Case Study: E-commerce Implementation at AMEX

With the stages that surpassed by decades, establishing strategic banking institutions in worldwide markets suggest to measures how one particular development driven shaping of economic advantages. Taking into account the technological and sociological growth after the Great Depression, banking institutions has readily broadened and expanded policy agenda to cope up with the projected progress and acceptance of the socio-tech factors. According to the report released by Federal Deposit Insurance Corporation (FDIC) from the year 1980 to 2002, banking institutions were changing its numbers as the years went over.


AMEX had effectively studied their client base and applied it in consideration to the new IT system. Hence they offered demo versions on their bank websites. The said demo comprises of four aspects that enhance client interaction. This way the bank can incorporate suggested improvements from the clients to develop new services or enhance the old ones. Another thing, AMEX had also provided online banking services such as (1) account inquiry (2) information validation or updating (3) online viewing of statement accounts (4) tracking of their transactions (5) electronic mails (6) requests for issuing of check books (7) fund transfers (8) report of lost cards (9) opening of fixed deposits for their accounts and (10) other services such as electronic payments. Because of this, they saw that they further strengthen their relations with other banks. This way they can have third party payments, bill payments and other cash management services.

AMEX used e-commerce as a client informational tool that would provide them basic contact, electronic brochures, and special events. It also provided intermediate information through the search engines, report download, and economic information. It also allowed advanced marketing tools such as internet subscriptions, interface customization and advertisements. Also, e-commerce had been a transactional tool as it was used in opening accounts, checkbook requests, and card requests. It also provided balance inquiry, bill payments, and fund transfers transactions for the clients. Additionally, it offered clients with electronic cash, electronic signature, and electronic checks. Further, e-commerce had provided for enhancing AMEX customer relationship management through IT tools such as electronic mail, suggestions, and complaint forms, and feedback forms, advising tools, what-if calculations, and calculators. It also provided the company technological devices such as video conferences and service developments that helped manage internal organization communication.

E-commerce Benefits for AMEX

AMEX recognized that internet banking and financial applications can provide banks with a way to reduce costs, increase revenue and better service to their customers. As indicated above, many banks feel the need of internet banking functionality just to stay competitive and retain profitable customers. In the haste to compete, some banks do not take the time to consider how the internet will be integrated into their marketing, distribution and technology strategies. This often leads to less cost saving and fewer revenue enhancement opportunities.

AMEX before the advent of internet technology, the above-mentioned transactions were done manually and it took a lot of time and effort to perform those tasks. But, now, the introduction of internet banking has made these transactions easily accessible in less time. Moreover, Internet banks such as AMEX that was listed in 10th Federal Reserve District had incurred higher expenses. However, it also created astronomical charge returns. Also, it had concluded that the procedures of productivity for online banking that are similar to those of the non-Internet banks.  Studies found that banks that utilize the internet outperformed those that do not in terms of profitability. Moreover, according to their study, those banks from all sizes that offered internet banking had a tendency to less on the interest that comes from the banking transactions that non-Internet banks do.

E-Commerce’ Threats & Limitations

However, there are still management problems facing information systems applied in the credit card industry, which needs to be addressed thoroughly before MIS could bring aforementioned benefits to the organization. Said  management problems were enumerated: (1) changes in the environment which consists of monetary deregulation (for instance the interest rates, branch office allocations, among others), dealings connecting securities, trust and insurance firms, internationalization (installation of worldwide system, utilization of international cash management system, use of international cards, amongst others.), access from other commerce along with improvement of clearing methods; (2) arrangements for viable benefits that comprised of growth of banks’ high-technology financial products, upgrading of maturity sway to latest banking products, extension of distribution avenues, expansion of electronic banking, ATM policies as well as banking model patent; (3) innovative IT tools that embraced use of the Internet, mobile phone, e-money, use of broadband and numerous forms of new media; (4) premeditated support system to all the branches – from the head office down to the rural offices with regards to their management of cost and asset; (5) enhancement of customer service that take in 24/7 services, conferring with to asset management, credit cards plus digital certification; (6) management of banking risks particularly online; (7) attention to detail of their business validation and/or centralization of company operations, cut-rate business, the use of image processing, digital filing and multimedia; and (8) practical amendment of departmental units within the company, guidelines for on- and off-the-job training o, outsourcing, and collaboration with manufacturers as well as IT software providers.

Moreover, the risks and competition in business is just a natural phenomenon, relatively like of earthquakes, typhoons and the likes which challenge strengths hold by industry. In 1999, Gramm-Leach-Bliley Act was approved in U.S. Congress having the power of expanding the increasing competition and emerging activities of the banking industries that was first initiated by Reigle-Neal Act. The two laws had actively made capitalization institutionalized countries to adopt the banking industries, for these have made approaches to grasp areas that could expand automatic charging. The way how resident banks of countries such as putting much interest rate among their services are then lessened or equaled to what the non-resident banks offered.

Additionally, what makes virtual banking economical in compared with brick-and-mortar bank is due to its limitation, geographical limitations. Technology has shifted the overall competitive landscape opportunities to small, medium and big time enterprises that yearn to connect with the established structure and operations of banking institutions particularly those multiregional banks that have proven regulatory action, competitive products and services as well as year of tenure in banking markets


Technology is e-commerce’s powerhouse. Without it, the new possibilities and developments within the business frontiers cannot be unraveled and explored. It will remain stagnant and its utmost potentials could not be utilized. The growing interest of people with the internet shows that there is a future of a much faster information superhighway.

This is evidence that suggests that financial institutions are trying to find and slowly moving out of plain branch banking. They instead turn into multi-channel banking that principally provides internet banking. This would then gain cost benefits at the same time it would enhance their customer handling. Internet banking has also helped in establishing a link between various banks and the other prestigious banks worldwide. The internet banking undoubtedly has provided   a lot of convenience to the customers and has revolutionized the banking industry in the country. The above trends indicate a significant increase in the use of online banking in the country.

In reference to the data analysis above on AMEX and their application of E-commerce, it can be assumed that the company had efficiently extended an internet banking approach that embraced internet goals for the corporation as a whole. They had also produced internet products that the business arranged to present. They had also fully used the technologies and architecture the corporation intends to buttress. They had also committed procedural, trade and business resources principally to online activities. Also, they were able to formalize processes for internet development, operations, and maintenance. In addition, they had specified processes for both major website upgrades and smaller updates and provided high-quality service to internet users. They had also used the click and mortar model, as they had effectively combined online delivery with other agencies above all the customary physical branch network. The existing analysis of AMEX is that Internet banking can simply thrive given that it is methodically incorporated inside the existing infrastructure, which should combine click and mortar. Under this view, the Internet is considered as another distribution channel, complementing the physical branch, phone banking, and ATM networks. This had been effective due to the fact that AMEX is a market leader in their traditional business and thus can capitalize on a very sizeable customer base. Furthermore, this customer base is technologically sophisticated.  Also, AMEX has tightly integrated Internet in their operations and their infrastructure. The company had desired to “virtualize the bank” by offering through the Internet all products and services found in other channels. They also highlighted the intricacy of relationships between Internet securities and Internet banking.

Suffice it to say, the role information technology plays in the success of banking is well documented. Yet, the acceptance of internet banking service has been mixed.


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