trends in B & I

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Trends in



MEANING OF TREND

THE GENERAL DIRECTION OF A MARKET OR

OF THE PRICE OF AN ASSET.

TRENDS CAN VARY IN LENGTH FROMSHORT, TO INTERMEDIATE, TO LONG TERM.

IF YOU CAN IDENTIFY A TREND, IT CAN BE

HIGHLY PROFITABLE, BECAUSE YOU

WILL BE ABLE TO TRADE WITH THE TREND.



MEANING OF BANK

AN ESTABLISHMENT AUTHORIZED BY AGOVERNMENT,

TO ACCEPT DEPOSITS,

PAY INTEREST,

CLEAR CHECKS,

MAKE LOANS,

ACT AS AN INTERMEDIARY IN FINANCIAL

TRANSACTIONS,

AND PROVIDE OTHER FINANCIAL SERVICES

TO ITS CUSTOMERS.



TYPES OF BANKS

Types of Banks

Central Bank Development Banks Specialized Banks(RBI, in India) (EXIM Bank

SIDBI, NABARD)

Commercial Banks Co-operative Banks

(i) Public Sector Banks (i) Primary Credit Societies(ii) Private Sector Banks (ii) Central Co-operative Banks

(iii) Foreign Banks (iii) State Co-operative Banks



FUNCTION OF BANKS Th

e functions of commercial banks are of two types.

(i) Primary functions

a) Accepting deposits; and

b) Granting loans and advances.

(ii) Secondary functions

a) Issuing letters of credit, travelers cheque.

b) Providing customers with facilities of foreign exchange

dealings.

c) Providing consumer finance for individuals



ROLE OF BANKING

It encourages savingsh

abit amongst people.

Acts as an intermediary between people having surplusmoney and those requiring money for various business

activities.

Provides loans and advances to businessmen for shortterm and long-term purposes.

Helps in raising the standard of living of people, byproviding loans for purchase of consumer durable goods,houses, automobiles, etc.



DISTINCTION BETWEEN BANKS AND

MONEYLENDERSBasis Banks Moneylenders

1. Entity Organized institutions. Unauthorized individuals.

2. Activity Acceptance of deposits as well as

lending of money.

May not include acceptance of

deposits.

3. Clients Meet the needs of people in

general and the business

community in particular.

Meet the needs of agriculturists

and poor people.

4. Security Banks accept tangible and

personal security against loans.

Accept gold, jewellery or land as

security for giving loan.

5. Process of recovery of

loans.

Flexible. Rigid and strict.

6. Interest Rate Interest charged by

banks on loan is governed by RBI.

Rate of Interest is decided by

the moneylender and is

normally very high.



EMERGING TRENDS IN

TECHNOLOGY ADOPTION BY INDIAN BANKS AND IT



INTRODUCTION

Technology has become the driver of the Indian bankingbusiness since the past decade with the financial sector

reforms providing firm foundation.

The question of implementing technology has now

transformed into the cost per transaction through a branch,

ATM and Internet works out to about Rs.66, Rs.22 and

Rs.10 respectively.

Technology has resulted in improved quality of service, any

time/any where banking and better service.



STATUS OF IT ADOPTION BY

BANKS

The foreign banks operating in India made the beginning

and the new private sector banks aggressively started

pursuing technology-based service offering.

The technology adoption by sectors and their swift

adoption by the competitors since the middle of the past

decade have forced these banks also to get into the act by

beginning to offer IT-facilitated products and services.

There are over 11,000 ATMs across the country and 11

million net connections with around 23 million users.



TRENDS AND OPPORTUNITIES T

ech

nologyh

as enabled th

e banks to conceive deliver,manage and integrate their products in line with thecustomers' need.

A range of services is now provided to both

retail andcorporate customers

The day is not far off when the banks would be viewed

more as technology companies offering banking productsand services and services.

More technology spends are expected in the near future on

various other areas.



CHALLENGES

While development in technology have thrown-up an array

of opportunities for the banks, they have also brought

along a whole set of challenges to deal with.

As the life cycle of the technological products is becoming

shorter, banks have to consider the costs of huge

investments made in the hardware and software their

expected benefits.



Unfortunately, the response of the customers to the

services offered through the new channels can be

fickle. For example, as per a survey conducted

sometime ago by C Fore for Outlook Money in the four

metros and Bangalore, 63% of the respondents used

ATMs while 80% went to branches. The utlisation of

tele/net banking was just around 4%.



