Information System Strategy in National Australia Bank

This report describes the evolution of Information System strategy and its role in the contemporary environment. It discusses the advantages of IS within the organization and the need for its implementation. The report focuses on the use of Chatbots as an IS strategy in National Australia Bank.

Running head: INFORMATION SYSTEM STRATEGY IN NATIONAL AUSTRALIA
BANK
Information System Strategy in National Australia Bank
Name of the Student
Name of the University
Authors note

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INFORMATION SYSTEM STRATEGY IN NATIONAL AUSTRALIA BANK
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
Evolution of Information System strategy.............................................................................3
Major challenges facing business...........................................................................................4
Recent scenario of Information System for organization......................................................5
Role of Information System in contemporary environment..................................................6
Management Information System for control and management............................................7
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The purpose of this report is to describe the evolution of Information System strategy
and its role in the contemporary environment. The paper succinctly gives the advantages of
IS within the organization. The need of implementation of such technologies is discussed.
The selected Australian Company is The National Australia Bank Limited (NAB) which uses
Chatbots as an IS strategy. The National Australia Bank Limited (NAB) is placed at 21st
position in the list of world’s largest bank in the marketplace. Situated in Melbourne, it serves
key areas including Australia, New Zealand and Asia. It was established in 1982. It is a
public company which provides numerous services to the Australian public (Nardella 2018).
It includes range of customized services such as business banking, wholesale banking,
financial services and personal banking. The business banking gives commercial banking
options to business managers and customers and the personal banking provides retail services
to small business and customers. The bank promises to offer the right thing to the people and
community which will motivate the customers to trust and respect them. The other segments
of NAB includes consumer banking, wealth management and Institutional banking. The
majority of profits that the company generates comes from the commercial and national
banks in Australia. Recently the company has experienced total sum if revenue of
$34,139,000,000 (Ask et al. 2016). It consist of more than 33283 employees. There are total
1590 branches as well as service centers and 4412 ATMs that is operated which aims to serve
more than 12.7 million people of Australia, Asia and New Zealand.
Chatbots is a program designed to stimulate interactive conversation with human
either through text or voice control program. It is an automated software that performs
effective interactions over live chats to resolve any human query (Hansson 2018). Any
human being cannot be available 24/7, therefore Chatbots fulfills this gap by providing day to

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night functionality. This technology is derived from the concept of Artificial Intelligence that
gives better result than human in terms of better accuracy and greater speed. Chatbots has the
potential to replace humans and perform all their tasks within an organization (Park, Aiken
and Salvador 2018). Chatbots can also be considered as virtual assistance which aims to
reduce the payment cost that has to be given to human staff. It also saves times by providing
quick responses and helps improvising excellent customer service when the human staffs are
unavailable. Chatbots can be used in varied situations such as automatic message generations,
marketing applications, tele marketing, customer service and intelligent assistant such as
Alexa in Amazon and Siri in Apple. Chatbots is a onetime investment software that
eliminates the use of paying the assigned agent by the organization. Hence, it is a cost
effective technique. It uses machine learning and artificial intelligence technique with
specialized programming code (Galitsky and Goldberg 2019). Chatbots are programmed
robots that respond and behaves exactly like humans. This Information System strategy
definitely benefits any business enterprise whether small or large. It helps the business to
minimize the overhead and enhance customer engagement. There are three important
categories of Chatbots. Support Chatbots, Skill Chatbots and Assistant Chatbots.
Discussion
Evolution of Information System strategy
Information System has been a vital component of an organization. For the past
twenty years it has been evolved with the development of information technology. The
organization and information technology is interconnected with each other in an integrated
manner. The impact of computers in organization has proved to be positively impact the
while organization. The first business IS was launched in 1950 which performed highly
complex and repetitive task (Michiels 2017). The system was named Transaction Processing

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System (TPS). The management Information System were used to organize, access and
perform decision making process in the important areas. IS is not only a database but also a
tool that allows to strategically manage the organizational process digitally. It helps in
effective communication and making better decisions. It adds meaningful support to the
business organization. The growth of the IS system was rapid and progressive over the past
50 years. New technologies are continuously emerging and proving to be positive and healthy
in the field of marketing and business (Sahin, Relieu and Francillon 2017). After the
successful implementation of TPS, the IS group created Management Information System
(MIS) which was used to process data into useful reports. It helped the managers to get
important information that they needed in order to perform decision making for the company.
The role of MIS was to provide three basic functionality: summary, exception and detailed. It
performs everything that the TPS did. The second period led to the development of personal
computers. It helped the organization to gain power by using their own interactive system as
a tool for communication with the customers. The introduction of Decision support System
(DSS) helped the business professionals to operation and plan with higher authenticity. In the
third period, Executive Information System was introduced in the market which was an
advancement of DSS. The evolution of the TCP/IP network also began to spread in the IT
industry. In 2000, Artificial intelligence was invented which made a drastic shift of IS in the
business (Duijst 2017). This made the elimination of manual work and addition of more
automated work. This made less need of human which enhances the speed and time
management of the business processes. Therefore in the present era (above 2001), the rapid
increase in the use of internet intranets and the global networks made the business enterprises
more integrated than ever before. Therefore, the evolution of IS has reformed the business
today and the organization has been benefited to a great extent. With the changing

