The Future of On-Line Banking Global Trends and Local Prospects Presented by Sanjay Kao - Cards Business Manager & Marketing Head Global Consumer Bank

The Future of On-Line BankingThe Future of On-Line BankingGlobal Trends and Local ProspectsGlobal Trends and Local Prospects

Presented by Sanjay Kao - Cards Business Manager & Marketing HeadPresented by Sanjay Kao - Cards Business Manager & Marketing HeadGlobal Consumer Bank - EgyptGlobal Consumer Bank - Egypt

AGENDAAGENDA Defining On-line BankingDefining On-line Banking

The difference between PC banking and Internet Banking

The Importance of Online bankingThe Importance of Online bankingPro’s & Con’s

Past, Present & FuturePast, Present & Future Services OfferedUsage RatesFaced Problems, and problems solved

Citibank Citibank Global Presence and RoleFuture WorksLocal aspirations

EgyptEgypt

The Future of Online BankingThe Future of Online Banking

What is On-line BankingWhat is On-line BankingCONVENIENTCONVENIENT

FAST

CHEAPCHEAPINNEVITABLEINNEVITABLE


Why is it ImportantWhy is it Important

• For Customers:For Customers:• There’s a seemingly receptive audience out there waiting

• Most don’t feel the need to have a face-to-face conversation with tellers or think its important to have a checking account with a local branch office.

• For Banks:For Banks:• The most important reason being ECONOMICS.

• Each Internet transaction typically costs the bank one cent

• Compare that with 27 cents for each ATM transaction

• USD 1.07 every time you go up to a tellers window !!!


PC vs. Internet BankingPC vs. Internet Banking

• PC Banking PC Banking (also known as Home Banking):(also known as Home Banking):• The use of proprietary financial software running on a

computer in the home.

• Direct dial-in into the banks servers.

• Internet Banking:Internet Banking:• Similar in functionality to PC Banking

• Allows access through a browser eliminating the need for proprietary software

• Can be accessed through a regular Internet connection, through the sites public web site.


Past, Present & FuturePast, Present & FuturePast:Past:– No automated services, simple brochureware (1-7 pages of simple brochure ware)– This further developed into Detailed brochureware (5 or more pages of information; attractive branding)

Present:Present:– Interactive Bank (Includes formatted email service, online calculator)– Intermediate Cyberbank (Lets customers consult accounts online)– Advanced Cyberbank (Fully transactional for transfers, payments, sales)

Future:Future:– Interfaced Services (Banking services streamlined into other services, not limiting online banking to the

computer)


[[a] Services Offereda] Services Offered

Past, Present & FuturePast, Present & FutureThe Future of Online BankingThe Future of Online Banking

PastPast

PresentPresent

FutureFuture

Simple Simple BrochureBrochure

InterfacedInterfacedServicesServices

AdvancedAdvancedCyberbankCyberbank

IntermediateIntermediateCyberbankCyberbank

InteractiveInteractiveBankBank

AdvancedAdvancedBrochureBrochure

[[A] Services OfferedA] Services Offered

Services Presently AvailableServices Presently AvailableThe Future of Online BankingThe Future of Online Banking

Product / FunctionProduct / FunctionProduct / FunctionProduct / Function Standard ServicesStandard ServicesStandard ServicesStandard Services Advanced ServicesAdvanced ServicesAdvanced ServicesAdvanced Services

ATMsATMs

CheckingChecking

Credit CardsCredit Cards

Customer ServicesCustomer Services

Home Equity LoansHome Equity Loans

ATM locator with addresses Locator, Mapping and Pricing

Balance & transaction historyDownload to OFX enabled software

Animated report generationArchival searchesBill payment & presentment

Available credit & Tn. History Tn. History reportsSkip-pay & balance transfer Bill payment and cash adv.

FAQs and Emails/contacts Customer query formsReal time chat with CSRImmediate mail response

Rates & pay. CalculatorsBalance & Trans. History

Balance Transfer & LoanAdvance formsRate History

Investments Investments (non FDIC)(non FDIC)Yields, Prospectus & Sign-upForms

Portfolio trackingNews Alerts

Services Presently AvailableServices Presently AvailableThe Future of Online BankingThe Future of Online Banking

Product / FunctionProduct / FunctionProduct / FunctionProduct / Function Standard ServicesStandard ServicesStandard ServicesStandard Services Advanced ServicesAdvanced ServicesAdvanced ServicesAdvanced Services

Loan ApplicationsLoan Applications

MortgagesMortgages

Privacy/Security Privacy/Security

SalesSales

Savings/ CDsSavings/ CDs

Standard Online application Interactive Loan applicationInstant approvalApplication status tracking

Rates & Calculators Extra Principle payment formQuick home equity loanEscrow account analysisRefinance analysisHome value reports

