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Core Banking Solution
> Click here to view the list of branches under CBS (Indian)
> Click here to view the list of branches under CBS (Overseas)
What is Core Banking Solution ?
Core Banking Solution (CBS) is networking of branches, which enables Customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes the Bank’s Customer. Thus CBS is a step towards enhancing customer convenience through Anywhere and Anytime Banking.
How shall CBS help Customers?
All CBS branches are inter-connected with each other. Therefore, Customers of CBS branches can avail various banking facilities from any other CBS branch located any where in the world. These services* are:
To make enquiries about the balance; debit or credit entries in the account.
To obtain cash payment out of his account by tendering a cheque. To deposit a cheque for credit into his account. To deposit cash into the account. To deposit cheques / cash into account of some other person who has
account in a CBS branch. To get statement of account. To transfer funds from his account to some other account – his own or
of third party, provided both accounts are in CBS branches. To obtain Demand Drafts or Banker’s Cheques from any branch on
CBS – amount shall be online debited to his account. Customers can continue to use ATMs and other Delivery Channels,
which are also interfaced with CBS platform. Similarly, facilities like Bill Payment, I-Bob, M-bob etc. shall also continue to be available. Bank is in the process of launching Internet-banking facility shortly.
All these aim to provide convenient, efficient, and high quality banking experience to the customers, comparable to world class standards.
What are other benefits to the Customers ?
A CBS branch is like a Sales & Service Delivery Center. Back office processes/activities are handled through technology at some other site, called Data Center. Branch, therefore, has more time for serving customers. This improves the quality and efficiency of the services rendered and the customer is directly benefited by way of satisfying and happy banking experience.
Since a CBS branch is essentially designed to focus on customer-interface and customer service, the special lay-out and ambience of the branch is made to provide a convenient and delightful banking experience. The Customer Service
Representatives / Executives at the branch are specially trained to understand, facilitate and deliver banking services efficiently and effectively.We wish our customers happy banking.
(*To safeguard the interest of customers, Bank has placed certain restrictions on the amount of transactions, which are handled through other branches under CBS. The details can be obtained from the branch).
What is Core Banking Solution?
Core Banking Solutions is new jargon frequently
used in banking circles. The advancementin
technology especially internet and information
technology has led to new way of doingbusiness
in banking. The technologies have cut down time,
working simultaneously ondifferent issues and
increased efficiency. The platform where
communication technology andinformation
technology are merged to suit core needs of
banking is known as Core BankingSolutions. Here
computer software is developed to perform core
operations of banking likerecording of
transactions, passbook maintenance, interest
calculations on loans and deposits,customer
records, balance of payments and withdrawal are
done. This software is installed atdifferent
branches of bank and then interconnected by
means of communication lines liketelephones,
satellite, internet etc. It allows the user
(customers) to operate accounts from anybranch
if it has installed core banking solutions. This new
platform has changed the waybanks are working.
Now many advanced features like regulatory
requirements and otherspecialized services like
share (stock) trading are being provided. Core
banking solutions arevery helpful to SME
industries.
Core Banking Solution (CBS) is networking of
branches, which enables customers to
operatetheir accounts, and avail banking services
from any branch of the Bank on CBS
network,regardless of where he maintains his
account. The customer is no more the customer
of aBranch. He becomes the Bank’s
Customer. Thus CBS is a step towards enhancing
customerconvenience through Anywhere and
Anytime Banking.
. The advancement in technology especially
internet and information technology has led
tonew way of doing business in banking. The
technologies have cut down time,
workingsimultaneously on different issues and
increased efficiency. The platform
wherecommunication technology and information
technology are merged to suit core needs
ofbanking is known as Core Banking Solutions.
Here computer software is developed toperform
core operations of banking like recording of
transactions, passbook maintenance,interest
calculations on loans and deposits, customer
records, balance of payments andwithdrawal are
done. This software is installed at different
branches of bank and theninterconnected by
means of communication lines like telephones,
satellite, internet etc. Itallows the user
(customers) to operate accounts from any branch
if it has installed corebanking solutions. This new
platform has changed the way banks are working.Concepts regarding Core Banking Solutions➢ Is the concept a novel one?
No this concept came into existence somewhere
in 1980’s but till recently it was in itsbudding
ages, but with technological advancements in all
fields this concept is also groomingand adding
more and more features to itself.➢ Why the inception in INDIA so late?There are many reasons for the late inception of CBS in INDIA, some of them being
✔ Indian banks were not interested in going for
it.
✔ Required technology for adopting CBS was
absent.
✔ The competition prior globalization was not
that of present level.➢ What are the application areas of core banking?Required computer software is developed to perform core operations of banking like
✔ Balance of payments and withdrawal are
done.
✔ Mobile banking
✔ Internet banking
✔ ATM’s
✔ Recording of transactions
✔ Passbook maintenance
✔ Interest calculations on loans and deposits
✔ Customer records
This software is installed at different branches of
bank and then interconnected by means
ofcommunication lines like telephones, satellite,
internet etc. It allows the user (customers)
tooperate accounts from any branch if it has
installed core banking solutions. This
newplatform has changed the way banks are
working. Now many advanced features
likeregulatory requirements and other specialised
services like share (stock) trading are
beingprovided. Core banking solutions are very
helpful to SME industries.➢ What all banks are using it?
Most of the nationalized banks in India for
example: State Bank of India, Punjab
NationalBank, Allahabad Bank, HDFC, ICICI Bank
today supports core banking. As of 2007,
manyCooperative banks in India such as REPCO
Bank, Jain Urban Cooperative Bank,
KangraCentral Cooperative Bank, Udaipur Urban
Cooperative Bank, Kollam District Cooperative
Bank, Kerala State Cooperative and Panchsheel Mercantile Cooperative Bank have started touse and offer centralized Core Banking too.
Some of the Cooperative banks and RRBs are yet
not having CBS, but they are on their wayto go
for CBS and very soon they will also be under the
roof of the umbrella of Core Banking Solution.➢ What are the Standard Software tools?Some of the standard software tools that many banks are using these days are
✔ Intellect Suite from POLARIS
✔ Flexcube from iFlex Solutions
✔ Finacle from Infosys
✔ B@ncs from TATA Consultancy ServicesWhat is the need of Core Banking Solutions?The need for such a solution does not arise just because of one reason or the other but itrequires a combination of driving forces to come into existence. Some of these forces being-•To meet the intense competition and changing market dynamics in an over bankedenvironment.•To meet the regulations and compliance requirements (example in order to meet theBasel ll norms banks must enhance there IT infrastructure).•To meet the demands of customers who are better informed, more demanding and lessloyal than ever.•To enhance efficiency and effectiveness.•Increasing customer satisfaction and convenience•Freeing up time for branch staff to focus on sales and marketing•Simplifying process for employees
•Enhancing bank’s competitiveness in the market•Improved process efficiency
Shrinking margins. Slow growth…. The challenges
that confront today’s banker are asintense as
they are varied. And technology, the banker’s
trusted friend in the past fewdecades, has lately
become an obstacle in the quest for market
leadership. Stakeholders’expectations continue to
be whetted by their positive experience in other
industries like retailand travel, of how technology
can make a difference. Satisfying such
expectations requiresthat banks make their vital
systems customer-centric, cross-channel capable,
multilingual andprocess-oriented. Not doing so in
the near term could prove to be a costly gamble.
