na_session 26 - channel banking
Post on 02-Apr-2018
225 Views
Preview:
TRANSCRIPT
-
7/27/2019 NA_Session 26 - Channel Banking
1/58
-
7/27/2019 NA_Session 26 - Channel Banking
2/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Channels of future planned by Banks
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
3/58
In past,Regulatory restrictions helped keep
competition at bayProximity to potential customers was the
key competitive advantageCustomers were satisfied with onebranch and restrictive timings
Easy comparison of products & serviceswas not possible
Market Realities
-
7/27/2019 NA_Session 26 - Channel Banking
4/58
Todays Customer
Anywhere Anytime Anyway customer convenience-Online banking-24/7 service-8 to 8 branch service
-365 days branch serviceInstant comparison of products and servicesReduced Turn Around TimeEnriched interactivity through customized services
Better Informed
-
7/27/2019 NA_Session 26 - Channel Banking
5/58
Banks
RedefineTraditional conceptsRole of the branchBusiness processes
Wider and more focused market reachReduced distribution costsCross Sell
Leverage customer databaseCustomer acquisition / retention
Credit screening and data mining
-
7/27/2019 NA_Session 26 - Channel Banking
6/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Channels of future planned by Banks
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
7/58
Reach out to new customers
Reach out to remote geographies
Improve existing offerings by providing
faster processing through cost effective
solutions
Deliver new products
Data collection and mining
Developmentof AlternateChannels isImportant to
-
7/27/2019 NA_Session 26 - Channel Banking
8/58
Branch
Network
m-Banking
ATMNetwork
InternetBank
Call centre
Multi-channel delivery model
Agent
Network
-
7/27/2019 NA_Session 26 - Channel Banking
9/58
Central & RegionalProcessing Hubs
Larger depositmarket sharewith fewerbranches
Freeing branchresources forcross-selling andnon-routineservicing
Bank Branch
-
7/27/2019 NA_Session 26 - Channel Banking
10/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Channels of future planned by Banks
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
11/58
Stand Alone ATMs made their appearance in India ,in1990s.
ATMs are primarily use for performing some of the
banking functions such as withdrawal of cash or the deposit
of cash/cheque, etc. by using a Debit Card. The customer provided with an Debit card with a unique
personal identification number (PIN). The PIN has to be
kept secret by the customer, to prevent any misuse or
fraudulent in the event of loss of the card.
-
7/27/2019 NA_Session 26 - Channel Banking
12/58
To the Customer-
24 * 7 access availability. Less time for transactions. Privacy in transaction. Any branch/anywhere banking enabled. Acceptability of cards across multiple bank ATM. Other services like clearing cheques deposits, Balance enquiry, cheque book requisition, details of recenttransaction.
To the Bank- Cost of setting up an ATM is lower than a setting up a branch. Migration of the routine transactions to the ATMs frees thebank staff for more productive work.
-
7/27/2019 NA_Session 26 - Channel Banking
13/58
ATMs serve as the crucial touch point for cross selling of the banks
products. Enables the bank to display products on the screen and serves as a
media for publicity for the bank.
Less hassle in handling cash.
ATM Models in India-
Offline:- When ATM is not connected to bank database, it is stated tobe offline.
Online:- When an ATM is connected to bank database, it is stated to
be online.
Stand Alone:- when ATM is not connected to any ATM network, it is
said to be stand alone. Networked:- When ATM are connected to an ATM network, they are
said to be networked.
-
7/27/2019 NA_Session 26 - Channel Banking
14/58
The following components of the ATM provide the customer interface-
Video Display Monitor.
Key board/Keypad.
Touch Screen
Slots: There are slots in the ATM for various purposes as detailed below.
Card Reader
Cash Dispenser Envelope Dispenser.
Deposit slot.
Future Perspective of ATM:-
Increasing the number of transactions per day per ATM.
Establishing connectivity with point of sale (POS) terminals at merchant
establishment. E-ticketing in railways, roadways and airways and International payment
networks VISA and Master card.