Info. On how to order credit reports

Credit Report accessBank branded cybercash walletsZero liability for e-commerce

Online applications Remembered data inputs

Rates; Savings/Retirement calculators

Automatic savings plans that can be fine-tuned on the Web

Services of the FutureServices of the Future

•PUSHPUSH services -services -alerts, emails, webcasting, outbound alerts, emails, webcasting, outbound

messagingmessaging

»BILL Presentment & AUTOMATED PAYMENT PROCESSINGAUTOMATED PAYMENT PROCESSING

– Privacy ProtectionPrivacy Protection

&& Fraud-prevention servicesFraud-prevention services


Services of the FutureServices of the Future

•WebTVWebTV

set-top boxes & built-in capabilitiesset-top boxes & built-in capabilities

» Email Phones, Voice recognition for the web & Out - of - home UsersOut - of - home Users

– Cellular Financial ProcessorsCellular Financial Processors LinkingLinking Banking with GSMBanking with GSM


Past, Present & FuturePast, Present & Future[[b]b] On-line Banking Penetration in U.S HouseholdsOn-line Banking Penetration in U.S Households


5 5 MMMM

199719979 9 MMMM

19981998

15 15 MMMM

19991999

22 22 MMMM

20002000

28 28 MMMM

20012001

Past, Present & FuturePast, Present & Future

[b][b] Usage Rates in EuropeUsage Rates in Europe

Europe’s Top Web MarketsCountryCountry Internet PopulationInternet PopulationGermany 7.6 million

U.K. 5.5 million

France 2.3 million

Netherlands 1.5 million

Spain 1.1 million

Italy 1.0 million

Belgium 660, 908


•52% 52% of the 863 European Bank Internet sites are “Advanced Cyberbanks”of the 863 European Bank Internet sites are “Advanced Cyberbanks”•16% of the 1, 676 US sites are “Advanced”16% of the 1, 676 US sites are “Advanced”

Past, Present & FuturePast, Present & Future[[c] On-line Banking Problemsc] On-line Banking Problems


On-line bankers need & want the following 5 features:

[a] A sophisticated security system[a] A sophisticated security system• Security is probably one thing that holds potential customers from signing

up• It is also the main concern of current e-bank customers

[b] Low fees[b] Low fees• Generally speaking, Internet Banking is cheap, with an average fee of $5• When it comes to PC banking, its FEES GALORE!!

[c] Real-time information & detailed account info.[c] Real-time information & detailed account info.• E-Banking customers expect transactions to happen instantly, but with most

banks a transaction would take a full day to clear

[d] 24 Hour customer service features & duplicated branch banking[d] 24 Hour customer service features & duplicated branch banking• Quick responses to e-mail/ chats with CRS & FAQ’s are a challenge

[e] Wide array of products[e] Wide array of products• Many banking products can’t be bought online without having to pick up

the phone, walk to the nearest branch, or wait for a sales associate to call.

Past, Present & FuturePast, Present & Future[[c] Problem Solutionsc] Problem Solutions


[[a] A sophisticated security systema] A sophisticated security system• A password to log in; A Firewall; 75 or 128-bit encryption technology

[b] Low fees[b] Low fees• Removal of monthly/ subscription fees, and shrinking transaction fees

[c] Real-time information & detailed account info.[c] Real-time information & detailed account info.• Real time update of account balances and transaction logs• Unlimited number of preset bill payments - automatic at specific day of

every month• Automatic transfers on preset dates, instant cheque book balancing

[d] Wide array of products[d] Wide array of products• Instant on-line approvals to applications• Fully automating internal fulfillment processes to further allow additions of

online products

Citibank on Online BankingCitibank on Online BankingCASE STUDYCASE STUDY


• Started e-banking in 1984• It was a PC banking service offered by dial-ins to Bank server• Started Internet banking 2 years ago• Major Project “Direct Access”• Internet sites for 33 countries, 11 of which have Internet Banking• 5 - 7% of all US customers are using the Internet Banking

service• Maintain higher balances• Higher Loyalty• Better overall relationship with the bank

• By September ‘98, Asia region acquired 7000 new customers through the Internet

• Within a couple of months of the launch of “Direct Access” in the UK, 15000 new customers acquired through the new service.

Egypt’s ReverieEgypt’s ReverieThe Future of Online BankingThe Future of Online Banking

• Dramatic reduction in access costs should attract more peopleonline

• The service will be surprisingly welcomed…

A quote from John L. Campbell, CEO of First Community Bank of East Tennessee, and his reaction of the town’s 4,800 residents banking habits:

“ “ I thought in rural Tennessee we would not be confronted with Internet banking in my lifetime. I was wrong.”


On-Line Banking is the kind of On-Line Banking is the kind of breakthrough service, like ATMs, breakthrough service, like ATMs,

that will have the users that will have the users reminiscing in the Year 2005…reminiscing in the Year 2005…

““Wow, how did I ever Wow, how did I ever manage manage

without it?”without it?”

Documents

The Future of On-Line Banking Global Trends and Local Prospects Presented by Sanjay Kao - Cards Business Manager & Marketing Head Global Consumer Bank