Customer perceived value in internet banking in GhanaUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Abigail Naana Adams; Adnan Odartey Lamptey; [2009]KEYWORDS: Internet banking; customer value; Ghana;ABSTRACT: Customer perceived value has come up strongly in recent studies as the basisof competitive advantage in the New Economy. On another hand, internetbanking has emerged as the trend in modern banking and a more effective model than traditional banking in creating customer value. Against this backdrop, this study examines
customer value perceptions in internet banking in Ghana. Internet banking providers were interviewed to ascertain the level of banking products and services that are offered to customers. Questionnaires were administered to customers to investigative, through a descriptive dataanalysis, their value perceptions of the products and services they accessfrom internet banking.http://epubl.luth.se/cgi/epX_formFILL.cgi?new=yes&xtype=uppsats&xlang=enThe study shows that internet banking offered customers some level of valueand satisfaction in terms of location and time convenience as well as costsaving but it is also fraught with teething problems ranging from limitedinternet access, limited service (non-transactional), occasionally slowinternet connectivity and website downloading. Still, the customers areenthused by the service and express expectations of improved and advanceservices. The study concludes that banks need to promote internet banking by having anactive stake in the development of the internet infrastructure and offeringmore incentives to customers. They must also match the internet technologywith robust software and networking systems, customer-value-perception- based strategies, benchmarking and adequate training of staff and overall develop core competences in the face of an increasingly dynamic indus
State Aid in the Financial Services Sector and the Implications of the Recent Financial CrisisUniversity essay from Lunds universitet/Institutionen för handelsrättAUTHOR: Erdal Kocoglu; [2009]KEYWORDS: state aid; financial crisis; Financial services sector; Juridical science; Rättsvetenskap; juridik; Law and Political Science;ABSTRACT: Financial services sector is fundamental to economic growth and development in all advanced economies. Financial services such as banking, savings and investment, insurance, and debt and equity financing constitute a nation’s economic engine by fulfilling three core functions in the economy. Firstly, these services provide financial intermediation functions between savers/investors that are looking for security and growth and consumers/businesses who are looking for access to credit and capital. This intermediation is vital for allocating capital to the most profitable investments, providing a mechanism for saving, raising productivity, and consequently, increasing competitiveness of the nation in the global economy. Secondly, in addition to pooling investment risks, financial services sector provides a mechanism to manage other risks
effectively and efficiently by way of insurance and increasingly sophisticated derivatives. These tools help private citizens and businesses cope with diverse global risks and uncertainties. Finally, financial services sector provides the practical mechanisms for money to be managed, transferred and received quickly and reliably. This is an essential requirement for commercial activities to take place and for participation in international trade and investment. Therefore, the financial services sector is specific and can easily be distinguished from other sectors. A serious downturn encountered in this specific sector might have disastrous impacts on the real economy of a nation. The current economic crisis in the United States and Europe, marked by the ongoing weaknesses of major banks and the resulting credit and capital crunch, highlights the critical importance of the financial services sector in national and global economies. Considering the importance of this sector, it is very hard for States to be unresponsive to the calls for assistance from ailing financial institutions. In such a situation, the States ask for a well-targeted and organized public measures in order to safeguard financial stability and restore economic viability. The State aid measures are perceived as part of the solution and thus, they are generally implemented to rescue failing firms in the financial services sector. However, Member States in the EU should follow certain State aid rules while intervening to this specific sector. Unfortunately, the specific nature of this sector is not recognized in the EU until the recent banking crisis. Member States are required to follow the same State aid rules as in other sectors. To realize this fact, the Commission had to wait until the end of 2008 when the financial crisis spilled into the real economy. Later then, the Commission adopted some flexible measures for this sector but their sufficiency is also highly doubtful. The purpose of this thesis is to provide an overview of the State aid rules applied in financial services sector. In the first part, two common types of State aid measures granted in the financial services sector, rescue and restructuring aid and State guarantees, are discussed in detail. After a review of applicable rules in the form of guidelines and notice for these two forms of aid measures, implications of the recent financial crisis are discussed in the final chapter.
Brand strategy in the Swedish banking industry : A comparative study of Nordea and SEBUniversity essay from Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management); Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring,
Management); Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management)AUTHOR: Henrik Edström; Christian Algotsson; Emil Folkesson; [2008]KEYWORDS: brand; brand identity; positioning; Nordea; SEB;ABSTRACT:
A brand consists of more parts than the visible features such as names and logotypes. No matter in what industry a company is acting the brand in itself determines if the company will succeed or not. A successful brand is extremely hard to copy since two exactly similar brands do not exist. With a strong brand you create positive associations and form emotional relationships with customers.
The purpose with this paper was to investigate how banks in the Swedish market explain their brand identity and how they use their brand identity when positioning themselves. Furthermore the authors have investigated the differences in that matter between two of the leading banks in Sweden. This was done through a comparative case study with Nordea and SEB who are two of the leading banks in the Swedish market.
A qualitative method has been used to this thesis and in-depth interviews have been conducted to collect information that was suitable for our stated problem.
The results showed that both Nordea and SEB explain their brand identity according to the different aspects that the theory states and they understand the importance of brand identity. When building brand identity it is important to be aware of the different parts that the brand identity consists of. Both banks try to develop the different parts of the brand identity but there are differences in the amount of resources they put in each part. When positioning themselves, both Nordea and SEB are answering the questions in the theory concerning positioning and positioning a brand. The theory implies that the core identities are the foundation when positioning and both Nordea and SEB are well aware of their core identities and they are using them when positioning their brand.
Internet Banking in Greece: Development, Evaluation and PerspectivesUniversity essay from Blekinge Tekniska Högskola/Sektionen för Management (MAM)AUTHOR: Andreas-nikolaos Papandreou; [2006]
KEYWORDS: företagsekonomi; business administration - international business; business administration - information;business administration - organization; internet banking; e-banking; online banking; distribution channel; financial services;greece;ABSTRACT: Revolutionary developments in marketing, information and communications technology continue to transform the banking and financial industry. Distribution of banking services through the Internet is an important part of this transformation. The objectives of this thesis are mainly to examine the role, which Internet banking can play as a new distribution channel of banking services for the benefit of both financial institutions and customers in Greece. The study explores the growth in on-line banking services and the ways in which financial institutions in Greece can take advantage of Internet technology to offer successful and cost-effective banking solutions. Moreover, this thesis addresses the key issues of concern to the banks regarding their strategic positioning and the products/services they offer or could offer on the Internet. Technology can help banks build an integrated delivery strategy for effective multi-channel management. Results identify the reasons why Greek banks use Internet banking and their effect and place an emphasis on the strategic impact of Internet technology as a core element of financial services. Greek banks want to expand their existing distribution channels using the Internet as another alternative channel. Internet banking in Greece is on its way to become the centerpiece of direct banking strategies.
