Barclays bank is a global financial services provider with interest in personal banking, corporate and investment banking, wealth and investment management and credit cards. It was established over 300 years ago and has its head office in London. Its management structure consists of a board and an executive committee. Barclays practice universal banking and measures its performance using the following key performance indices (KPI)- capital, returns, income growth and citizenship.
These KPI are obtained from internal sources of information. In 2011 for instance it made gross new loans to UK households and businesses that totalled GBP 45 billion. While this loan information is internal there are also other information that are external to Barclays which is of great importance in its pursuit of success. One such information is information about competitor's lending rates.
1.1 SOURCES OF INFORMATION IN BARCLAYS BANK AND THEIR USES
Internal information is information obtained from within Barclays bank- Information on the bank's loan portfolio is internal information. The Bank's loan portfolio is used to determine how the banks funds are used. Banks source funds and in turn use these funds to create loans. Loans are of various types and classification can be based on the purpose which the loan supports or the maturity of the loan. Banks usually desire to have a mix of the various types of loans which they consider the best at any material time. Information on the loan portfolio provides management with the information required to make decisions on its loan portfolio.
External information s information obtained from outside Barclays bank -The Prime Lending rates that competing banks charge is external information. The Prime lending rates are the interest rates that competing Banks like HSBC, RBS, and NATWEST etc charge on loans to their most credit worthy customers. This rate adjusts with factors that affect the banks cost of funds. Information on prime lending rates of competing banks helps the bank to price its loans in such a way as to make its loans competitive and to assist the bank to work on optimisation of its cost of funds.
Primary information is original information-Savings deposit record is primary information. Record of the amount of fund obtained from savings deposits for the month of January 2013. Barclays bank source funds from deposit accounts which includes savings account, borrowing including obtaining funds from the Bank of England and long term sources of fund which include includes capital and funds from bonds issue. This record helps the bank to track its performance in sourcing funds from savings deposit
Secondary information is modified primary information- Return on equity, cost to income ratio are examples of secondary information. Return on equity is a measure of the overall performance of the bank. Barclays. Barclays use return on equity to assess how well it is able to increase shareholders value.
Formal information is information obtained from a formal source - information about the appointment of a new chief executive officer contained on the banks website is formal information. The use of formal information depends on whether it is external or internal.
Informal information is information that comes from non formal sources like social interaction, grapevine, etc - Information about savings deposit rates obtained from a Barclays bank staff in a pub. The use of informal information depends on whether it is external or internal.
1.2 RIGHT INFORMATION AND GOOD DECISION MAKING
A good decision is a choice of the best course of action from available alternatives. The right information keeps the decision makers well informed and enable them make the best choice. The right information consists of accurate and relevant data and facts, evaluations, interpretations etc that ensures that decision makers are objective. Decisions are usually taken by senior executives who have overtime acquired a great deal of experience and developed great decision making abilities. Using the right information increases the chances that the decisions made will be good and serve the best interest of the bank.
1.3 RECOMMENDATIONS FOR IMPROVEMENT
Improvement in decision making will require a better decision making process. Improving on the components of decision making process will therefore be required since it will make it more likely for good decisions to be made. Listing the decisions to be made and prioritising them, identifying the information requirements and what can be obtained for each decision, the major roles required and who performs them etc will be very helpful in making better decisions. The following components of decision making can be employed in order to make better decisions.
Identify and prioritise the decisions to be made
The decisions to be made should be listed and then arranged in order of importance. This provides the opportunity for more time and attention to be given to the analysis of the more important decisions.
Take inventory of what is required to make each decision.
Simple but very important questions like what information is required and what is available? Who performs what? How well were such decisions made in time past? How often is that decision made? Etc. The aim of these questions is to have a better understanding of the decisions to be made, identify the decisions that need improvement and possible ways of improving on the process of making the decision to make them more effective.
Intervene in the entire decision process
Having identified and prioritised the decisions to be made and also having an a good understanding of what needs to be done places the organisation in a good position to intervene in a way that improves on the roles to be played, the processes involved, the systems to be used. This intervention should consider the various methods that can be used to improve the decision making process and the entire decision process including the execution of the decisions.