-
7/27/2019 NA_Session 26 - Channel Banking
15/58
Credit Cards:- A credit card is small plastic card around 8.5 cm by
5.5 cm. it has the name and the account number of account holderembossed on it. Many card issuers being banks, also allowwithdrawals of cash for emergency purposes and levy a service feefor such withdrawals. There are different types of credit cards,some of which are discussed below.
Charge card.
Smart card or Chip card. Debit card.
Restricted card/Member card.
Credit Card.
-
7/27/2019 NA_Session 26 - Channel Banking
16/58
Charge card :-In such cards, transaction are accumulated over a
period of time, generally a month and the total amount charged,i.e. debited to the account. The credit card holder is given about 25to 50 days time to credit his account in case there are insufficientfunds in his account at the time of debit.
Since the transaction are accumulated, it is only charged, i.e. notdebited to the account immediately such cards are charge cards.
Credit cards:-In credit card the card holder has the option to paythe entire amount as soon as the account is debited or he maychoose to pay only a certain percentage of the amount debited andhe gets a credit to extent of rest. i.e. he can pay it in monthly
installments later.
-
7/27/2019 NA_Session 26 - Channel Banking
17/58
Debit Cards:- A bank issue a card that allows its user to accesstheir funds for the purpose of paying for merchandise. A debit cardacts like a credit card, the difference being that funds areimmediately taken from the cardholders accounts
Smart Card:- The Smart card looks exactly like any other plastic
card or an ATM card with an integrated circuit (IC) installed. Thischip contains memory, may contain a processor, andcommunicates with the external world through contacts on thecard.
Member Card This is used exclusively by the member of a hotel
or chain of hotels/ clubs etc.
-
7/27/2019 NA_Session 26 - Channel Banking
18/58
The advantages of credit card system to the concerned parties are as
under:- To the Card Holder:-
It is convenient to carry.
It inculcates a sense of financial discipline in him.
It provides a proof of purchase through banking channels. It also gives exposure to banking.
It also allows him to delegate spending power to add-on-members.
It also extends additional facilities like insurance cover/discounts.
-
7/27/2019 NA_Session 26 - Channel Banking
19/58
To the merchant establishment:-
Increase in sales because of increased purchasing power of thecardholder due to unlimited credit available to him.
Preferred location by card holder.
Advertising of a promotional support on a national scale.
Development of a prestigious clientele base. Etc..
To Banks:-
Scope and potential for better profitability out of share earned fromthe traders turnover.
Helps in establishing banking relationship with new customers.
This also provides additional customer service to the existingclients. Better network spread of cardholders and their increased
use higher popularity and image for the bank. Etc.
-
7/27/2019 NA_Session 26 - Channel Banking
20/58
Dynamic Signature Verification:- It traces the way in which asignature is written- the dynamic signature tablet automatically verifiesweather the signature is genuine or not.
Fingerprint Verification:- It is used to identify weather the user ofthe smart card is genuine or not by electronically scanning fingerprintridges.
Voice Recognition System:- It uses a computer which is programmedto recognize different voices and compares the voice with the recorded
original. Hand Geometry:- Researches shown that individual hands have
unique features such as finger lengths, skin web opacity and radius ofcurvature of fingerprints. Systems are available to measure handgeometries by scanning them.
Retinal Pattern Verification:- The pattern of the blood vessels on thehuman eye is a unique physical characteristics; the retina is scanned
using a low intensity infrared beam and the persons identification isthereby ascertained. Vein Recognition:- This method, like retinal pattern identification, use
the unique vein structure of the human body to identify individuals.Visual recognition too.
-
7/27/2019 NA_Session 26 - Channel Banking
21/58
With the introduction of computers in Indian banks and with theadvent of ATMs the banking service are provided across the bank.Customers need not to visit branch for their banking transaction liketele-banking, remote banking facility are there. This type of banking iscalled electronic banking.
Anytime Banking:- ATMs have eliminated the time limitations of
customer service, and offer a host of banking services includingdeposits, withdrawals, requisitions, instructions and transfers.
Anywhere Banking:- Interstation connectivity of ATMs has alsofacilitated withdrawals from other stations, a service particularlyuseful for frequent travelers. In some of the Indian public sectorbanks, remote banking is being further extended to the customersoffice and home.