Relationship between online service quality and customer satisfaction: a study in Internet bankingUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Parmita Saha; Yanni Zhao; [2005]KEYWORDS: Internet Banking; Service Quality; Customer Satisfaction;ABSTRACT: In the last few years we have witnessed a substantial growth of internet-based services, both from pure Internet businesses and from traditional companies that are developing online services. One of the key challenges of the Internet as a service delivery channel is how they manage service quality, which holds a significant importance to customer satisfaction. The purpose of this research was to gain a better understanding of the service quality dimensions that affect customer satisfaction in the Internet banking sector from a consumer perspective. Based on a detailed literature review, a frame of reference was developed. Five service quality dimensions were selected to be tested in the Internet banking sector in order to explore the relationship between service quality and customer satisfaction. A qualitative research approach was used to get a better understanding
of this issue. However, a small quantitative survey was also conducted to support the results obtained from the qualitative study. The empirical data were gathered through in-depth interviews with four people by using a semi-structured questionnaire and a survey were conducted with 25 people. Data presentation and analysis were done in accordance with the research questions and the frame of reference. Finally, in the last chapter findings and conclusions were drawn by answering the research questions. Nine service quality dimensions in Internet banking were identified in this study (i.e., efficiency, reliability, responsiveness, fulfillment, privacy, communication, personalization, technology update, and logistic/technical support). The quality performance of all the nine dimensions was shown to have a strong impact on customer satisfaction. Efficiency, reliability, responsiveness, fulfillment, privacy was found to be the core service quality dimensions in Internet banking. Finally, technology update and logistical or technical support was two new dimensions found in this study.
Electronic customer relationship management in online bankingUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Tanveer Ahmed; [2009]KEYWORDS: E-CRM; E-CRM in banking; E-CRM in online banking; relationship marketing; relationship management; online banking and relationship management; online bank marketing management; online customer management;ABSTRACT: In online banking face to face interaction between bank and customer is not seen. This create huge service gap for banks how to serve and maintain customer relations in online environment. The aim of this thesis is to investigate how banks use "Electronic Customer Relationship Management" tool to maintain their customer relations by using the Internet and what benefits are derived by using this E-CRM tool and how successfully this tool is implemented in a bank. A qualitative study was conducted comprising two cases of banks one from Sweden and second from Denmark to get inside of E-CRM practices. The findings indicate that banks use E-CRM mostly for mass customization, customer profiling, self service, one to one interaction and automatic locks in flow of financial data like security prices which ultimately results in reduced cost of operation and increased customer loyalty and more profits. Similarly staff training and customer feedback is considered as backbone for successful implementation of E-CRM strategy.
E-business adoption in the banking industry in GhanaUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Emma Anamuah-mensah; Georgia Marfo; [2009]KEYWORDS: E-business; E-commerce; Ghana; Banking Industry; Benefits; Challenges; Barriers;ABSTRACT: This thesis is based on a case study of four banks, in Ghana: two private and two state banks. The study only sought to examine the adoption of e-Business in the Ghanaian banking industry with respect to the expected benefits derived by adopting e-business, the barriers that prevent firms from taking advantage of e-business adoption and the challenges firms encounter when adopting e-business. The study idea was conceived on the premise that businesses are always looking for ways of improving their products and services deliveries and will thus be useful to understand how the adoption of e- Business can benefit the banking industries in Ghana that is seen to be in the fore-front of national development. The researchers also wanted to understand how electronic commerce as a new way of doing business can be introduced effectively in the Ghanaian banking business especially with the understanding that E-business involves the fundamental reengineering of business model into a internet based networked enterprise. The result of the study indicated that the benefits of e-business are well known to the banks and represent a formidable force to drive the adoption by many banks in Ghana. The benefits of e-business are experienced whether or not the bank is state or private. The various areas where the banks are preparing to use e-business approach includes familiar and relatively mature electronically-based products in developing markets, such as telephone banking, credit cards, ATMs, and direct deposit. This means that most of the banks have recognized the need to change their business process to conform to changing business trends in order to keep up with competition. Despite the perceived and experienced benefits of e-business in Ghanaian banking, they also identified several barriers and challenges that could be described as: economic: technical and technological: ethical and institutional: and socio-cultural. The results also revealed that the banks consider technology as the most important challenge to the effective adoption of e-service in the banking industry in Ghana. The study provides some recommendations towards improving e-business adoption in Ghanaian banks.
Factors influencing the adoption of Internet bankingUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Sara Naimi Baraghani; [2008]KEYWORDS: Electronic Banking Ebanking ; Internet Banking; Information Technology IT ; Technology Adoption; Trust;ABSTRACT: This thesis reports the findings of a study issues concerning the adoption of internet banking in Iran. This study investigates costumers' adoption within the context of Iran Internet Banking services and research framework is based on the extension of Technology Acceptance Model with Theory of Planned behavior and Trust.Theory was developed to identify factors that would influence the adoption of Internet banking. The framework includes Attitude, subjective norm, Perceived behavioral control, Perceived usefulness, Perceived ease of use, Trust and intention constructs. Survey was conducted to gather the data. Partial Least Square was used to examine the entire pattern of inter-correlations among the thirteen proposed constructs and to test related propositions empirically. Results show that Attitude, Perceived behavioral control, Perceived usefulness, Perceived ease of use, Trust significantly influence customers' intention toward adopting Internet banking. Theoretical contributions and practical implications of the findings are discussed and suggestions for future research are presented.
http://epubl.ltu.se/1653-0187/2008/099/LTU-PB-EX-08099-SE.pdf
Benefits of e-CRM for banks and their customers: case studies of two Swedish banksUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Srinivas Anumala; Bollampally Kishore Kumar Reddy; [2007]KEYWORDS: -;ABSTRACT: The customer relationship management (CRM) is essential and vital function of customer oriented marketing. Its functions include gathering and accumulating customer-related information in order to provide effective services. e-CRM is a
combination of IT sector but also the key strategy to electronic commerce. e-CRM is a combination of software, hardware, application and management commitment. Aim of e-CRM system is to improve customer service, develop a relationship and retain valuable customers. e-CRM is a concern for many organizations especially banking sector. The purpose of this study is to gain a better understanding of the benefits e-CRM to customers and organization in banking industry. To justify the purpose two research questions have been addressed and on the basis literature review, a frame of reference was developed which helped us to answer the research questions and collect data. A qualitative research approach was used for this study. Empirical data was collected through in-depth interviews were conducted with two Swedish banks and a group of their customers. In the last chapter findings and conclusions were drawn on the basis on research questions. Our findings indicate that Swedish banks are well aware of the benefits and applications of the e-CRM and use the system to maintain good relationships with their customers. Our findings also indicate that with the implementation of e-CRM and the latest technologies. We have found that both the banks seem to have same description about the benefits of e-CRM. We found that both banks have maintained good relationships with customers due to the usage of e-CRM. Our finding indicates that with the implementation of e-CRM and the latest technologies banks have ensured full security for the transactions of their customer's. e-CRM facilitates the organizations to provide one to one services and also maintain the transaction security of the customers.
Credit card security and e-payment: enquiry into credit card fraud in e-paymentUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Information Systems SciencesAUTHOR: Jithendra Dara; Laxman Gundemoni; [2006]KEYWORDS: Electronic Payment; Credit Cards; Counterfeit fraud;ABSTRACT: The emergence of electronic commerce has brought in its wake some major security concerns. Electronic Payment has dominated and attracted much attention in recent times as all major stakeholders, thus payment operators, electronic card manufacturers as well as and cardholders continue to seek for effective means of combating the threats of internet frauds and more especially credit card frauds. Of the security issues facing banks everywhere, prevention of credit cards frauds has always been a high priorityCredit card frauds come in several ways. The most prevalent and commonly known type is counterfeit card fraud. Counterfeit fraud has now been overtaken as the most costly type of card fraud by a newer method, that of Cardholder-Not-Present (CNP) fraud which accounts for higher percentage of frauds in electronic payment in most developed
countries. However, as new banking channels have opened up, for example internet, phone banking and e-commerce, and the boom in credit card use, crime has migrated to seek any opportunity to attack these new and immature transaction methods. Our study is an attempt to delve a little further into the issue of credit card frauds by exploring the processes involved and pursued by two financial institutions in Sweden and India, focusing on the four key processes identified by Buttfago and Dyxler.
