Rbc Case Analysis Tahir Sheikh 31x61

Tahir Sheikh ITM 707 RBC Mobile Wallet Ryerson University

Issues: RBC is currently facing a dilemma. They have a choice of two paths to pursue. RBC can either go ahead with the current industry standard; a SIM card solution which stores information on the chip which is ed by most telecom companies or to center their attention towards a cloud-based solution. Analysis: As a strategy to attract the maximum number of customers, banks typically offer similar service rates as their competitors. Banks also try to differentiate themselves by offering unique services to clients. This strategy would fall under the differentiation category as the first bank operates mobile wallet, aimed to draw customers from competing banks to switch over to RBC. Being the first mover in the industry gives RBC a competitive advantage. Since smart phones have now become a common commodity in present day society, using them to make mobile payments could have a great on traditional payment systems. Furthermore, Customers being able to switch from bank to bank in most cases, consumers would intuitively be considered to have medium-high consumer power. In of making a payment using a mobile device, the chip-based and cloud-based solutions have some similarities. However, both also have the own distinctive strengths and weaknesses. The chip-based solution is financially demanding throughout the life of the operation. Banks have to constantly compete for limited chip storage space and also compensate telecom companies for renting storage on the SIM. The advantage of the chip-based solution is the tokenization system which allows customers to perform transactions without delay by tapping their phone leading to greater customer satisfaction. Moreover, RBC would be the first bank to offer a mobile payment service because of faster execution of a chip-based solution.

In contrast, the cloud-based solution will take more time to develop as it is an application developed in-house. It requires a bigger initial investment but will pay off in the not-too-distant future because contracts with telecom companies will not be necessary. This solution is also more secure as it is stored on a private cloud and does not give telecom companies unlimited access to consumer data. Recommendation: In the short run, the chip-based solution is ideal as it gives RBC a competitive advantage as it will enter the mobile payment market before any other bank. This business strategy is in alignment with organizational strategy which is essential for any business to stay afloat in today’s market. Thinking long term, the cloud-based solution carries more benefits. RBC will save on cost for renting limited amounts of space on SIMs and confidential data will only be available to RBC. This data can also be used in the future to predict consumer behaviour to target different segments of the market. For example, different cohorts have diverse preferences. If mobile wallet s are dominantly of a younger cohort, RBC may be able to offer students special offers such as cashback each time they use their mobile wallet. The best solution for RBC would be one that is hybrid. The IT infrastructure already exists with SIMs being used by mobile devices and data would be secure with a cloud solution. Another option exists, which would be to create a debit/credit card that has a chip with the capability of communicating with servers to makes payments with a tap.