-
7/27/2019 NA_Session 26 - Channel Banking
22/58
Home Banking (Corporate and Personal):- Today, banking
customers are more affluent and technologically sophisticated thanever before. With less and less time available to conduct routinebanking business they are being extended home banking facilities.
Corporate Banking:- Remote banking has become very popularamong corporate customers especially big business/industrial houseswhich are already automated. At present by utilizing remote banking
facility, corporate customers will be able to get to following services: Getting their current balance or getting their statement of accounts
for any pre-defined period.
Ordering cheque books.
Ordering intra-bank and inter-bank fund transfers.
International remittances. Opening letter of credits.
-
7/27/2019 NA_Session 26 - Channel Banking
23/58
By obtaining a special SWIFT (Society for Inter-bank FinancialTelecommunication) authentication facility in arrangement with theirbankers, Corporate Customers will be able to directly prepare messages inthe SWIFT format by setting in their office, and transfer the particulars inthe respective templates to their bankers.
Personal Banking:- By using tele-banking facility, customers can dial upthe branchs designated telephone number, which is connected to thecomputer and, by dialing his identification number, will be able to getconnectivity to the branchs designated computer. A customer can haveaccess to his balance, and also can place order for statement of account,cheque books and few selected services through this phone banking
-
7/27/2019 NA_Session 26 - Channel Banking
24/58
The function of tele banking services is based on the voice
processing facility available with bank computers. The callergenerally a customer of the bank will be able to call the bankanytime and enquire balances or transaction history, and totransfer funds between accounts.
Some banks uses telephone answering machines in which case
the services is not really tele-banking per se but simply atelephone answering system.
-
7/27/2019 NA_Session 26 - Channel Banking
25/58
With popularity of PCs and easy access to Internet and WorldWide Web, banks increasingly use internet as a channel forreceiving instructions and delivering their products andservices to their customer. This form of banking is generallyreferred to as Internet Banking.
Broadly the level of banking services offered through theinternet can be categorized in to three types-
The Basic level Services is the banks website.
In the next level is Simple Transactional Website.
The third level of Internet Banking services are offered byFully Transactional Websites.
-
7/27/2019 NA_Session 26 - Channel Banking
26/58
It removes the traditional geographical barriers as it could reachout to customers of different countries/legal jurisdiction. This hasraised the question of jurisdiction of law/supervisory system towhich such transactions should be subjected.
It has added a new dimension to different kinds of risks traditional
associated with banking, heightening some of them and throw newrisk control challenges and risk perceptions.
Security of banking transactions, validity of electronic contract,customers privacy, etc. which have always been matters ofconcern, given that the Internet is a public domain, not subject to
control by any single authority or group of users. It poses a strategic risk of loss of business to those banks who do
not respond in time to this new technology, being the efficient andcost effective mechanism of banking services.
-
7/27/2019 NA_Session 26 - Channel Banking
27/58
Mobile banking comes with features like 128 bit encryption and openInternet technology, i.e. it is not dependent on any specific serviceprovider and the handset company. This service is free of charge. Acustomer on his/her mobile screens can check his bank balance or order ademand draft, stop cheque payment, request for a cheque book etc.
-
7/27/2019 NA_Session 26 - Channel Banking
28/58
A cheque truncation is defined by the new section 6(b) of the NI Act as a
Cheque which is truncated during the course of a clearing cycle either by theclearing house or by the Bank whether paying or receiving paymentimmediately on generation of an electronic image for transmission,substituting the further physical movement of the cheque in writing.
Characteristics:
It is an electronic image of a paper cheque.
Only the Banks involved and the clearing house can truncate a cheque (i.e. create an electronic image of a cheque).
The electronic image of the cheque truncation will substitute the physicalcheque from the point and time of truncation onwards
Truncation is to be done only during the course of a clearing cycle toreduce the time taken for realisation.
The paper cheque after truncation is to be kept in the custody of the bank/clearing house that truncated the cheque.
-
7/27/2019 NA_Session 26 - Channel Banking
29/58
Addition of digital signature of the truncating bank/ clearing house to theelectronic image of the cheque truncated is optional.