Mobile Financial Services : Opportunities in Electronic Banking from Wireless Computing TechnologyUniversity essay from Högskolan i Jönköping/Internationella Handelshögskolan; Högskolan i Jönköping/IHH, Företagsekonomi; Högskolan i Jönköping/IHH, FöretagsekonomiAUTHOR: Anders Gustafsson; Mattias Wramsmyr; Mikaela Claesson; [2005]KEYWORDS: Electronic commerce; mobile commerce; electronic banking; mobile banking;ABSTRACT:
Bankindustrin är ett typiskt exempel på en industri som har tjänat otroligt mycket på information- och kommunikationsteknologiapplikationer. Dessa applikationer tar formen av Internet-baserad banktjänst, som inkluderar transaktioner av värdepapper, kontouppgifter, presentation av räkningar och betalningar samt transfereringar mellan konton och individer.
Mobila banktjänster är den naturliga förlängningen av dessa typer av tjänster. Med utvecklingen av digitala trådlösa teknologier, som mobiltelefonen, är mobil Internettillgänglighet nu förverkligad.
Denna uppsats undersöker den förändrande miljön i finansindustrin som uppkommit till följd av informationteknologier, och vidare de strategiska affärsmässiga överväganden som måste göras inom detta område.
En kvalitativ fallstudie ansågs vara den mest givande metoden att använda i vår forskning. Genom att undersöka marknade, genom att skicka ut en väl strukturerad enkät till tre av de största svenska bankerna (Nordea, SEB och Handelsbanken), med relevanta
intervjufrågor angående deras involvering i mobila banktjänster, kunde deras potential avgöras. Intervjuerna utfördes sedan via telefon.
Vi drar slutsatsen att för att bli konkurrenskraftig i dagens värld av avancerade teknologier, är det avgörande att finansiella instutitioner positionerar sig genom att använda sig av sådana applikationer. Banker har de nödvändiga kapitaltillgångarna som krävs för att göra betydande investeringar i teknologisk infrastruktur. Om de inte hade anpassat sig till teknologier som bankomater, kreditkort, telefoner och Internet, skulle de lätt ha kunnat exkluderas från marknaden. Det är troligt att mobila banktjänster kommer att ha samma inverkan.
Electronic Retail Payment Systems: User Acceptability & Payment ProblemsUniversity essay from Blekinge Tekniska Högskola/Sektionen för Management (MAM)AUTHOR: Alexander Appiah; Fred Agyemang; [2004]KEYWORDS: företagsekonomi; business administration - marketing; electronic payment systems; payment mechanisms instruments; retail payments; electronic retail payments; atm; payment problems;ABSTRACT: ELECTRONIC RETAIL PAYMENT SYSTEMS: USER ACCEPTABILITY AND PAYMENT PROBLEMS IN GHANA The payment system in Ghana has undergone considerable change as electronic payment has gained increasingly popularity, especially in the cities. In Ghana, most bills are paid by walk-in customers. Because of limited transportation, many customers prefer paying by other means that may not include traveling. Customers are now looking for a way that they can easily make payments without going to each biller’s location, purchase money orders, and no loss of time. This thesis looks into issues in payment problems and user acceptance. Payment for goods and services in Ghana is characterized by long queues, long distance traveling and time wasting that negatively affect business activities and ultimately economic development. Settling utility bills, payment for goods and services, and money transfers has been a major headache for individuals and firms in Ghana resulting in declined business activities and huge debt to most of the utility services providers. Indeed, most Ghanaians are yet to fully realize the benefits of the technological advances made in banking services like networking of business branches, electronic transfers and use of automated teller machines. The few payment mechanisms that are available are not being well patronized by bank’s customers. The purpose of the study is to assess the issue of user acceptance in the existing electronic retail payments and also to ascertain the impact in solving some of the problems in retail payment for goods and services in Ghana. The research also describes and briefly analyses recent and
potential future trends in electronic payments in Ghana, and the challenges faced by participants in this business. It is also in response to the growing need in Ghana to develop non-cash payment products and clearing systems in order to reduce the over- dependence on cash payments. In analyzing the electronic payments, we restricted ourselves to business to consumer (B2C) segment. The research questions for our study are: Can electronic payment system replace existing payment systems and solve payment problems? How are customer attitudes about electronic payments changing? What are the impediments to market development and innovation in electronic payments? This study used primary sources in a form of "consumer survey" questionnaire in obtaining the perceptions of bank customers (mostly individual customers) and interviews of bank’s staffs. An extensive review of the available literature provided the foundations for the writing of the thesis. The study collected data from secondary sources such as the Internet, articles, databases, and books, and were analyzed and interpreted. In the rare situations when official statistics are available, the recentness of the data determined its usefulness. It is universally agreed that a safe and efficient national payment system is essential for sound banking. The benefits derived from electronic payment cannot be over emphasized. Numerous studies have shown that electronic payment brings many benefits to users – convenience, security, record-keeping, low cost, and etc. Our study shows that electronic payment systems have the potential to eliminate if not reduce the problems consumer face in the payment and settlement system. The study also revealed that consumers are ready to embrace the new payment systems – electronic payment, provided other well anticipated side benefits are promoted to them.
Integrated Security by using MPLS-VPN for Retail-Banking Network : Case study Mehr bank, IranUniversity essay from Högskolan Halmstad/Sektionen för Informationsvetenskap, Data– och Elektroteknik (IDE); Högskolan Halmstad/Sektionen för Informationsvetenskap, Data– och Elektroteknik (IDE)AUTHOR: Sara H.daryani; Pouria Taslimi; [2010]KEYWORDS: MPLS; Security; Integrated; IP base; IP enable; Physical security; Bank;ABSTRACT:
The studied application area is a private bank with different branches located in different provinces around the country. There was not integrated security solution to provide communication among different branches. Some of these branches could communicate
through the satellite and the others could communicate through a different technology, such as asynchronous transfer mode (ATM).
Different bank security policies were applied and maintained for different branches separately. In addition, the number of branches is expected to grow during coming year in each province.
The old topology was partial mesh and it could not support enough redundancy in case of disruption. If a connection between two branches failed, other branches might lose their connectivity as well. In addition, it could not achieve optimum routing.
Providing integrated quality of service (QoS) for the wide area network (WAN) by using different technologies is not easy to achieve, and it causes so many problems for the system. The bank uses a variety of protocols for different applications, depending on its demand, so the new applied technology should not depend on protocols, or at least should support different protocols at a same time. In the old technology, the bank was responsible for granting availability and connectivity maintenance. Providing proper bandwidth is an important aspect in the bank scenario and for the old technology; supplying enough bandwidth was costly.