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technology, the business must also stay tuned in order to sustain the competitors in the
marketplace.
Major challenges facing business
The 21st century uses more advanced information technology that has become an
important part of every people’s life. It has served as a tool that has positively impacted the
business as well as social and economic communities. One of the major challenge that the
business organization fails is the lack of IT implementation strategy. The NAB has
experienced challenges that has affected the revenue of the company (Raj 2019). It lacked
efficient communication with their customers. Due to the absence of IS tool, the business
process used obsolete methods which made them loose potential customers. The NAB lacked
consistency and was unable to meet the customer’s requirement. They constantly failed to
implement decision making process. They struggled in answering the queries of their
customers. They had no idea about the query and did not knew what to answer. Not only the
orgainziation faced issues but customers also had to wait on the long queues to fire their
complaints. Whenever a customer faces any problem, he tends to contact to that number of
the company that is provided on its website. But researchers has confirmed that 90 per cent of
calls remains unanswered due to lack of human assistance at that particular time (Götzer
2018). This was the main reason that made the NAB lost those customers who becomes
angry and frustrated due to lack of good customer service. Customers are the only source of
greater revenue. Hence, an Information System strategy was needed to be implemented in
order to resolve the issues which was faced by NAB organization. This made the Australian
government agreed that NAB really needs a Chatbot.

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Recent scenario of Information System for organization
With the emergence of better technologies, the recent scenario of the organization has
improved from the past 50 years. The NAB has been the first bank in Australia who has
introduced a virtual banker for the customers. It mostly benefits the business customers
which helps them to experience fast and instant replies from the banker. The service is
opened 24/7 which helps in saving critical time of the customers. The bank has confirmed
that it has passed the testing phase and soon will be executed. These kinds of technologies
has cut the additional cost of the organization to a greater extent. Chatbots are making its
impact in every kind of industry. The chairman of NAB said that it has been the richest
innovation for the customers as they have got chance to interact with the bank through digital
bankers. As the lives today are busy enough to wait, therefore it had made the customers
more engaged with the bankers. The people today are preferring the use of Chatbots to get
simple questions answered (Khan and Das 2018). The chairman also believed that Australia
is progressing their way towards cashless society as the customers are enjoying more the
online transactions and everything done through internet. The NAB has delivered this
seamless experience which has helped them to simplify and automate the processes of
banking. It has hired IT experts from different departments such as data scientists, Artificial
intelligence and automation. To reconstruct its workplace, NAB is spending up to $500 to
$800. The digital assistance also provides tutorial videos for the customers that helps them
understand how to work with it. If any query is not solved by the bot, it immediately connects
the line with the human banker (Nordheim 2018). Though NAB is not the first bank who is
implementing Chatbots but it has been the first organization to use in banking. This has made
it dominant over all the Australian Bank’s businesses. Introduction of such technology in
banks has definitely made a man step towards and be prepared for the digital age.

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Role of Information System in contemporary environment
The role of IS/IT has become a significant part of every business strategy. The
implementation of IS is a unique method to increase the profit of any business. The
advancement of IS will keep on increasing by providing new techniques to handle any
problem within an organization. The use of IS has made crucial data processing methods and
decision making process easier. These technologies can boost the company’s performance by
enhancing the productivity. Both The internal and external entity of a company can have
benefit from the IS technology (Askoul, Khan and Lalitha 2016). This also saved the valuable
time of the company by making it cost effective. These technology uses complex algorithms
which helps in eliminating human errors. Even the employees can access huge amount of
data in a single platform. The technologies such as Enterprise Resource Planning (ERP),
Odoo has helped the organization to transform digitally.
Hence the role and benefits of IS can be summarized AS:
 Data Security: with the help of proper IS strategy, the business can improve the safety
and security of their data and files. The set of rules and regulations will create a
standards method for the data flow in the organization.
 Faster access to Business Intelligence: IS makes the critical data of the organization to
be accessible to all the authenticated users of the organization.
 Improved decision making: with the implementation of IS within an organization will
help the business leaders to take good decisions which will impact the profitability of
the company (Recker 2016). A well planned strategy can make data sharing process at
much ease.
 Risk management and reduced cost: with effective IS strategy, the business leaders
will have the ability to manage the risks that are pertaining in their organization. The