Ways in which truncation can be done:
Using MICR data: MICR cheques have the cheque number, city, bank andbranch number and transaction code pre-coded. Abroad even the accountnumber of the customer is precoded. During encoding the collecting bank,
the amount as well as the payees name is inserted in the MICR line. Theentire MICR line is then captured electronically. The electronic informationis then exchanged with other for clearing (Inter Bank Data Exchange orIBDE). The cheques do not move further.
Using Image Processing: Image Processing is the latest document handlingsystem. It involves scanning of both sides of the cheque and storing theimage in the digital form. The cheque is moved to off-site storage and theimage is used for further processing.
-
7/27/2019 NA_Session 26 - Channel Banking
30/58
Advantages: Cheque truncation truncates or stops the flow of cheques
through the banking system. Information from the cheque is converted into a medium for electronic
processing.
The cheque itself is then truncated and stored.
Further processing is done through the electronic medium.
Truncation can also occur at the branch where the customer deposits thecheque.
-
7/27/2019 NA_Session 26 - Channel Banking
31/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Some Channels of future - ICICI Bank
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
32/58
Features
Complete Financial status information like
account balance, transaction history, stock
quotes, etc. and processes requests like
stop cheque, etc. Small denomination transactions executed
instantly
Applications
Useful for small transactions in places like
petrol pumps, toll booths, etc. Mobile to mobile payments
High speed, User Friendly
Source: Presentation by ICICI Bank
-
7/27/2019 NA_Session 26 - Channel Banking
33/58
Features
Closed user group card that allows transfer
only with select merchants
In use at Ahmedabad Municipal Corporation
for Octroi collections
Applications
Used by transport agencies for paying octroi.
Ensures that there is no misuse
Could be combined with other cards formulti-service usage
Octroi Card
Specific and Secure
Source: Presentation by ICICI Bank
-
7/27/2019 NA_Session 26 - Channel Banking
34/58
-
7/27/2019 NA_Session 26 - Channel Banking
35/58
Features Banking Transactions
Balance Enquiry
Cash Withdrawal
Cash Deposit
Utility payment
Proprietary payment devices PCs/Cash
Registers
Applications
Wide reach to provide financial transactions Increased customer convenience
Source: Presentation by ICICI Bank
-
7/27/2019 NA_Session 26 - Channel Banking
36/58
Features Wireless / telephone line based internet
access. Could be solar-based for India
Applications
Extend reach of our products to rural
customers in remote areas at low costs
Supplement by value-added services like
video-conferencing for loan disbursal, online
health checkup for insurance, etc.
Multipurpose, Cost Efficient, Wide Reach
Source: Presentation by ICICI Bank
-
7/27/2019 NA_Session 26 - Channel Banking
37/58
Features
Storage as well as processing capabilities
Easy to carry and useful for offline processing
Applications
Can be used by Agents to carry out
transactions on behalf of the users
Ideal for simple processing like generating
insurance illustrations and rural banking
Convenient, authentication, fast processing
Source: Presentation by ICICI Bank
-
7/27/2019 NA_Session 26 - Channel Banking
38/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Some Channels of future - ICICI Bank
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
39/58
Foundation of creating superior channel is superiorinsight into customer behaviour
Channel requirement for delivery of different
products vary with
Customer TypeCustomer Behaviour
Customer Profitability
Adaptability by Customer
Creating
SuperiorChannelNetwork
-
7/27/2019 NA_Session 26 - Channel Banking
40/58
Multi-product view to thecustomer across differentchannels like Branches,Web and Call Center
Offer customized productsand services
Consistent viewacross channels
Consistent
identification ofthe customeracross thechannels
-
7/27/2019 NA_Session 26 - Channel Banking
41/58
The channel should be readily available to
customers
Location
ATMs spread across the country for easy
accessibility
Time
24X7 ATM access
24x7 Internet Banking access
Extended 8 to 8 branch access