As mentioned above, the old applied technology was dependent upon different protocols. Therefore, packets in different open system interconnection layers (OSI layers) would have to check thoroughly to find the source/ destination address, data and so on, to reach the correct destination. This might cause security problems for entire system. In addition, processing packet in each layer of the OSI model is time consuming.
One important aspect for the retail-banking scenario is considering all features of the security domain, such as security policy, information security, physical security, access level control, integrated security for the system and so on. Some features of the security domain in this project were not covering completely, such as integrated information security, merged security policy, and integrated physical security for the system.
In this project, all mentioned problems are solved by implementing a specific communication technology which can overcome the problems above. This technology supports multiple protocols, and it provides fast and secure communication. It can also cover redundancy and it does not cost as much as previous technologies like ATM and satellite. Easy provisioning is one feature of this technology. In this technology, the service provider is responsible for granting availability and connectivity maintenance.
The mentioned features of the security domain, which were not covered by the old technology, will be covered by a proper, integrated security solution. The IP-based physical security systems provide centralized monitoring and they can define a merged security policy
for all different branches around the country. Specific, pre-defined scenarios are created for different events in different situations.
Two Way Mobile Authentication SystemUniversity essay from Blekinge Tekniska Högskola/COMAUTHOR: Karthik Mandava; Harish Dinne; [2010]KEYWORDS: telekommunikation; telecommunications; two factor authentication; one time password otp ; demo online banking application; computer security; mobile device for authentication;ABSTRACT: The ever increasing use of internet around the world has without doubt increased the usage of internet based services, e-business models, easier ways of communication and information sharing. Such drastic increase in usage of network based systems has made the current cyber security systems old dated as the hackers and attackers of networked systems is on the rise with new and modern attack methodologies. This has necessitated the need of more secure ways of communications. The issues of Confidentiality, Integrity and the Availability of systems are of prime importance and more research towards these issues has been called for around the world. One of the major areas of security improvement is the way in which authentication of users is carried out. Even though many organizations still rely on static ID and password authentication system, this method is getting old and there is a requirement for a better way of authentication which is required. One of the solutions for this issue is the two factor authentication technique as a fundamental security function. Our thesis proposal explores the two factor authentication technique and implementation issues which can be used for the two factor authentication technique. Two-factor authentication method is implemented in two main phases. In the first phase, the authenticator gets a request generated by the application to authenticate a specified user. When the request is received, it generates a one-time password and sends it through a SMS to a GSM cell phone registered for that specified user. The one-time password has a default timeout 5 minutes which is configurable. In the second phase of the authentication, a request is sent with the user id and a hash of the one-time password. If both the one-time and user specified password is valid then the user will be authenticated. [1] It proposes a secure, convenient and user friendly two factor authentication scheme and discusses its applications to online banking.
Internationalization of banks : The consumer perspective
University essay from Högskolan i Jönköping/Högskolan i Jönköping/IHH, EMM (Entrepreneurskap, Marknadsföring, Management)Internationella Handelshögskolan; Högskolan i Jönköping/Högskolan i Jönköping/Internationella HandelshögskolanIHH, EMM (Entrepreneurskap, Marknadsföring, MaAUTHOR: Kristina Olsson; Tsolmon Gankhuyag; [2008]KEYWORDS: Worldmindedness;ABSTRACT:
Increased deregulation, cross-border activities of non-financial companies and improved information communications technology led to an increased consolidation of financial institutions across borders. Commercial banking sector in particular, have witnessed trenmendous amount of cross-border bank merger and acquisitions’ (M&As) deals through out the recent years.
The reasons behind cross-border bank M&As are examined from different theoritical perspectives, such as a mode of entry into a foreign market, as a value-creating strategy and/or way of maximizing shareholder value either by achieving efficiency gains or by increasing the market power. It is not entirely clear however if any of these motives take into account the consumer perspective on the subject matter; in fact it seems that consumer perspectives or attitudes towards the increasingly globalized banking sector has been left out of discussion. Furthermore, while globalization has accelerated cross-border merger activities around the world, another global force recently has been creating a counterweight to cross-border deals. Concerns over nationalism, feelings of national security and protectionism have delayed several cross-border banking deals.
The purpose of this study is therefore to explore the Swedish consumer attitudes on the issue of internationalization of banks. Through literature studies we have identified relevant threories of consumer perspectives on the general concept of globalization; the consumer nationalism and consumer worldmindedness. Based on the previously developed scale of these two opposing concepts, the study measures the consumer attitudes towards the subject matter by examining to what extent they accept the highly globalized world and more importantly, greatly internationalized banking sector. The study took a quantitive approach where the survey was handed out to the general public in Jönköping in order to apply our researched theories and to see for an association between their general attitude on globalization and their specific attitude towards internationalization of banking sector.
The result showed the average consumer has a nationalistic attitude towards internationalization of banks. Thus we can argue that although the future seems to bring us an increasingly globalized financial market, the nationalistic or protectionist attitude may always exist at some level within the individual consumer. It is hard to predict how broad or influential the impact of this ‘attitude’ would be, yet it is certain that this will be a never-ending counterforce to the globalized banking sector we are looking at in the future. Foreign banks who are merging with or acquiring Swedish banks therefore should focus not
only on the gains that they will achieve from entering Sweden, but also how these gains can be transferred as a benefits to consumers or government of the country to manage challenges related to consumer nationalism.
Remote People Management - Resolving Organizational Issues at Call Centers: Case Study of the Bank of Nova ScotiaUniversity essay from Blekinge Tekniska Högskola/Sektionen för Management (MAM)AUTHOR: Elena Maslova; [2008]KEYWORDS: företagsekonomi; business administration - organization; business administration - management control;business administration - information; assimilation; call center; information technology; innovations; remote people management; turnover;ABSTRACT: Transformation of management coincided with rise of IT and re-orientation towards the demand driven economy. IT facilitated the development of remote communication and data accessibility, while re-profiling the management methods, in meanwhile, customer focus has led to organization of customer-oriented establishments such as call centers. However, aside from benefits, including accessibility, convenience, and long term cost reductions, implementation of innovations in information technologies has yielded issues. Complete assimilation of technology proved to be difficult due to factors emerging from technological, organizational and environmental contexts. Namely, factors that are most applicable in the call center context are technology readiness and managerial obstacles. Another issue that had risen as a consequence of wide spread use of IT in the call center context is employee turnover. Although not directly linked to turnover per se, IT assisted in transformation of management methods, which, uncompensated, exert pressure onto employees, while often remaining unseen. Since pressure in addition to contributing factors is linked to stress, one suggests that stress is the leading cause of turnover at call centers. Accordingly, pressure to perform, along with applied control methods will be examined in this thesis. Thesis proceeds to investigate background information on these issues, followed by review of the relevant academic work, concluding with the case study in the banking sector aiming to look at specific issues in order to find practical solutions. Finally, a summary will indicate the proposed direction for issue resolution.