Lets take a look at the following

banking trends

1. E-banking (Electronic Banking)

2. Social Media

3. An Age of Transparency4. Savings Growth

5. Female Centric Banking

6. Digital Signage7. Personalization



1. E-banking (Electronic Banking)

Automated Teller Machine

Debit Card

Credit Card Net Banking

Phone Banking

The banking industry needs to be innovative in

service offerings



2. Social Media

Bank of America was the first bank to provide

customer service via Twitter and in review of the

site, many of the same questions asked byfollowers are like those I would typically ask via

telephone banking or in person at the branch.



3. An Age of Transparency

More and more banks are creating a welcoming

and very transparent space. Gone are the days

of floor to ceiling marble, dark mahogany officefurniture and hidden vaults.

Design firms across North

America areintroducing more glass, open office spaces and

meeting rooms.



4. Savings Growth

Banks across North America have come up with instant savings campaigns to hopefully have clients,Buy into savings where many banks are putting upto an extra $250 in the pockets of their most loyalsavers.

Campaigns such as the Keep the Change from Bankof America, rounding up and rounding yourPurchases change into your savings account.

MyBankTracker.com states this ad campaign was

based on research that shows during such a time of financial Crisis, people are less interested in biggerpicture ideas but rather straight forward ways theirbank can help them save money.



5. Female Centric Banking

Women are becoming a very dominant player in todayssociety and this calls for action by many of the retail

banks around the world.

In South Africa and Australia, 1st forWomen is the first

home and car insurance designed specifically for

women.

Campaigns today, such as Citi banks, Dividends are a

girls best friend.



7. DIGITAL SIGNAGE

Digital signage can be used for many different purposes.

LCD screens are an easy and somewhat inexpensive

solution to provide public info, relay corporate messages,

sell products, solidify a brand, influence customer behavior,and enhance the environment with wayfinding more so

than the typical poster.

These screens themselves become a fun interactive way for

children, teens and young adults to use within the

retail-banking environment.



8. PERSONALIZATION The ability to identify each consumer with unique identifiers with use

of such technologies as Bluetooth, face recognition software andcredit cards, to name just a few have increased the ability of

identifying unique behaviors of customers.

The key leading edge of personalization is the move toward masscustomization in order to gain greater market share within the

manufacturing and service industry. Mass customization, the ability

to provide products and services tailored to the specific needs of

customers started within the technology industry.

of IT companies as other industries such as financial institutions have

recognized the benefits of offering tailored products and services to

their customers.



CONCLUSION1. E-banking has made life more convenient, however if not executed properly it could

come across as fake and unsecure2. Social media will help promote a brand, but if the customer service isnt there to back up

the new trend then customers might take advantage of the open door policy

3. Transparency throughout the banking world is now demanded by the North Americanconsumer and this changes the environment in which we do our banking

4. Savings growth is an automatic solution for those who have trouble saving

for potential emergencies5. The female shopper is playing a stronger role in the financial game of life and has caused

the male dominated board to rethink offerings for a different kind of consumer

6. Digital signage is presenting new and efficient ways to market a brand, but if the contentisnt developed properly the tech savvy consumer will see right thru the smoke andmirrors

7. Personalization will be the standard in how to engage and build brand Loyalty Life is

moving quickly and the retail banking industry needs to be innovative in what they offerand detailed with their goals to maintain relevancy and success in todays rapidlychanging marketplace. The next time you go to your bank Iurge you to ask yourself areyou another account number or is your bank a financial partner you can trust?



CUSTOMER ACQUISITION COST IS FAR

HIGHER THAN RETENTION COST,

SO INSTEAD OF LOOKING FOR

NEW CUSTOMERS, IT MAKES MORE SENSEFOR A BANK

TO ENGAGE AN EXISTING CUSTOMER

IN MULTIPLE SERVICES.





MEANING OF INSURANCE

A PROMISE OF COMPENSATION

FOR SPECIFIC

POTENTIAL FUTURE LOSSES

IN EXCHANGEFOR A PERIODIC PAYMENT.

INSURANCE IS DESIGNED

TO PROTECT THE FINANCIAL WELL-BEING

OF AN INDIVIDUAL, COMPANY OROTHER ENTITY

IN THE CASE OF UNEXPECTED LOSS.



EXAMPLES INCLUDE :

CAR INSURANCE,

HEALTH INSURANCE,

DISABILITY INSURANCE,

LIFE INSURANCE,

AND

BUSINESS INSURANCE



HISTORY OF INDIANINSURANCE



BRITISH-INDIA PERIOD Insurance in India started in the nineteenth century.

British insurance companies dominated the market servingmostly large urban centers.

Company started by Europeans in Calcutta was the first lifeinsurance company on Indian Soil.

Bombay Mutual Life Assurance Society indicated the birth of

first Indian life insurance company in the year 1870.

Till the end of nineteenth century insurance business wasalmost entirely in the hands of overseas companies.



