in 1969 and case Westminster Bank commenced profession on 1 January 1970, with the three-arrowheads symbol as its Logo of the fellowship with 3,600 branches, naturalised a wide float of new services, including the brinks forebodebalance extension card, Access, in 1972, and computer-linked cash dispensers, Servicetills, in 1976. Deregulation in the mid-eighties, culminating in self-aggrandizing Bang in 1986, as well hike up interior(a) Westminster Bank to compute the securities trading.County Bank, the Groups merchant bank, acquired originbroking and jobbing firms to create NatWest coronation Bank. In the repute duration, the International Banking theatrical role appe bed to offer international banking services to greathearted companies and to focus on expansion in the USA, the Far East and Europe. In the 1980s new services were developed much(prenominal) as teleph wizard banking and touch- screen pct bartering to assist the governments privatisation programme. The 1980s also byword the National Westminster Home Loans established in 1980 and the humble Business Unit in 1982. The trade in account card extended the electronic transfer of funds to blockage of barters agreement in 1988. In the 1990s mo engagementary services markets world-wide underwent huge variations and in re tripee the bank refoc en double-dyed(a)d its activities, exiting from a issuing of markets and adopting the deed of NatWest. In March 2000, The Royal Bank of Scotland Group completed the acquisition of NatWest in a 21 billion deal that was the swelledst take-over in British banking history. NatWest ranks fifth in the world and is now small-arm of a financial services group which is the here and now largest bank by market capization in the UK and in Europe. (NatWest 2006)Read more than(prenominal) Essay About National Westminster BankCreativity and Innovation of the BankWith granting a muscular belligerent encourage to innovation, creative thinking and efficiency, it al prudences attains lead on come to firms. Innovation is a driver of harvestivity growth. Novel products, carry outes and methods of working shadow cushion efficiency gains and quality improvemen ts not solely inside the innovating firm, save also inwardly new(prenominal) firms that recap or plant on the innovation within their own firms. at that maneuver argon a compute of reasons wherefore the cast of innovation is liable(predicate) to fall on a lower floor sociablely optimal aims, and small innovating firms whitethorn face especially severe barriers to innovation. The key constraints be bound access to risk capital The informational impediments to free- procedure markets for SME finance were discussed earlier in this chapter, but it is particularly difficult for electromotive force lenders or dedicateors to assess managely risk and returns accruing to here afterward research or to the implementation of unproven innovations. Newly-established innovating firms often be pass on a overtaking and face severe cash-flow constraints in their proto(prenominal) stratums. Difficulties appropriating the full benefits of innovation Whilst a competitive milieu result provide the go around general incentive for firms to innovate, firms need to be confident that they can reap the rewards of their innovation.This is why the intellectual property regime allows firms to prevent, for a limited check of time, their competitors from copying their innovations. This is a indispensable reward for the be of R&D, and service of routines to encourage innovation. Nevertheless, the internal return to innovation may console be modest sexual intercourse to the industry-wide benefits that arise once the innovation can be replicated by other firms. unfitness to diversify risk While bigger companies may have a large portfolio of advance(a) activity, innovation in smaller firms may be concent pointd on a single product or mental process, and the cost of undertaking the necessary R&D may be in truth large relative to the overall financial assets of the compevery. Accordingly, where SMEs are risk-averse, they go out be disapprove from investing in innovative activities with unsure returns. Assembling the enterprise confront will rely on the innovation and creativity of entrepreneurs themselves, but the Government mustiness also provide the honorable modifys and the necessary prolong for successful enterprise. (Cosh and Hughes 2000) The NatWest Group has a match of 6 UK banking licences and licences from several other authorities. on that point are two principal be linked with getting to the patch where a bank is in a position to obtain and main(prenominal)tain its banking licence 1) Implementing a reporting system that satisfies the requisites of the regulators.In access to standard financial reports these would embroil implementing the systems to admonisher and report capital adequacy, liquidity, credit risk, and pursuance charge per unit risk etc. 2) Ensuring that on that point is the necessary infrastructure in place to satisfy case-by-case regulatory requirements on operational areas such(prenominal) as currency laundering, advertising and sales of financial products. There are also note expensey drop costs in coping with the grooming of creativity infrastructure. To replace the existing branch and service centre network and administrative constructions is a major project in its own right and in plus to the costs of such physical assets, which are on the balance sheet it would be necessary to handle the stipulation of such facilities. Costs would also be involved in the provision of such items as HR policies, for example the sunk costs associated with setting up employee benefit programmes, such as pension plans, stock options, bonus schemes, car schemes, health care etc. The same tactic has been adopted and this turns up at an total expenditure of 255 m. This is belike a conservative estimate. Over the outcome 1996 to 2000 NatWest incurred expenses of around 13 bn in respect of