Availability
-
7/27/2019 NA_Session 26 - Channel Banking
42/58
Simplicity
Technology should be simple and user-friendly
Customer should feel comfortable with the
technology
Simpler process for authentication and
Verification
Regional language ATMs
Simplicity
-
7/27/2019 NA_Session 26 - Channel Banking
43/58
Expected service levels to be met at all times
Customer confidence must be built over a period of
time
When ATMs were introduced managing cash
replenishment to ensure ready availability of cash
at any time was of utmost importance
Today ATMs are being managed remotely and with
more efficiency through usage of technology
Reliability
-
7/27/2019 NA_Session 26 - Channel Banking
44/58
Customer should not have conflicting
experiences across various channels
Need to provide integrated platform that can
accept information from various other
platforms used by various product groups of
the Bank
Consistency
-
7/27/2019 NA_Session 26 - Channel Banking
45/58
Channels must continuously strive to add
greater value to customers in terms of services
Mobile top-ups at ATMs
Benchmark innovative products / servicesacross the world to add newer perspectives to
electronic transactions
Card to Card funds transfer
Value-added
services
-
7/27/2019 NA_Session 26 - Channel Banking
46/58
Customer education on
Channel potential
Channel usage through hand-holding for
the initial period
Channel migration plan
Clear plan on migrating customers and
scale-up of new channel
Accordingly incentivise customers to shift to
the newer channels
Customer
EducationandMigration Plan
-
7/27/2019 NA_Session 26 - Channel Banking
47/58
Continuous improvement to remove
customer inconvenience
Avoid calls at odd hoursAvoid mobile alerts at odd hours
Process and systems improvements for
reducing prolonged wait times at
Phone Banking
AvoidingInconvenience
-
7/27/2019 NA_Session 26 - Channel Banking
48/58
Changing Banking Paradigm
Growing Importance of Channels
Present Day Delivery Channels
Some Channels of future - ICICI Bank
Making the channels deliver
Challenges
-
7/27/2019 NA_Session 26 - Channel Banking
49/58
Integration with back-end to deliver a one-bank
experience to the customer
Across various channels
Across various product lines
Integration
across channels
-
7/27/2019 NA_Session 26 - Channel Banking
50/58
Seamless service integration between the
front-line (branches/ Phone Banking) and
back-office (Operations units)
Serviceintegration
Ch l I t ti
-
7/27/2019 NA_Session 26 - Channel Banking
51/58
Channel IntegrationChannels
Middleware
Banking
Credit Cards
Auto Loans
Home Loans
Bonds
Web Trade
Product Systems
Agents
CallCenter
CyberCenters
InternetBanking
ATMs
Branches
m-Banking
Customer
-
7/27/2019 NA_Session 26 - Channel Banking
52/58
Complementary placement of various
channels branches / ATMs to be locatedjudiciously to ensure maximum coverage at
minimum costs
Channelplacement
-
7/27/2019 NA_Session 26 - Channel Banking
53/58
Managing the logistics involved in servicing
the customers across the various channels
Cash filling and replenishment across 1950
ATMs even at remote locations
Handling drop-box requests at every nookand corner of country
8 to 8 banking
Managing huge number of Phone Banking
seats
Logistics
-
7/27/2019 NA_Session 26 - Channel Banking
54/58
Added convenience Vs. compromise on security
or qualityaspects
Latest technologies and complex logics to avoidfraud Vs. Simplicityand user-friendliness
ScaleVs.Affordable cost
Trade offbetween
security,convenience& cost
-
7/27/2019 NA_Session 26 - Channel Banking
55/58
Training of front-line staff manning all
service points across branches, Phone
Banking, sales force to handle customer
queries and service expectations
Educating customers to encourage multiple
channel usage
EmployeeTraining and
CustomerEducation
-
7/27/2019 NA_Session 26 - Channel Banking
56/58
Foundation of creating superior channel is superior
insight into customer behaviour
Channel requirement for delivery of different
products vary withCustomer Type
Customer Behaviour
Customer Profitability
CreatingSuperiorChannelNetwork
-
7/27/2019 NA_Session 26 - Channel Banking
57/58
References:IIBF PublicationsGoogleICICI Bank Presentation onmaking channels deliverRBI Website
-
7/27/2019 NA_Session 26 - Channel Banking
58/58
Thank You
top related