Liberalization of Indian Insurance

1994 : Insurance sector invited private participation toinduce a spirit of competition.

1997 : Insurance regulator IRDA was set up.

a) To provide greater autonomy to insurance companies inorder to improve their performance.

b) To Protect the interest of holders of insurance policies.

c) To end the monopoly of the Life Insurance Corporation of India and General Insurance Corporation and itssubsidiaries .



In the first year of insurance market

liberalization (2001) as much as 16 private

sector companies including joint ventures with leading foreign insurance companies have

entered the Indian insurance sector. Of this, 10

were under th

e life insurance category and sixunder general insurance. Thus in all there are 25

players (12-life insurance and 13-general

insurance) in the Indian insurance industry till

date.



INDIAN INSURANCE IN 21ST CENTURY

2000 : IRDA starts giving licenses to private insurers : ICICIprudential and HDFC Standard Life insurance first private

insurers to sell a policy .

2001 : Royal Sundaram Alliance first non life insurer to sell apolicy.

2002 : Banks allowed to sell insurance plans.

2007 : First Online Insurance portal, set up by an Indian

Insurance Broker, Bonsai Insurance Broking Pvt Ltd.



INSURANCE TRENDS IN INDIA

Due to de-regulation in Indian Insurance industry, themonopoly of public sector companies in life insurance andgeneral insurance has come to an end.

Due to this innovative practices initiated by the privateplayers.

Growth in the technology such as internet has further

created a wave of excitement in the insurance market.

Indian economy and Indian Insurance sector is committedto a double digit growth.



Insurance is a Rs 450 billion industry in India. Indian Insurance market was at its all time high in 2003

with a growth of about 17.4% over the pervious year.

Since 2001 Insurance is growing at the rate of 15-20 %

annually.

The gross premium as a percentage of the GDP has gone up

from 2.3 in the year 2000 to 4.8 in 2006.

Together with banking services, it adds about 7% to thecountrys GDP.



ONLINE INSURANCE IN INDIA

Internet access in India has doubled every year over the

last five years.

According to emarketer report on India online, in 2007,

about 33.2 million people in India accessed internet and

thats about 2.9% of Indian population. This figure is going to be 71.6 million people, which will be

about 6% of population by 2011.

The insurance portals that are active in online distribution

are www.icicilombard.com, www.bajajallianz.co.in,www.insurancemall.in, www.bimaonline.com,

www.insurancepandit.com.



The insurance portals that are active in online distribution

are :-

www.icicilombard.com,www.bajajallianz.co.in,

www.insurancemall.in,

www.bimaonline.com,

www.insurancepandit.com.

The policy details are stored digitally and all transactions

are made over secure channels.

E-insurance offers a new gateway of incomes and

provides additional market penetration.



TREND IN 2011



Life Insurance

The changes in ULIP structure will make it more popular in2011.

The term insurance may get cheaper as the premium is

inversely proportional to the life expectancy.

Your approach:

ULIP has become more attractive and hence it will be a

good idea to take ULIP for long term. You should take insurance from a stable insurance provider

as this sector will see stupendous growth and new players

entering the market.



Medical Insurance:

Because of rising medical costs and claims, the costs of insurance will go up.

There will be huge competition in health insurance areabecause of new players, both domestic and overseas.

There may be few insurance companies offering health insurance at cheaper rates but that will only be to attract

customers.

There has also been discussion to introduce new health insurance products for luxury treatment aimed at high incomegroup.



Your Approach

Take health insurance because of coverage and not becauseof the low insurance premium.

These low premiums will not sustain in long run and the

insurance company will increase the premium in 1-2 years.

Dependence on employer insurance may not be a good

idea.

You should check the insurance coverage provided by

employer and decide accordingly.



HOME INSURANCE

Th

ish

asn't yet penetrated th

e Indian market. However, banks are slowly realizing the importance of

home insurance.

Banks have planned to make home insurance compulsory

before they approve the home loan. We will see tremendous change in home insurance plans.

You Approach:

It is a good idea to insure your home but see the detailsand clauses of insurance.

Take it only if you think it really insures your home against

any eventuality.



AUTO INSURANCE:

Auto insurance will see more players into picture. There will be demand for comprehensive insurance

package because of increased number of vehicles

on the road.

Your Approach:

You should focus on getting a comprehensive auto

insurance package.

If you are a careful driver, you may increase the

deductible to lower the premium.



OTHER TRENDS

We can expect few insurance companies to go IPO in 2011.

IPO will make insurance providers more transparent in their

numbers and will help the customers in selecting insurance

providers.

The insurance industry will also see increased interest inIndia by insurance providers around the world.

We should expect customized insurance for specific needs

of people.

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trends in B & I