Resarch Paper on Chase Bank, Bank of america, Final project, you are required to

Question

Resarch Paper on Chase Bank, Bank of america,

Final project, you are required to identify and research a publicized security breach that occurred within the last five years. You will research, analyze, and report on what aspects of perimeter and other security went wrong, what industry accepted protocols were not followed, and the short and long term impact on the company and the industry as a whole. GUIDELINES You should research and identify one publicized breach that occurred within the last five years. Your research on this breach should include but is not limited to:

Background Business name and history (short version) Industry Hardware/software/applications involved (if available) Timing (Was this relevant, as with the Target breach?) • Breach/Compromise Attacker’s methodology System(s) attacked • Exfiltration Data/information exfiltrated? What data? Amount of data? o How was this exfiltrated? (This may not be available.) • Potential Effects to the Persons Involved For example, credit monitoring, fraud, and so forth • Impact to the Business Rapport with the business community Lawsuits Civil (consumers suing) Civil (commercial entities [e.g., banks] suing) Civil (government [e.g., FTC with Wyndham Hotel lawsuit]) • Lessons Learned What could the affected business have done differently? Why did they not follow industry standards, if applicable?

Explanation / Answer

1) Research Paper Of Chase Bank

Introduction

JPMorgan Chase & Co. is one of the world’s oldest, largest and best-known financial institutions. Since our founding in New York in 1799, we have succeeded and grown by listening to our customers and meeting their needs. As a global financial services firm with operations in more than 50 countries, JPMorgan Chase & Co. combines two of the world’s premier financial brands: J.P.Morgan and Chase. The firm is a leader in investment banking; financial services for consumers, small business and commercial banking; financial transaction processing; asset management; and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients. JPMorgan Chase & Co. is built on the foundation of more than 1,000 predecessor institutions that have come together over the years to form today’s company. Our many well-known heritage banks include J.P.Morgan & Co., The Chase Manhattan Bank, Bank One, Manufacturers Hanover Trust Co., Chemical Bank, The First National Bank of Chicago and National Bank of Detroit, each closely tied in its time to innovations in finance and the growth of the United States and global economies

The Beginning: The Manhattan Compan

Commercial banking in the United States got its start immediately after the Revolutionary War. The earliest American banks played a central role in the nation’s economic and industrial growth by lending money, safeguarding deposits and issuing bank notes that were used as currency. The Bank of New York – founded in 1784 by Alexander Hamilton, who became George Washington’s Treasury Secretary – was the first commercial bank in New York City. It had no competition until 1799 when Hamilton’s political rival, Aaron Burr, a U.S. Senator and future vice president of the United States, founded The Bank of The Manhattan Co. JPMorgan Chase traces its beginnings to Burr’s fledgling institution.

Early Growth of Banks

As America expanded and diversified in the 1800s, new banks were formed across the nation. JPMorgan Chase has historic links to many of these early institutions, including The Western Reserve Bank, one of the first banks in Ohio when it was organized in 1812; Second State Bank of Indiana, formed in 1834 when Indianapolis still was a frontier town with a population of about 1,500; and Springfield Marine and Fire Insurance Co., which began operation in Illinois in 1851. Abraham Lincoln was one of its first customers, depositing $310. All three banks are predecessors of Bank One, which merged with JPMorgan Chase in 2004. Individual states controlled the creation of banks in the early 1800s, and several states were highly restrictive in granting charters or awarding them only to organizers who belonged to the political party in power. Demand for banking services was so great, however, that entrepreneurs sometimes found ways to get around  such prohibitions.

Origins and Influence of J.P. Morgan & Co.

JPMorgan Chase’s other namesake predecessor, J.P.Morgan & Co., was founded in New York in 1871 as Drexel, Morgan & Co. by J. Pierpont Morgan and Philadelphia banker Anthony Drexel. The new merchant banking partnership served initially as an agent for Europeans investing in the United States, ultimately raising much of the capital to support American industrial expansion. It did not take long for the Drexel-Morgan partnership to establish itself as the nation’s pre-eminent private domestic and foreign bank. The firm made its first big splash in 1879 when it sold financier William Vanderbilt’s New York Central Railroad stock without driving down the share price. The deal – involving the largest block of stock ever offered to that time – was a huge success, emphasizing Morgan’s strength as a mobilizer of capital and wholesaler of securities.