Online banking access system : Principles behind choices and further development, seen from a managerial perspectiveUniversity essay from Högskolan i Jönköping/IHH, Informatik; Högskolan i Jönköping/IHH, Informatik; Högskolan i Jönköping/IHH, InformatikAUTHOR: Sofia Li; Patrik Ekberg; Gentiana Morina; [2007]KEYWORDS: online banking; internet banking; ebanking; online banking access system;ABSTRACT:
Online banking is a young way for banks to reach new and old customers. The concept has emerged over the last decade from being not very utilized to become a major channel for the bigger banks in Sweden but also in the world. This thesis will present a study of what principles the four major Swedish banks have based their decision on when choosing what type of online access system to use. Furthermore try to present what the future principles might be toward online banking access systems. This might also show how new systems might look like and what the banks strives to achieve when making these systems not only safer but more available and usable. The thesis will present what authentication is and how the authentication process is used today. Today in general what is used is the two factor au-thentication which is based upon passwords. This two factor authentication makes it hard for attackers to breach the systems in use today, but there are ways which are emerging to gain access. Such an emerging threat is the SSL-evading Trojans. Still these kinds of threats are not common at all but they need to be considered. Today passwords are the only means we can use to make the authentication processes safe but they are not enough, according to Bill Gates. Therefore we have looked at new ways to complement today’s password based authentication processes; such compliments might be the use of biometrics, which seems to be an emerging technology.
This study have been a challenge from the beginning since we knew that this is a very in-tense subject for the banks to discuss and therefore we have had to be persuasive in many cases and let the banks answer anonymously to be able to gather as much information as possible from our sample banks. Furthermore we have collected up to date articles and studies to be able to get as accurate information as possible.
The main findings we have discovered is the trade-off between security versus availability and flexibility and these factors were the same no matter what online access system, PDA or smart card, they
have in use. But also that all the banks states that their authentication process is very safe and striving to become 100% secure, even though we have found new threats which is not of an authentication problem but a matter of transactional problem. The banks have shown through the interviews that they lack awareness of such a threat.
Adoption Issues of Internet Banking in Pakistani' FirmsUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Information Systems SciencesAUTHOR: Saadullah Khan; [2007]KEYWORDS: Internet Banking; Trust of the System; Security; Reliability; Risk; Response Time; Privacy; Firms; Pakistan;ABSTRACT: In the world of banking, the development in information technology has an enormous effect on development of more flexible payment methods and more-user friendly banking services. Electronic banking services are new, and the development and diffusion of these technologies by financial institutions is expected to result in a more efficient banking system. This technology offers institutions alternative or non-traditional delivery channels through which banking products and services can be delivered to customers more conveniently and economically without diminishing the existing services level. In recent years, almost one fourth Pakistani's banks have started to offer Internet banking services to their customers. The purpose of this research was to explore and analyze the issues that influence Pakistani's firms' intentions toward Internet banking services adoptions. Based on a detailed literature review, a research model was developed. Five sub issues were selected from system trust area in order to gain a better understanding of Internet banking service quality and customer thoughts about these services. A qualitative research approach was used to get a better understanding of theses issues. The empirical data were collected from three different Pakistani's firms by using questionnaires and consulting case-studies. Data analyses were done in accordance with the research questions and research model. The findings from respondent data show that they have greater level of worry regarding trust, and they do not have confidence to make any big financial transactions over internet, and have no satisfaction from Internet banking services. Thus lack of system security concerns as the prime reasons for slow adoption of Internet banking in Pakistani firms. Finally the results from respondents' data and conclusions were drawn by answering the research questions.
Prediction of customers' attitudes toward using internet banking in IranUniversity essay from Luleå tekniska universitet/Industriell ekonomi och samhällsvetenskap/Industrial marketing and e-commerceAUTHOR: Mojdeh Ghezelayagh; [2007]KEYWORDS: e-Commerce; Banking; Iranian banks; International services; Internet banking; Attitudes;ABSTRACT: Banking, one of the most information intensive sectors, is an ideal domain for the successful development of e-commerce. The present study focuses on e-commerce opportunities for improving customer services in the Iran banking sector. First part of this study reports on a survey of 31 top marketing and IT managers from three major Iranian governmental banks. The results indicate that the potential of e-commerce ranges from simple applications, such as giving information about services, to more sophisticated ones that involve customers in services design and customization. Suitable management actions are proposed to Iranian banks in order to fully benefit from the Internet. At present, one of the key challenges of the Internet as a service delivery channel is how banks manage service quality, which holds a significant importance to customer satisfaction. On the other hand, in this new era of cyberservice, marketing managers must reappraise their approach to marketing services in general and international services in particular. In the meantime, in the second part of this report, a large quantitative survey with customers has been conducted by testing and analysing the attributes which involve for customer attitudes toward using Internet banking. Based on a detailed literature review and frame of reference, a conceptual model of the adoption process for self-service technologies is developed and tested across Internet banking technology used in the banking industry. The Internet banking technology is relatively new to the Iran marketplace. Data were collected using a survey of 234 banking customers in a one-state area (Tehran) and analyzed using path analysis modeling. The results of the model tests on this technology provides evidence that different factors including: Ease of Use, Usefulness, Need for interaction, Risk and Cost with different degree of intensity influence attitudes toward using Internet banking and offers an explanation of the varying degrees of acceptance found among different type of customers. This research has demonstrated that multiple factors need to be considered when introducing new technology into the service encounter and that the salient factors may vary and their stages in the adoption process.
Internet Banking in Greece: Development, Evaluation and Perspectives
University essay from Blekinge Tekniska Högskola/Sektionen för Management (MAM)AUTHOR: Andreas-nikolaos Papandreou; [2006]KEYWORDS: företagsekonomi; business administration - international business; business administration - information;business administration - organization; internet banking; e-banking; online banking; distribution channel; financial services;greece;ABSTRACT: Revolutionary developments in marketing, information and communications technology continue to transform the banking and financial industry. Distribution of banking services through the Internet is an important part of this transformation. The objectives of this thesis are mainly to examine the role, which Internet banking can play as a new distribution channel of banking services for the benefit of both financial institutions and customers in Greece. The study explores the growth in on-line banking services and the ways in which financial institutions in Greece can take advantage of Internet technology to offer successful and cost-effective banking solutions. Moreover, this thesis addresses the key issues of concern to the banks regarding their strategic positioning and the products/services they offer or could offer on the Internet. Technology can help banks build an integrated delivery strategy for effective multi-channel management. Results identify the reasons why Greek banks use Internet banking and their effect and place an emphasis on the strategic impact of Internet technology as a core element of financial services. Greek banks want to expand their existing distribution channels using the Internet as another alternative channel. Internet banking in Greece is on its way to become the centerpiece of direct banking strategies.
Mobile Financial Services : Opportunities in Electronic Banking from Wireless Computing TechnologyUniversity essay from Högskolan i Jönköping/Internationella Handelshögskolan; Högskolan i Jönköping/IHH, Företagsekonomi; Högskolan i Jönköping/IHH, FöretagsekonomiAUTHOR: Anders Gustafsson; Mattias Wramsmyr; Mikaela Claesson; [2005]KEYWORDS: Electronic commerce; mobile commerce; electronic banking; mobile banking;ABSTRACT:
Bankindustrin är ett typiskt exempel på en industri som har tjänat otroligt mycket på information- och kommunikationsteknologiapplikationer. Dessa applikationer tar formen av Internet-baserad banktjänst, som inkluderar transaktioner av värdepapper, kontouppgifter, presentation av räkningar och betalningar samt transfereringar mellan konton och individer.
Mobila banktjänster är den naturliga förlängningen av dessa typer av tjänster. Med utvecklingen av digitala trådlösa teknologier, som mobiltelefonen, är mobil Internettillgänglighet nu förverkligad.