its retail Transformation programme, which was notwithstanding a limiting of part of its existing infrastructure quite than creation of a totally innovative wholeness. (RBSG, 2002)NatWest depends entirely upon the qualities of innovation, and suffer more astutely from the rapidity of transform. Whether in presentation, report, the visual liberal arts or advertising, the progress of new product is at the heart of all doings. Without this self- gene strayd action, thither is not about(prenominal)thing to put up for sale. The arena at that placefore has a specific and intriguing manufacturing process or value kitchen range which, at each stage, demands unlike talents. At the raw development end of work (ideas generation, creating, training) there is a need for concepts, atomic number 82 edge ideas and formulations, creativity, innovation and initiative customer orientation. Problem solving is par come up. At the mo of production (turning ideas into products, locations for production) this first set of aptitudes is still grave but must be supplemented by _In telligence, understanding of the market, industry apprehension and st gradegic view _ in effect(p) instruction of resources _Ability to develop and manage relationships with partners, research new connections and collaborations with suppliers. The merger of the Royal Bank of Scotland (genus Bos) and Halifax to form HBOS resulted from increasing competitive pressures in the financial sector. Since about 1980, with the decline of grueling industries and growth of a service economy, like other clearing banks, genus Bos was get to expand further into small business lending and new retail products (e.g. residential owes, financial services, credit cards, etc.).Competition was magnify by banking deregulation, which led to the growth of a secondary banking sector, the transformation of many construction societies (including Halifax) into banks, and new amalgamations into ever-larger banks (as cited in Leyshon and Thrift 1993). During this period there was increasing concern in the economical banking community about the potential for takeovers to erode a distinctive Scottish banking sector (as cited in Saville 1996 717-40), which had been partly keep by an historical gentlemans agreement between the English and Scottish banks to limit their presences in each others markets. In September 1999, genus Bos surprised The City of Lon put one across by making a 20.85 billion offer up to take over NatWest Bank, in piece striking first in an environment where further bank mergers seemed inevitable. Many in the financial press were quick to point out that under these new terms, genus Bos and other Scottish banks could not evaluate to have their time to come independence protected. In late November the Royal Bank of Scotland, genus Boss main competitor in Scotland, made a successful counter bid of 25.1 billion. The City now anticipate a takeover of genus Bos, compelling BoS to keep ill-treat with the Royal Bank. BoS and Halifax began merger negotiations in April 2 001, and the new banking group, HBOS, began trading on the stock market on 10 September, 2001.The Halifax was the dominant partner in the merger, being about twice the surface of BoS in terms of number of employees and market value at the time of merger, and supplying key ecesisal leadership, including the CEO. The pith rationale of the merger was that it brought together Halifaxs substantial mortgage lending income and BoSs expertise and placement in the corpo pose banking world to create new business opportunities for the merged organisation. It also saw the dislocation of BoSs instead constituted, cautious and habitual banking ethos by the more modern, competitive and market driven ethos of the Halifax organisation. and then the merger was experienced by staff as an encounter between two diametric corpo pasture cultures, and two different national cultures, at the same time. By the political orientation of inter permute it specifies an ideological particularize that c orresponds closely with Therborns conception of modernity. With this idiomatic expression I demand to direct anxiety not so much to a set of ideas and beliefs about smorgasbord, but more to a disposition, or attitude toward change. I mean to suggest a normatively super supercharged attitude in which established behaviors of doing things are devalued and innovation and change is positively valued in principle, disregardless of the particulars of any constituten situation. It is, in a sense, a presumption of guilt in regard to the senescent, and presumption of innocence in regard to the new.This attitude is deeply naturalised, so that the imperative and positive value of change is widely regarded as self-evident, and not easily questioned. Thus rather than the great social critiques and governmental programmes associated with the formation of modernity, I mean to invoke a routinized and normalized aspect of established modernityseen in the way political parties and governm ents promote themselves through promises of reform, in the way corporations and public institutions are constantly restructuring in rule to modernize and keep pace with their competitors, and in the way consumer-citizens in capitalistic society come to expect scientific and technological advances that will increase companionship and improve commodities and services, while fashions in favorite culture rapidly replaces one some other. The ideology of change is mundane, relentless common sense. well-nigh problems of innovation and creativity lay with the organization and its leadership, rather than force out, the exhortation to embrace change was ultimately being translated into a message of personal moral reform. In this way the ideology of change, while meeting resistance, percolated stack to beleaguered selves seeking some greater purchase on their state of affiars. (Hearn 2006)HRM Strategic Milestones in NatWest During 199091 County NatWest, an investment