Financing Major Projects

The late 19th and early 20th centuries were an era of memorable engineering projects and revolutionary technologies, many financed with capital from heritage JPMorgan Chase institutions. The Brooklyn Trust Co. was a major lender for the construction of the Brooklyn Bridge, completed in 1883, which featured the world’s longest suspension span. William L. Strong, founder of The New York Security & Trust Co., was a member of the American finance committee that raised funds for the Statue of Liberty’s pedestal, the largest 19th century concrete structure in the United States. In 1904, J.P.Morgan & Co. helped finance the Panama Canal by raising $40 million for the U.S. government to buy land rights from the bankrupt French Panama Canal Co. The purchase, at the time, was the largest real estate transaction in history. In 1911, Union National Bank and National Bank of Commerce in Houston, predecessors of legacy institution Texas Commerce Bancshares, Inc., helped finance the construction of the 50-mile-long Houston Ship Channel, one of the largest public projects in the Southwest. These banks persuaded other Houston banks to purchase unsold municipal bonds issued to finance the channel’s construction. The Houston Ship Channel opened in 1914 to great fanfare and today is one of the busiest waterways in the United States.

Banking at the Beginning of the 20th Century

Banking at the dawn of the 20th century was different in many ways than it is today. Most states – the primary banking regulators at the turn of the century – prohibited or severely restricted branching, fearing that small banks might have trouble competing with large banks if branching were allowed. As a result, the United States was a nation of one-office banks, the vast majority of which were small institutions. In 1898, New York became one of the first states to permit branch banking on a limited scale when it allowed New York City banks to have branches anywhere in the city’s five boroughs. The Corn Exchange Bank, a predecessor of Chemical Bank, quickly capitalized on the new rules, opening a dozen branches within four years and changing its focus from providing credit to grain merchants to serving retail customers. When New York City inaugurated its subway system in 1904, the bank opened branch offices in residential areas along the subway lines to serve commuters

The Roaring ’20s

The banking industry changed dramatically in the 1920s, a decade of innovation and diversification. Many banks formed investment departments to meet customer demand for government and corporate securities. Some large banks went beyond the marketing of securities and established underwriting affiliates. Chase National Bank and Guaranty Trust Co. in New York became major players in the underwriting business – Chase in 1917 through its Chase Securities Corp. affiliate and Guaranty Trust through its Guaranty Co. affiliate, established four years later. Diversification took banks into other areas as well. In 1919, The First National Bank of Chicago created an affiliate, First National Investment Co., which invested in second mortgages and operated a travel agency The 1920s also saw a wave of bank mergers, failures and voluntary liquidations, with the result that the number of banks in the United States declined by 20% from 1921 to 1929.

The 1929 Market Crash and the Great Depression

Although the banking industry had an abundance of money to lend in the 1920s, large corporations borrowed less, choosing instead to finance a sizable portion of their capital needs in the stock and bond markets. Consequently, banks sought new lending outlets, including loans to individuals speculating in the stock market. As the stock market rose, these loans produced solid returns. But when the market crashed in October 1929, many of the loans went into default. For the banking industry, the 1930s would be the most difficult period in history. In the years after the crash, thousands of banks faced hard times because of loan losses, depositor withdrawals, inadequate reserves and, in some cases, the collapse of speculative investments made in the 1920s. Even well-capitalized, well-managed institutions were battered by the financial panics that swept across the nation.

First-Class Business

In May 1933, J.P. “Jack” Morgan, Jr., as well as several Morgan partners and other major bank executives, testified at hearings held by the Senate Committee on Banking and Currency investigating the causes of the 1929 stock market crash and the subsequent banking crisis. The hearings raised the question of the role banks played in the speculative fever leading up to the crash.