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efficient utilization of IS strategy will mitigate any risk and will further minimize the
probability of risk occurrence.
Management Information System for control and management
Management Information System (MIS) is an information system software that
performs all the crucial operations of the organization (Majchrzak, Markus and Wareham
2016). It serves as a backbone for any organization. It consists of a database that records and
gathers data and helps in decision making. The term MIS is a mainly used for three resources:
information technology, people and inside and outside an organization. MIS is also termed as
information technology management (IT management) or information services (IS). Every
business organization uses MIS that helps them to accommodate with massive data and
information. This tool helps to perform and manage data, operation and processes (Laudon,
and Laudon 2016). The main function of MIS is decision making. It provides beneficial
reports that helps the business to make right decisions for the company. It gives accurate data
that includes financials, inventory, marketing, raw materials and manufacturing. It provides
the managers the whole collection of data buy storing it and making it accessible only to
them. Though the implementation of MIS is a bit expensive but it will help the organization
to produce effective results that will eventually enhance the productivity of the business
enterprise (Falkenberg et al. 2016). It keeps track of all the transactions performed and offers
communication to both inside and outside the organization.
MIS is an important component for business as it satisfies the diverse needs of the
customer by system analysis and decision making. It helps the organization to plan
strategically and control and manage different areas of it.it has several functionalities that
accelerates the production of the organization (Marnewick 2017). MIS facilitates the
mantainence and management of high and complex business data. It uses variety of

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mathematical tools that helps in analysis. It helps the organization to set potential goals with
help of production reports. It also identifies any problem within an organization. It finds any
issue in the company and provides help to eliminate those issues. With proper MIS support,
the manger will be informed about any issue prior to its occurrence. It also updates the
mangers about the progress of the business and its achievements. It helps the mangers to
perform all the task with the help of computers which made it almost impossible to do
manually (Smith and Wong 2016). The growth of enterprise is directly proportional with the
use of MIS technologies. MIS not only helps in decision making but it also helps in
optimizing the business strategy. It will review the customer’s perspective and will help them
to explore the market in better way. MIS is eligible to manage and control all the aspects of
business. It continuously monitors the performance and activities of different departments
(Cassidy 2016.). Hence MIS can be used to: analyze business trends, mange business data,
informing decisions and examines important strategies and scenarios.
The advantages of MIS over the organization can be summarized as follows:
 Quick data processing
 Provides data security
 Improves accuracy
 Minimizes data duplication
 Provides backups
 Easily access information
 Increased system efficiency
Execution of Information System Strategy
The NAB has introduced an Information System Strategy that has helped to aid the
problems of the customers. The Chabot is the new service that works as a virtual assistant and

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has converted the NAB to a digital virtual bank (Cassidy 2016). The service aims to resolve
the queries of the customers regarding bank accounts, loans, debit cards and credit cards. It is
executed to make east communication with the customers. The NAB used online assistant
that gave them 94% accuracy and increase in sale. Using Chatbots has proved to satisfy the
customers and help the customers by supporting them with additional assistance. The virtual
assistance assisted the customers to make complex decision with good understanding. The
Chabot that is execute in NAB looks like an ordinary application. It is comprised of an
application layer, API and database. The application is fed with conversation logs which
helps the Chatbots to understand what will be correct answer of the customer (Keshtegar and
Vakili 2018). The pattern matching that is structured in the form of AIML that helps them to
respond to the customer. It also uses a set of algorithms that matches with the help of an
equation. The artificial neural networks is required to calculate the input from the customer.
It uses connections that is calculated from the training data. Then every sentence is broken
into segments of words which is provided as input to the neural networks. Calculations are
done through iterations. The various variations occurring the pattern matching code,
algorithms and neural networks are studied and then classified. The Natural Language
Understanding (NLU) which represents entity as a payment system (Novikova 2015). Intents
allows the Chatbots to trigger response for the customer. Chatbots uses database known as
MongoDB to perform data analytics and also improves the performance of Chatbots by
applying machine learning. The customer has now got a chance to chat with the banker online
sitting at their respective rooms. The Chatbots can be accessed through laptops, smartphones
and Iphones. In the month of May, NAB has launched a new Robochat service for UBanks. It
is built with artificial intelligence technology which can answer more than one thousand
questions of customers in real time. The Chatbots creates a hierarchal structure that makes
suitable response. The number of occurrence of each word is counted and is given a particular

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score (Tyler 2016). The sentence that has the highest score is used as the input and the bot
responses that particular sentence that is fitted into its system.
Conclusion
It can be concluded that IS strategy is an important part of business strategy that helps
in enhancing the growth and productivity of the business. The role of MIS is significant in
business. With the growing digitization, more updated technologies is needed to be used in
order to maintain the market position of the organization. The utilization of IS strategy within
an enterprise has helped in greater coordination between different departments. Its ability to
figure out any potential problem has helped those business to avoid any mistake and enhance
its performance. Therefore, the implementation of an excellent technique known as Chatbots
has helped the NAB to generate greater revenue than before. Chatbots can be seen as initial
step of advancement into the banking industry. It has become a primary step to introduce a
concept of artificial intelligence inside the bank industry. Gradually, this idea has been
undertaken by several other banks. Australia is also planning to launch more AI technologies
in the banking sector. As the Chatbots are much more flexible and responsive than human
assistance it will be slowly executed by all the banks worldwide.

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