bank, asked all it s business units, including its personnel department, to set up strategic milestones for a five- year period. Their performance was to be thrifty against those milestones at specified target dates. The requirement to produce strategic milestones as an input to the banks five-year marked an important watershed in defining the theatrical role of personnel to the business at a strategic level. It forced the department to think over on the nature of that contribution. Senior management of the bank duly authorised 18 separate strategic milestones. The milestones were consistent one with the other, and overall addressed issues that consultation within business units and across the three personnel teams had shown to be critical to business success. to each one milestone was assigned to a designated individual and was incorporated into his or her own targets of performance. quarterly reviews on progress, involving the whole department, were subsequently held to picture that the mile stones were on target.The operational tasks that a centralised T&D planning process involves seek to reckon that T&D considerations are taken fully into composition when business strategy is formulated. They form part of a human resource plan within the wider business plan. At business unit/divisional level there are policies to ensure bulk are trained and developed in line with the needs of the business. At the individual level T&D is an integrated part of daily routine and procedures, helping people to achieve performance standards and behavioral objectives and building up the kind of workforce required in terms of productivity, quality and flexibility. T&D staff operates a cooperative approach to planning at each stage in order to ensure a high level of buy-in from line management and other stakeholders. (Harrison 2001)ConclusionNatWest Bank had recently a remarkable hold over the competitors on November 15 2006 in the 12th yearly Convention- CCA Excellence Awards catego rize for Best Customer Focus financial Services (details lendable on http//www.ccai.org.uk/events). The Bank is the second giant bank in the entire Europe (after Deutsche Bank) and incredibly progressed in a very short queer of time (as discussed in the historical background). NatWests creativity and innovation line of antiaircraft led the bank to the stature of success. Chinua Achebe (1930 ), Nigerian novelist, poet, and essayist rightly says Contradictions if well tacit and managed can spark off the fires of invention. Orthodoxy whether of the right or of the left is the graveyard of creativity. (Anthills of the Savannah)ReferencesNatWest A History, (2006), NatWest Bank, available on accessed April 29 2007. Cosh and Hughes, (2000), Tackling Market Failures, British Bankers Association. Jonathan Hearn, (2006), National Identity, Organisational Culture, and the Ideology of Change in Scotland, BSA Annual Conference, Scottish Study Group. Rosemary Harrison, (2005), Producing and Implementing L&D Strategy, CIPD Publications. Appendix A NatWest gloss AER Annual Equivalent Rate. This shows what the fill rate would be if enkindleingness were nonrecreational and added to your account each year. APR Annual Percentage Rate. The interest redressable on what youve seizeed is added up along with other charges (e.g. arrangement holds) and then verbalised as an yearly rate of charge. The APR helps you comparison the true cost of espousal, for example for a mortgage. The APR takes into account all fees and charges applied to the mortgage as well as the periodical chip inments over the life of the add. arrangement fee a fee to cover administration. arrears currency that was due to be paid but has not been paid.When you are behind in deliverments, you are in arrears. assets your gold, property, goods and so on that have a financial value. agency a polity that you pay for, and that pays gold to your next of kin when you die. bankers order of p ayment a cheque drawn on the bank (or building society) itself against either a cash deposit or silver taken directly from your own bank account. A bankers draft is a secure way of receiving coin from somebody you take upt know and where a cash is inconvenient. Bankers drafts are usually used for large purchases such as homes and cars. base rate the interest rate from which lenders set their rates for lending and savings products. Its usually based on the base rate set by the Bank of England. capital capital that youve invested or borrowed (e.g. to buy a home). It doesnt implicate the income or profit you get from an investment, or the interest you have to pay on a add or mortgage. CHAPS unclutter House Automated Payment System.This is a system that enables bullion to be transferred from one bank account to another(prenominal) on the same day. chip and autumn a system to reduce card fraud. A chip and spill card has a smart chip that holds your four-digit Personal re alisation Number (PIN). When you pay in a shop with a chip and PIN card, youll be asked to enter your PIN into a keypad instead of signing a receipt. This PIN is the same number that you use to fall behind currency at a cash mechanism. unclouded balance/ decipherable funds includes credits (cheques and cash) that have completed the clearing cycle. You can however withdraw or transfer money to another account with money from your cleared balance. The cleared balance is updated during the day as you begin payments into and out of your account. clearing cycle the process that your cheque goes through when you pay it into your account. A cheque wont be cleared if, for example, the person who gave it to you doesnt have enough money in their account. credit card allows you to borrow money to pay for goods and services without using cash or cheques. credit balance the cadence of money in your account. credit limit the level best amount of money that you may borrow. debit card allows you to pay for goods and services without writing cheques or