Global Banking

Globalization in the postwar period began slowly. By 1965, only 12 U.S. banks had opened branches outside the United States. These included five predecessors of JPMorgan Chase – The Chase Manhattan Bank, Chemical Bank, The First National Bank of Chicago, Manufacturers Hanover Trust Co. and Morgan Guaranty Trust Co. In addition to Chase, several other predecessors transformed themselves into global institutions. Morgan Guaranty Trust Co. became a major international player. Prior to the merger with Guaranty Trust Co., J.P.Morgan owned a one-third interest in London merchant bank Morgan Grenfell & Co. while Guaranty had maintained a London office since early 1897.

Banking Industry Consolidation

In addition to the powerful trend toward globalization, a second major postwar trend was industry consolidation through mergers, acquisitions and the formation of multi-bank holding companies. In New York City, a wave of mergers created a few big banks serving many customers through extensive branch networks. All four of JPMorgan Chase’s major New York City heritage firms – J.P.Morgan & Co., The Chase Manhattan Bank, Manufacturers Hanover Trust Co. and Chemical Bank – grew through mergers in the 1950s.

Development of Credit Cards

Although the first multi-use credit card was launched by Diners Club in 1950, credit cards did not gain widespread public acceptance until the late 1960s. Several JPMorgan Chase predecessors played key roles In 1958, The Chase Manhattan Bank introduced the Chase Manhattan Charge Plan, becoming the first New York City bank and one of the first in the nation to offer customers a single retail charge account that provided credit at a citywide network of stores.

ATMs and Debit Cards

JPMorgan Chase predecessors were instrumental in introducing automated teller machines (ATM), which revolutionized banking by allowing customers to conduct transactions from almost any ATM in the world. In 1969, Chemical Bank installed the first prototype cash-dispensing machine in America, a precursor of the ATM, becoming the first bank in the country to allow customers to withdraw cash 24 hours a day. City National Bank & Trust Co. of Columbus also embraced the new technology, installing the first production-model cash-dispensing machines in 1970. Several predecessors of JPMorgan Chase also were instrumental in forming some of the early electronic banking networks to enable customers to withdraw funds from ATMs not only at their own banks but also at competitor banks. Marine National Exchange Bank of Milwaukee helped establish TYME (Take Your Money Everywhere)

Home Banking by Computer

Several JPMorgan Chase predecessors played key roles in the development of home banking. In 1980, Bank One developed and tested one of the earliest online home banking services. Called Channel 2000, it allowed bank customers to view their bank and department store balances on a television screen, pay bills and shift money between accounts. The service worked over regular telephone lines; the Internet – which is used today for home banking – was not commercialized until 1987.

Difficult Competitive Environment

The restrictions imposed on banks by Glass-Steagall began to erode in the 1970s as competition from nonbanking institutions and the growing role of technology drove change. Innovative financial products were launched by brokers, mutual fund companies, savings banks and other providers – products that enabled customers to earn higher returns on their money and enjoy greater flexibility in managing their assets. Many of these products competed with savings accounts, checking accounts and other banking services. In this prolific environment of innovation and change, regulatory policies originally aimed at protecting banks were handicapping their ability to compete, and rate deregulation began slowly. In 1978, the Federal Reserve authorized banks to issue a new product – the six-month money market certificate with a variable rate ceiling tied to six-month Treasury bills. Nearly all of JPMorgan Chase’s predecessor banks offered the certificates.  

JPMorgan Chase & Co. Today

JPMorgan Chase & Co. is a leading global financial services firm with operations in more than 50 countries and has its corporate headquarters in New York City. Under the J.P.Morgan and Chase brands, it serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients. Its six major businesses are:

Investment Bank Retail, Financial Services, Card Services, Commercial Banking, Treasury & Securities Services, Asset Management.

The JPMorgan Chase Archives

Begun in 1975 by Chase Manhattan Bank Chairman David Rockefeller, the JPMorgan Chase Archives is one of the oldest corporate history programs in the United States. Recognized as an important corporate asset and an invaluable resource for financial history, the Archives has continually advanced the firm’s rich legacy by collecting and preserving historical materials of JPMorgan Chase & Co. and its more than 1,000 predecessor institutions worldwide. With over 7,000 feet of records, this extensive collection traces the remarkable origins, developments and achievements of the firm from 1799 to the present and documents key events and business decisions, offering valuable insight into the firm’s mission and vision.

