A Working Organization 1 Gerald Musger Working Organization: Trends and Challenges for Professional and Managerial Staff Background: a bundle of new developments Competition in the bank sector Virtualization New mix of services offered by banks European developments Discussion groups on the Cypriote situation: questions

A Working Organization 2 Gerald Musger A bundle of demographic, technical and social developments influences the background European societies becoming older and richer, but concentrated at middle aged working people and smaller groups of retired Social security systems becoming more and more inbalanced because the number of working and paying citizens relatively declines Private accumulation of money/capital and private individual pension systems becoming more and more important

A Working Organization 3 Gerald Musger A bundle of demographic, technical and and social developments influences the background Always actual account services all over the world through electronic networks and internet Fast systems of electronical proving, comparing data and simulating options or scenarios All field representatives always easily connected with the bank centre (mobile technology) Automatic systems allow customers‘ self service or e-banking from their homes or offices

A Working Organization 4 Gerald Musger A bundle of demographic, technical and social developments influences the background Diversification and changes of lifestyles Job and private life stability declines Legal deregulation accelarates changes European market motivies for mobility European monetary union improves private customers‘ crossborder activities (e.g. looking for cheap credits) European legislation improves the safety of Europewide activities

A Working Organization 5 Gerald Musger Competition in the bank sector: Key elements for success... Big is effective (cf Mergers and Acquisitions module) Outsourcing, insourcing and networking Focus on customers: lowcost, anytime, anywhere! Flexibility in change, decisions, offers, services Balancing of engagement in new fields (e.g. advisory or insurance services, new economy) and disengagement from declining or instable fields (e.g. old economy industries) Reconstruction: technology, human resources, logistic

A Working Organization 6 Gerald Musger Competition in the bank sector: Measures phase 1: automatization Back office automatization by electronic systems Development of electronic networks between departments inhouse and branch offices Outsourcing of special departments: electronic data processing departments becoming independent software companies Bank employees need a lot of new computer skills Some old competencies becoming less important P&MS: control partly shifting from persons to electronic systems

A Working Organization 7 Gerald Musger Competition in the bank sector: Measures phase 2: restructuring Cashier areas reduced: self service areas extend opening times with less personal Advisory departments getting more important: the wide field how to invest money needs profound information and advice New additional services (insurances, funds, pensions) for private customers New services for companies, esp. small and middle sized enterprises (the bank as their finance department)

A Working Organization 8 Gerald Musger Competition in the bank sector: Measures phase 3: competence changes Reduction of branch offices and allround staff Increase of specialized staff in central branch offices and for company customers: advisory competencies (e.g. investment consultance) insurance specialists stock analysts and brokers Field consultants with allround competencies to advise private customers at their villages and homes Decrease of hierarchy levels and managerial positions

A Working Organization 9 Gerald Musger Virtualization of banking services (1) Following economists‘ definitions we may call money a sort of „virtual work“. When you have a twohundred Euro note in your hand, you cannot see what real work it is based on. Now we can see new developments: A banking operation need not be operated in a real branch office. An account sum need not be based on real money. And you do not see where and when all the operation data are processed, proved, administrated... Welcome in the world of „virtual money“!

A Working Organization 10 Gerald Musger Virtualization of banking services (2) Allows fast and global transfer of virtual money of any type Extends bank working time to possible 24 hours 7 days Allows separating customers‘ and staff‘s activities and work of service partners by time and location Establishes a new customer – bank – relation by shifting some part of service and risk to the customer Makes the staff working back office anywhere less visible

A Working Organization 11 Gerald Musger Virtualization of banking services (3) Challenges for P&MS: Competence: The specialists in banking operations are as important as the specialists in data processing system architecture A virtual network needs sophisticated systems of supervising and controlling staff and quality of work The globalized network of dislocated and diversificated services needs fast and precise decisions with high chances and risks – an huge challenge for managers Virtual bank organizations are by nature instable: change management is necessary

A Working Organization 12 Gerald Musger New mix of services offered by banks Giro/credit card services Investment funds, mortgages, deposits Internet and telephone banking Pension insurance and pension funds Lifecare insurances systems for car financing Special finance services for small and middlesized enterprises Investment engagements in new fields of industry, tourism or infrastructure

A Working Organization 13 Gerald Musger European Market Developments Despite EU directives the various national legal systems remain New services increase income and improve bank profitability: e.g. payment/credit card services, pension and life insurances Despite common currency price spreads seem to remain important (local and European markets) Employment and wages in banks overall Europe relatively stable Strategic positioning and adaption of legal systems to European right already ongoing in applicant countries

A Working Organization 14 Gerald Musger Questions to debate the Cypriote situation Which of the mentioned trends are actual in Cypriote banks? (personal experience or feeling, data available) Which are measurable results: hierarchy levels development of staff‘s quantity/quality of skills offer of services etc. Which are the main chances of developments? Looking 5 years forward: What will be changed? And how can all these changes be managed?