Denna uppsats undersöker den förändrande miljön i finansindustrin som uppkommit till följd av informationteknologier, och vidare de strategiska affärsmässiga överväganden som måste göras inom detta område.
En kvalitativ fallstudie ansågs vara den mest givande metoden att använda i vår forskning. Genom att undersöka marknade, genom att skicka ut en väl strukturerad enkät till tre av de största svenska bankerna (Nordea, SEB och Handelsbanken), med relevanta intervjufrågor angående deras involvering i mobila banktjänster, kunde deras potential avgöras. Intervjuerna utfördes sedan via telefon.
Vi drar slutsatsen att för att bli konkurrenskraftig i dagens värld av avancerade teknologier, är det avgörande att finansiella instutitioner positionerar sig genom att använda sig av sådana applikationer. Banker har de nödvändiga kapitaltillgångarna som krävs för att göra betydande investeringar i teknologisk infrastruktur. Om de inte hade anpassat sig till teknologier som bankomater, kreditkort, telefoner och Internet, skulle de lätt ha kunnat exkluderas från marknaden. Det är troligt att mobila banktjänster kommer att ha samma inverkan.
Financial Development and Economic Growth: The Case of Chinese Banking SectorUniversity essay from Lunds universitet/Nationalekonomiska institutionenAUTHOR: Katarzyna Burzynska; [2009]KEYWORDS: China; economic growth; Granger Causality; Financial Development; Banking Sector; Economics; econometrics;economic theory; economic systems; economic policy; Nationalekonomi; ekonometri; ekonomisk teori; ekonomiska system;ekonomisk politik; Business and Economics;ABSTRACT: China’s economy has developed rapidly since the introduction of market reforms in 1978. In parallel came the reforms within the financial sector and the most of financial intermediation between savings and investment has been channelled through the banking sector. Thus far studies on the finance-growth nexus in China have focused on the financial sector as a whole. This thesis aims to determine the impact of different banking institutions on economic growth and assess the compatibility of state financial policies with
country’s economic performance. The empirical analysis is performed using annual data for the period 1978 to 2005. Using the Granger-causality test procedure under vector autoregressive model I examine the relationship between economic growth and, respectively, different types of banks and different types of loans. The procedure provides evidence that presence and direction of causality is affected by the type of bank as well as type of loan. There is two-way causality between economic growth and policy banks as well as rural credit cooperatives. The development of state-owned commercial banks and other commercial banks merely follows economic growth. Furthermore, loans to construction sector Granger cause growth and there is a one-way causality between growth and loans to commercial sector. The fact that policy banks manage to positively influence China’s development might indicate that state policies concerning financial sector and economic growth are successful. However to sustain the growth it is important to further develop financial services, ensure better credit allocation and improve access to financing for private as well as small and medium-sized enterprises.
Impact of E- Banking on the Banking Industry An in-depth analysis of individual commercial banks and how they service their customers.13,765 words (approx. 55.1 pages), 31 sources, APA, 2006, $ 249.95Dissertation or Thesis # 75499 | details | Add to cart (you can always remove it later)
AbstractThis paper discusses individual commercial banks and how they service their customers. It analyzes the quality of banking services that a customer gets and how the services are provided to the customer. It describes the three main channels for banking today - through branches, through the internet and on telephone.
Table of Contents: Introduction Chapter I How Internet Banking Has Grown In The Last Decades, Especially
Regarding New Product Being Offered Evolution of Internet Banking Present Status and Profile of E-Banking Offered By Banks Nature of Product Offered Chapter II The Operations of Banks In Different Areas: What Is The Contribution? Effects of E-Banking on Banking Operations: What Is The Contribution of Internet Banking Toward The Business? Chapter III General Benefits of Banks From E-Business and Other Communication Performance Measurement Chapter IV Reality of System Risks and Control Conclusion
From the Paper"To understand the relationship that can develop between the Internet and banks, one has to first understand the nature of both these items. The first to be understood is the banks. So far as banks are concerned, at the beginning of the twenty-first century, central banking which is the source of all banking activity would appear to be at a crossroads in their future. Earlier it was the lender of last resort, active participant in stabilizing economic fluctuations, and now the present main function is being the guardian of price stability. As it is still the monetary authority, much is expected from them. At one stage, fiscal policy was considered to be the main instrument of economic policy, the situation changed to an ascendancy of monetary policy and that was noted by the late 1980s in most parts of the industrialized world. This had a lot of implications for the role of the central bank."
Online Banking in Britain A discussion of online banking in Britain, its problems as well as its advantages and security.1,881 words (approx. 7.5 pages), 10 sources, MLA, 2000, $ 60.95Essay # 11133 | details | Add to cart (you can always remove it later)
AbstractThis paper is a personal research project about online banking in the United Kingdom. It describes its history, how it works, security issues and its advantages and it introduces online banking facilities. It provides an appendix summarizing the services of each of the main British banks.
Table of Contents What is online banking? How online banking works The security of online banking The advantages of online banking The disadvantages of online banking Prediction of the prospects of online banking.
From the Paper"The online banking will be a step to a new stage in the future. By that time, the banks will definitely offering more attractive services online and the competition of online banking will be complicated because more banks will have online banking services. Another progression is the development of wireless banking such as Digital TV and Mobile banking or so called WAP (Wireless Application Protocol). Nowadays, mobile phones are used everywhere, and many leading telecom companies and software companies have joined the WAP forum. Such as Nokia, Ericsson and Motorola."
Future of Banking in India – Changing Imperatives Uploaded by tanujadunga (76) on Nov 28, 2006
EXECUTIVE SUMMARY
A healthy banking system is essential for any economy striving to achieve good growth and yet remain stable in an increasingly global business environment. The Indian banking system has witnessed a series of reforms in the past, like deregulation of interest rates, dilution of government stake in PSBs, and increased participation of private sector banks. It has also undergone rapid changes, reflecting a number of underlying developments. This trend has created new competitive threats as well as new opportunities. This paper aims to foresee major future banking trends, based on these past and current movements in
the market.
Given the competitive market, banking will (and to a great extent already has) become a process of choice and convenience. The future of banking would be in terms of integration. This is already becoming a reality with new-age banks such as YES Bank, and others too adopting a single-PIN. Geography will no longer be an inhibitor. Technology will prove to be the differentiator in the short-term but the dynamic environment will soon lead to its saturation and what will ultimately be the key to success will be a better relationship management.
OVERVIEW
If one were to say that the future of banking in India is bright, it would be a gross understatement. With the growing competition and convergence of services, the customers (you and I) stand only to benefit more to say the least. At the same time, emergence of a multitude of complex financial instruments is foreseen in the near future (the trend is visible in the current scenario too) which is bound to confuse the customer more than ever unless she spends hours (maybe days) to understand the same. Hence, I see a growing trend towards the importance of relationship managers. The success (or failure) of any bank would depend not only on tapping the untapped customer base (from other departments of the same bank, customers of related similar institutions or those of the competitors) but also on the effectiveness in retaining the existing base.