2) Resarch Paper on Bank of america

Introduction

Bank of America Corporation (BOA) is an American multinational banking and financial services corporation founded in 1904. It is headquartered in Charlotte, North Carolina. It is a well-known company throughout the United States and the entire world. In the Forbes Global 2000 (2013), BOA ranks 28th overall, 63th in sales, 131st in profit, 11th in Assets, and 36th in market value. BOA employs approximately 267,000 people including Brian Moynihan, CEO. BOA's purpose is "to help improve the financial lives of their customers and clients" (Bank of America, 2013). They are committed to helping provide "opportunities for their customers and clients throughout their financial lives” Bank of America, 2013). Each team member brings the expertise, judgment, leadership and diversity of thought and experience required to make responsible decisions for all of their stakeholders" (Bank of America, 2013). BOA offers original banking products and services to their customers. They offer checking and savings accounts, credit cards, and home loans to customers. The financial institution is also recognized as leading company in the United States Small Businesses Administration program. They offer a myriad of financial services to small and large business alike.

COMPETITOR ANALYSIS

Bank of America is obviously a formidable competitor in the banking industry, but we wanted to dig a bit deeper to really understand what BOA is really about. We decided to compare BOA’s products and services to a couple of their biggest competitors: J.P. Morgan Chase and a local credit union, CFE Federal Credit Union. Our analysis compared the financial institutions’ entry-level checking accounts, savings accounts and credit cards. We also reviewed interest rates on 48-month car loans and 30-year mortgages. All information was obtained from the financial institution’s company website.

Consumer Attitudes about Bank of America

Bank of America has been struggling with low customer satisfaction ratings over the past few years. A December 2012 press release from the American Customer Satisfaction Index found that BOA came in last place in the financial services arena (Banks Improve). The bank earned an ACSI rating of 66, “reaching its lowest level of customer satisfaction in over a decade.” (Banks Improve, 2012). In fact,, ACSI points out that “Bank of America … stands out as the only bank that is still below its prerecession customer satisfaction level. It is clear that this is mostly because of fees” (Banks Improve, 2012). The independent review also shed light on several additional issues with Bank of America’s service. Of the 100 sampled reviews, only one review was positive. The remainder of the reviews cited poor customer service due to disrespectful or rude behavior by an employee, poor communication and/or unresolved issues. 17% of customers cited dissatisfaction due to lost funds or limited access to their money. Another 17% of BOA customers felt that their home loans, refinancing or loan modification was handled poorly.

CVATTM Analysis

In order to further understand the root of Bank of America’s customer satisfaction debacle, we applied a Customer Value Assessment tool (CVATTM) to “evaluate and improve…value delivery to their customers” (Weinstein, 2012, pg. 72). The CVATTM will evaluate perceived service quality, product quality, image and value-based price. Each statement in our evaluation was rated 1 – 4, with 1 meaning it happens all of the time, 2 meaning it happens most of the time, 3 meaning it happens some of the time, and 4 meaning it never happens.

Service

We found perceptions on service quality to be quite mixed. This was not a surprise given the fact that Bank of America has been suffering from record low customer satisfaction ratings. Consider these two varied views from customers that illustrate the challenge of providing consistent and high quality service experiences.

- Thank you for great service when I contact your branches. I’ve been a customer for several years and am very pleased with your service.

- • The process to make a transfer to another bank takes too long and the customer service in charge of making the confirmation is not efficient at all. They need to get better at following up until the transaction is completed, and if a problem comes up they need to call the client right away so the client is notified on the status of the transaction.