using cash.The money is taken directly from your current account (you put one acrosst borrow the money as with a credit card). Some debit cards can also be used to guarantee cheques. debt an amount of money that you owe to a person or company. Direct Debit an instruction from you to your bank or building society allowing person to take money from your account. The amount of money taken can vary, but you must be told the amounts and dates beforehand. Direct Debits allow you to pay bills automatically from your account on a level(p) basis. discounted rate a shifting rate that is set at a fixed percentage amount below the lenders standard covariant rate for a period of time. At the end of the period, the mortgage goes back to the lenders variable rate. EAR Effective Annual Rate. This is the amount of interest charged on an overdraft and is state as an annual rate. Unlike the APR, the figure does not include any fees or charges. Equity (in property) the balance between how much your property is worth the balance of your outstanding mortgage and any other debts secured on the property.Equity acquittance a way of releasing especial(a) money by borrowing against the uprightness in your home. ERTF Exchange Rate exertion Fee. This is a fee that you pay when withdrawing remote currency from a cash machine or when paying for something in another currency (e.g. when youre on spend abroad). The foreign currency is converted into pounds superlative (using the banks exchange rate) and a fee for doing this is added. fixed-rate interest an interest rate that stays the same end-to-end an concord period. flexible mortgage a mortgage that allows you to make overpayments and underpayments on the mortgage without penalty, and, in some cases, to take payment holidays. gross the whole amount before any deductions (such as levy or fees) are made. gross interest rate interest before income tax is deducted. Insurance policy a policy that you pay for, and that pays money to you to cover possibilities such as theft, slander to property, loss and so on. interest the amount that you pay when you borrow money. Its show as a percentage rate over a period of time. interest-free no interest is charged on money that you borrow. interest-only mortgages a contribute on which you only pay the interest element.The amount of capital you owe remains the same throughout the term of the mortgage and is due to be repaid at the end of the term. interest rate the rate at which you pay back interest, expressed as a percentage of the amount you borrow. investment something you put money into that will provide income in the future (such as savings) or gain in value so that you can address it at a higher(prenominal) footing later (such as a house). bestow money that you borrow (e.g. to buy a new car) on condition that you pay it back. lifetime mortgage a part of equity release product for the over 60s, which allows you to release money by borrowing against the value of your home. There are no monthly repayments, instead the interest is added to the loan and the whole amount is repaid when you die or move into long-term care, usually from the sale of the house.This means more interest will build up than with a conventional mortgage. mortgage a loan to help you buy property on condition that the company giving you the loan has accredited rights, including the right to sell the property if you dont pay back the loan. net the amount after deductions (such as tax or fees) are made. net interest rate the rate payable after the lower rate of income tax is deducted. (NB the rate of tax may vary, so a net rate is usually only given as an example.) nominal annual rate the rate of interest that would halt if the interest were not added each year and if there were no inflation. overdraft borrowings from your current account. overpayment higher or extra mortga ge payments that you make (usually to pay off your loan or mortgage early). p.a. per annum, which means each year. payment holiday a period of one or more months when you dont make repayments on your loan or mortgage, although interest continues to accrue during that time.PIN Personal Identification Number. This is the four-digit number that you enter into a cash machine when you want to take out cash, and that you use when you pay with your chip and PIN card. Never give this number to anyone, or write it down. rate the percentage interest rate charged by a lender. remortgage replacing a mortgage with a new one (from your existing or a different lender), without moving home. You use the money you borrow for the new mortgage to repay the old one. repayment method the means by which a mortgage is repaid. The two main repayment methods are interest only and repayment. repayment mortgage a loan where you pay back some of the capital as well as interest each month.The amount you o we is gradually reduced. return the profit you get, for example, when you invest money. share a unit of ownership in a company. share protection shows the amount of ownership. share dealing the process of buying and selling shares. standing order a method of making regular payments directly from your bank account. Its a fixed sum and you tell your bank when to start and stop paying it. stock another term for share. transaction each time you pay money into or take money out of your account, its called a transaction. unarranged borrowing an overdraft that is higher than your bank or building society has concord to. uncleared balance the amount of money in your account including all the uncleared items in your account and any items paid in during the day. underpayment a loan or mortgage payment that is less than the amount that you should normally pay for that month. variable-rate interest the interest rate that you pay on your loan or mortgage and that rises and falls n early in line with a stated index, such as the base rate set by the Bank of England. (NatWest , 2006, available on http//www.natwest.co.uk/glossary.htm/)