BIZ202: Environmental Scan Report on National Australia Bank (NAB)

This report provides an environmental scan of the National Australia Bank (NAB), analyzing the impact of external factors on its operations. It examines policy changes, government regulations, and macroeconomic indicators, identifying challenges and proposing solutions. The report delves into the macroeconomic framework, including fiscal, financial stability, and monetary policies, to help NAB mitigate risks and improve its performance. The analysis covers various factors such as inflation rates, GDP, and customer behavior, offering insights into how these elements affect the bank's operations. The conclusion summarizes the key findings and emphasizes the importance of understanding and adapting to the business environment for continued success. The report also includes references to support the analysis.

Business Environment
7/28/2018
National Australia Bank

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Contents
Introduction......................................................................................................................................2
Overview of company..................................................................................................................2
Background information..................................................................................................................3
Solution of challenges faced by NAB.............................................................................................3
Policy changes.............................................................................................................................3
Solutions: -...............................................................................................................................3
Changes in government regulations.............................................................................................4
Solutions: -...............................................................................................................................4
Changes in national and global macroeconomic indicators........................................................4
Solutions: -...............................................................................................................................5
Macroeconomic framework.............................................................................................................5
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Business Environment 2
Introduction
This is an environment scan report which is formed with the motive to propose the solutions
related to the risk that the company has from the factors. This report is based on the assignment
A which shows the factors that affect the National Australian bank. The previous assignment
reflects the impact of factors on the company which affected the working in the market of
Indonesia. This report will reflect the solutions to the problems so that the company can easily
perform their business operations.
Overview of company
National Australia Bank (NAB) is one of the four largest financial institutions that are operating
their business in Australia in terms of capitalisation, earnings and customers. The company is a
leader in offering the banking services to the businesses that are present in Australia with the
specialist expertise in health, government, agricultural and other fields (National Australia Bank,
2018). The vision of the banks is to be Australia and New Zealand’s most respected bank.

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Background information
In the Australian market, the company conducted the external market analysis in which they
analysed the factors that affect the working of NAB. These external factors are related to the
macroeconomic such as policy changes, changes in the regulations by the government and the
changes in global macroeconomic and national indicators. The company need to find the
appropriate solution with the help of which they can deal with the major influence of factors.
Solution of challenges faced by NAB
This section of the report includes the solution of challenges that are faced by NAB. The solution
and the detail description of the factors that affect are given below: -
Policy changes
National Australia bank faced the changes in policy and one of the recent policy change ordered
by the Australian securities and investment commissions is related to foreign exchange.
According to this policy, the banks need to adopt a particular program that can prevent, detect
and respond to different types of misconduct related to FX. This might affect the bank as they
will lose their customers.
Solutions: -
 Generate awareness: - It is suggested to the bank to generate the awareness among the
customers related to the new system and their benefits. This awareness can be generated
by setting a camp, templates or by doing the verbal communication.

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 Additional benefits: - NBA should offer the certain sort of benefits to the customers
when they retain and accept the new system that the banks will update. These benefits
can be a rise in the interest rate or a decrease in the loan interest rate.
Changes in government regulations
NBA faces the positive and negative influence due to the changes in the regulations of
government. NBA found that they need to cope with the regulation introduced by the
government related to the capital and liquidity state (Bonner, 2016). This made the banks to
bring the new system in which they introduced the proper liquidity standards. Though, the banks
might face the issues when they won’t be able to provide the amount when it will be demanded
by the customers.
Solutions: -
 The accuracy of the standard: - It is suggested to the bank to review the standard and
then set it again after considering the needs of customers on the regular or frequent basis
(Dyster & Meredith, 2012).
 Loans from the central bank: - NBA bank can take the loans from the reserve bank of
Australia for the short duration when they found the issues in managing the need for
capital.
Changes in national and global macroeconomic indicators
NBA bank gets affected due to the change in the macroeconomic factors which include GDP of
the country, purchasing power, CPI (Customer price index), inflation rate and many others
(Goodwin, Harris, Nelson, Roach & Torras, 2015). Currently, the NBA is making use of the
inflation rates with the help of which they can easily forecast the customer saving or deposits

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with them. The deposits can affect the working of the banking institutions in the Australian
market (Market insights, 2017). In addition, the incorrect forecast can also lead to the impact on
the company.
Solutions: -
 Use of the strategies to control the inflation: - The central bank of the country should
make use of the strategies with the help of which they can control or decrease the
inflation. These strategies are exchange-rate pegging, monetary targeting and with the
inflation targeting (Mishkin, 2018).
 Expert advice: - In the banking institution, the prediction of the amount is required to be
done by taking the advice of the expert who can actually tell the accurate amount.
This is found that the company can face the numerous other issues according to the change in the
working environment of the company. The major factors that can affect the company are
macroeconomic factors. According to this, it is suggested to the company to make use of the
framework with the help of which they can easily reduce the impact of macroeconomic factors.
Macroeconomic framework
The macroeconomic framework includes the three approaches that can help the NAB to reduce
or overcome the impact of the external environment. These approached are fiscal policy,
financial stability and the monetary policy.

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(Source: Fiscal Commission Working Group, 2013)
Monetary policy: - This policy will talk about the choice of currency and the exchange rate
regime. This policy of economy ensures that there is stable and manageable inflation because
these two elements play a vital role for banks. Along with this, the monetary policy of Australia
helps in smoothing the economic cycle (Fiscal Commission Working Group, 2013).
Financial stability: - This is the fact that the macroeconomic policy is the financial stability and
this approach helps in forming the sustainable economic growth within the country. National
Australia bank will get the benefit of the stability as it will not bring any changes in their
processes or functions.
Fiscal Policy: - In the macroeconomic, the fiscal policy approach helps the banks in reducing the
impact that is related to the tax system and on the spending of people. The spending of people is

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essential to identify for banks because the amount which is saved by the people is deposited by
them in banks accounts (Fiscal Commission Working Group, 2013).
The above-discussed approaches help the banks in performing the business effectively because
this approach improves the environment in which the operations are performed. National
Australia bank will get the details related to the consumer behaviour, stability in the inflation
rate, stability in the macroeconomic indicators and many others.

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Conclusion
In the end, it can be concluded that national Australia bank faces numerous issues while
performing the business activities in the market of Australia. The major issues are faced by the
company due to the change in the policy or regulation and the macroeconomic factors. The
solutions related to these issues are shared so that bank can process their working like earlier.
Along with this, the macroeconomic framework has been explained that helps the company in
improving their operations.

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References
Bonner, C. (2016). Preferential regulatory treatment and banks' demand for government
bonds. Journal of Money, Credit and Banking, 48(6), 1195-1221.
Dyster, B., & Meredith, D. (2012). Australia in the global economy: continuity and change.
England: Cambridge University Press.
Fiscal Commission Working Group. (2013). 5: Macroeconomic Frameworks - Design and
Principles. Retrieved from: https://www.gov.scot/Publications/2013/02/3017/8
Goodwin, N., Harris, J. M., Nelson, J. A., Roach, B., & Torras, M. (2015). Macroeconomics in
context. New York: Routledge.
Market insights. (2017). Top economic indicators for the Australian economy. Retrieved from
Market insights: https://www.fxcm.com/insights/top-economic-indicators-for-the-
australian-economy/
Mishkin, F.S. (2018). Strategies for Controlling Inflation. Retrieved from:
https://www.rba.gov.au/publications/confs/1997/mishkin.html
National Australia Bank. (2018). About National Australia Bank. Retrieved from:
https://www.nationalaustraliabank.com/nabglobal/en/about-nab

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