Quality

Perceived product quality did not seem to be as much of an issue as perceived service quality, especially to current Bank of America customers. Ten of our twelve respondents in our focus group indicated that they know exactly what they can expect from BOA and their services. The same percentage of respondents agreed that BOA is committed to getting things right the first time. Our competitor analysis indicated that BOA is relatively competitive with its biggest competitor, JP Morgan Chase, but may fall behind local credit unions have been gaining market share. Many of our focus group respondents also agreed that BOA is committed to continuous improvement. 75% of our focus group indicated that they find value in the communication that they receive from the bank. While perceived quality received good overall ratings from current customers, former customer reviews from our research indicate that quality may take a hit if customer service isn’t addressed aggressively.

Price

Fees were the number-one complaint among consumer reviews, so it’s no surprise that we found a number of issues with Bank of America regarding perceived value-based pricing. Here’s one example of a customer’s gripes with BOA regarding its pricing strategy: BOA charges for every little service, it is ridiculous. If you try reading your statements online, good luck – the statements lack detail. While they have competitive rates with credit card transactions, everything else is outrageous. They charge for checking accounts and every transaction.

RECOMMENDATIONS: Perceived Service Quality Recommendations

According to Forbes Magazine, customer service is the new marketing (Mickiewicz, 2011). Our CVATTM analysis indicated that Bank of America is seriously struggling with providing exceptional customer service. We are recommending that BOA conduct a complete overhaul of their customer service program in order to get back on track. The following are some things that BOA can implement to ensure they are providing exceptional customer service.  

1) Listen to the customer. Like many large companies, Bank of America conducts customer satisfaction surveys and ways to comment and complain if they have something to say. But, our research found that there were far too many unsatisfied customers. BOA should make a greater effort to listen to their customers and make changes to their services according to what their customers need.

2) Improve communication about products and services. A lot of information about Bank of America’s products and services are included in the fine-print. This makes for confused and upset customers who don’t understand BOA’s fee structure. Improving communication outside of the fine print could result in fewer complaints about fees due to misunderstanding

3) ) Make complete customer satisfaction a top priority. One of the most important things that Bank of America can do to accomplish this is to make sure they hire the right people. The right people understand how to effectively deal with customers. Employees hired must be patient and know how to treat others in a respectful way

Perceived Product Quality Recommendations

1) Strive to give customers more than they expect. Delight them. Give them a reason to stay with Bank of America. 2) Instill an attitude of quality control in employees. If quality is a priority, fewer mistakes will be made, and customers can learn to trust and expect quality from Bank of America. 3) Strive to provide products that are better than the competitors. If Bank of America gives their customers just a little bit more than the competition (Chase Bank seems to be doing this really well), they will find it harder to find a reason to leave.

Perceived Value-Based Price Recommendations

1) Do a better job of staying competitive. Bank of America should make sure that they have a slight edge over their major competitors. 2) Make “green services” cheaper and continue to improve them. Many young people are using, and prefer, online and mobile banking services and opting in to electronic statements. BOA should offer these services at a discounted rate. 3) Work to improve overall quality and service. Bank of America is losing businesses to credit unions that are doing a better job with service and rates. 4) Better educate the customers regarding fees, so they know what to expect. Let’s face it: customers don’t read the fine print. So, when they’re charged a fee that they don’t understand, they don’t feel that Bank of America is meeting their expectations.

CONCLUDING REMARK

We feel that if Bank of America incorporates our recommendations for service, product, image and price into their business model, they will not only be able to improve their poor customer satisfaction scores, but they will be able to become more successful in their overall business.

END-OF-CASE QUESTIONS

1) If you were the CMO of Bank of America, how would you react after reading this report? What immediate steps should you take to improve service quality and BOA’s customer value proposition? 2) The subtitle of this case study is “Good is Just Not Good Enough.” What is your interpretation of this phrase in the context of the Bank of America scenario presented? 3. Based on this analysis, identify some research needs/follow-up studies that deserve attention. How can BOA use their CRM system more effectively to gather customer data and make better marketing decisions? 4) Customer service is a major problem area for BOA. How can they use SERVQUAL and gap analysis to enhance service quality? 5) Review the set of proposed recommendations. Based on this list, identify three priorities to pursue. Explain why these issues are so critical in developing a sound customer value strategy. Offer a fourth initiative that has not been identified. Why is this an important area for marketing management to address?

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