India has witness to a sea change in the way banking is done in the past more than two decades. Since 1991, the Reserve Bank of India (RBI) took steps to reform the Indian banking system at a measured pace so that growth could be achieved without exposure to any macro-environment and systemic risks. Some of these initiatives were deregulation of interest rates, dilution of the government stake in public sector banks (PSBs), guidelines being issued for risk management, asset classification, and provisioning. Technology has made tremendous impact in banking. ‘Anywhere banking’ and ‘Anytime banking’ have become a reality. The financial sector now operates in a more competitive environment than before and intermediates relatively large volume of international financial flows. In the wake of greater financial deregulation and global financial integration, the biggest challenge before the regulators is of avoiding instability in the financial system.
RISK MANAGEMENT AND BASEL II
The future of banking will undoubtedly rest on risk management dynamics. Only those banks that have efficient risk management system will survive in the market in the long run. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution.
Although capital serves the purpose of meeting unexpected losses, capital is not a substitute for inadequate decontrol or risk management
systems. Coming years will witness banks striving to create sound internal control or risk management processes. With the focus on regulation and risk management in the Basel II framework gaining prominence, the post-Basel II era will belong to the banks that manage their risks effectively. The banks with proper risk management systems would not only gain competitive advantage by way of lower regulatory capital charge, but would also add value to the shareholders and other stakeholders by properly pricing their services, adequate provisioning and maintaining a robust financial structure.
‘The future belongs to bigger banks alone, as well as to those which have minimised their risks considerably.’
CONSOLIDATION
Consolidation, which has been on the counter over the last year or so, is likely to gather momentum in the coming years. Post April 2009, when the restrictions on operations of foreign banks will go, the banking landscape is expected to change dramatically. Foreign banks, which currently account for 5% of total deposits and 8% of total advances, are devising new business models to capture the Indian market. Their full-fledged entry is expected to transform the business of banking in many ways, which would be reflected in terms of greater breadth of products, depth in delivery channels and efficiency in operations.
Thus Indian banks have less than three years to consolidate their position. Despite the stiff resistance from certain segments, consolidation holds the key to future growth. This view is underpinned by the following: ► Owing to greater scale and size, consolidation can help save costs and improve operational efficiency. ► Banks will also have to explore different avenues for raising capital to meet norms under Basel-II ► Owing to the diversified operations and credit profiles of merging banks, consolidation is likely to serve as a risk-mitigation exercise as much as a growth engine.
Though there is no confirmation yet, speculative signals arising from the market point to the prospect of consolidation involving banks such as Union Bank of India, Bank of India, Bank of Baroda, Dena Bank, State Bank of Patiala, and Punjab and Sind Bank. Further, the case for merger between stronger banks has also gained ground — a clear deviation from the past when only weak banks were thrust on stronger banks. There is a case being made for mergers between banks with a distinct geographical presence coming together to leverage their respective strengths.
GLOBALIZATION/ OVERSEAS EXPANSION
Growing integration of economies and the markets around the world is making global banking a reality. The surge in globalization of finance has already begun to gain momentum with the technological advancements which have effectively overcome the national borders in the financial services business. Widespread use of internet banking will widen
frontiers of global banking, and make marketing of financial products and services on a global basis possible. In the coming years globalization will spread further on account of the likely opening up of financial services under WTO. India is one of the 104 signatories of Financial Services Agreement (FSA) of 1997. This gives India’s financial sector including banks an opportunity to expand their business on a quid pro quo basis.
As per Indian Banks' Association report ‘Banking Industry Vision 2010’, there would be greater presence of international players in Indian financial system and some of the Indian banks would become global players in the coming years. So, the new mantra for Indian banks is to go global in search of new markets, customers and profits.
TECHNOLOGY
There is an imperative need for not mere technology upgradation but also its integration with the general way of functioning of banks to give them an edge in respect of services provided to their constituents, better housekeeping, optimizing the use of funds and building up of MIS for decision making, better management of assets & liabilities and the risks assumed which in turn have a direct impact on the balance sheets of banks as a whole. Technology has demonstrated potential to change methods of marketing, advertising, designing, pricing and distributing financial products and services and cost savings in the form of an electronic, self-service product delivery channel. These challenges call for a new, more dynamic, aggressive and challenging work culture to meet the demands of customer relationships, product differentiation, brand values, reputation, corporate governance and regulatory prescriptions. Technology holds the key to the future success of Indian Banks.
Internet, wireless technology and global straight-through processing have created a paradigm shift in the banking industry. The explosive growth of both the Internet and mobile and wireless technology is revolutionizing the way the financial industry conducts business. The overall wireless technology market is expected to grow profoundly in the coming years.
REGULATIONS
The RBI's approval for banks to raise funds abroad through innovative capital instruments holds great significance. Such fund-raising, which includes preference shares, will, however, not just substitute equity; it could have unintended consequences on the strategies of banks and their profitability. While the cost of raising monies through such instruments is likely to be higher (close to 10 per cent), the consequent higher leverage on equity funds is likely to result in expansion of return on net worth. This is because the same amount of capital supports a higher volume of business, generating higher profits. Banks are likely to be able to raise long-term preference shares at coupon rates between six per cent and eight per cent. The positive impact on bank profitability could thus be significant. Preference capital can be used as the currency for acquisition. The advantage for public sector banks is that they no longer need to bother
about government stake falling below 51 per cent. Banks such as Dena Bank, Oriental Bank of Commerce and Andhra Bank are most likely to benefit from this move.
SKILLED MANPOWER
There will be a sea change for employees too. Secure jobs will be replaced by contractual appointments, for a specified period of time. The unions will merge into the shadows and bank managements will turn effective. As a result there will be swifter turn over of personnel in banks. But at the same time, skilled personnel from other disciplines will enter banks in increasing numbers. Factors like skills, attitudes and knowledge of the human capital play a crucial role in determining the competitiveness of the financial sector. The quality of human resources indicates the ability of banks to deliver value to customers. Capital and technology are replicable but not the human capital which needs to be valued as a highly valuable resource for achieving that competitive edge.
Business model, which comprises a comprehensive range of business solutions delivered through a unique balance of portfolio and relationship management must be incorporated.
FUTURE CHALLENGES & SUGGESTIONS
Challenges ►Competition ►Customer Retention ►Globalization ►Shrinking Margin
Suggestions ►Strong In-house research & market Intelligence ►Focused marketing- Focus on region-specific campaigns rather than national media campaigns
The growth of the retail financial services sector has been a key development on the market front. Indian banks (both public and private) will not only be keen to tap the domestic market but also to compete in the global market place. New foreign banks will be equally keen to gain a foothold in the Indian market.
CONCLUSION:
What will the future of Indian banking and insurance look like? Will the reform in banking and insurance sectors face the same fate as in power and telecom? It is increasingly evident that the economy offers opportunities but no security! Therefore, the future will belong to those who develop good internal controls, checks and balances and a sound market strategy. Business Growth, Cost Efficiency and Evolution are therefore regarded as key drivers which will have to be addressed.
REFERENCES:
►http://www.thehindubusinessline.com/iw/2006/07/30/stories/2006073000260600.htm ►Rekha Arunkumar, G. Kotreshwar, Risk Management in Commercial Banks, Indian Institute of Capital Markets 9th Capital Markets Conference Paper ►Bajpai, G.N., Speech on ‘Banking, Insurance and Financial Sector: A vision of the Future’ ►http://www.blonnet.com/businessline/2001/08/09/stories/040941mn.htm ►Newspapers/Magazines – Business Standard, India Today ►Reports: PWC, FICCI _______________________________________________________________________
