Banks – anytime, anywhere
Banks – anytime, anywhere
Banking in India has experienced a rapid transformation, especially with LPG model in the 1990s. Just about a decade back this sector was restricted to nationalized banks and cooperative banks. Then came the multinational banks. The opening of the Indian banking for private parties backed by the IT sector proved to be a big push for financial resources mobilization. Many financial institutions (such as HDFC and ICICI) and non-financial institutions like GIC, LIC, UTI, organizations of pension and pension fund and other financial institutions as IDBI, IFCI and NABARD into the banking arena. Now today the banks have to do much more than just provide a multi-channel service platform to its customers. There are a lot of questions, as the bank management has to keep in mind before the future planning. Banks have a lot of challenges to meet, there are as below.
Cost: - It is important to cut costs of operation in order to increase profits. Because in an era of competition it is essential to reduce the operating expenses to survive in the market.
Product Differentiation: – Private banks such as ICICI, HDFC and Axis bank etc. introduced product differentiation through specialization, new products and add value. Specialization basically means that the bank becomes involved only in selected areas such as housing finance or restrict service to business or handling only certain sets of of portfolios. Above all, it was the compliments in the form of respect for clients, discipline, long working hours, absence of strike by employees.
Customer-Centric: – Indian banks have realized that focusing on customer-oriented services. While banks have to ensure product superiority and operational excellence, but the biggest challenge is to establish customer intimacy. No doubt the real power comes from operational excellence and understanding with clients. Customer Relationship must be managed in the best possible way. The increase on good customer base and their retention will provide better income opportunities capability. Because the majority of revenue comes from existing customers rather than new customers.
Information Technology is critical: – It's use in the banking sector is the primary reason why the new private banks and multinational banks have been able to survive and compete. Majority of banks are exploiting the cheap channels such as ATM and Internet banking to the optimum level, which contributes to reducing operating costs. These channels help to reduce traffic from branches. In reality, the transaction costs of these channels is lower than it does in the branches themselves.
Developer Information: – Banks are trying to make the customer banking experience more convenient and effective. Banks are now moving from branch bank to bank. Banks now working on the basis of IP-based networks. IP-based networks to improve efficiency and productivity. IP-based networks allow a bank to offer more services in the same network resulting in savings.
Redefining Purpose: – To meet rising costs and high competition and to sustain new customers, banks have started venturing into newer areas. This is one of the main reasons why banks are focused on retail banking in a big way. Lower NPA (Non-performing assets) in retail banking. CRM if implemented and integrated correctly can be very helpful in improving customer satisfaction levels.
Information Technology has completely revolutionalised banking. Information technology has opened new markets, new products, new services and effective distribution channels for banking. Online electronic banking, mobile banking and internet banking are just a few examples. Information technology has also allowed the banking sector with the necessary resources to handle the challenges of the new economy represents. It has been the cornerstone of the recent financial sector reforms aimed at increasing the speed and reliability of financial transactions and initiatives to strengthen the banking sector. IT revolution has set the stage for unprecedented increase in financial activity across the globe. Technological advances and development of worldwide network has reduced the cost of global funds transfer. It is information technology, which enables banks to meet these high expectations to customers who are more demanding and are also more technically-savvy compared to their counterparts in years yesterday.
They demand instant, whenever and where any banking facilities. It has also been instrumental in finding solutions to the banks to take care of their accounting and back office requirements. Information technology facilitates introduction of new distribution channels in the form of ATMs, net banking, mobile banking and the like. Banks are increasingly linking their computer systems not only across departments in a city but also to other geographical areas with high speed network infrastructure and setting up local area and wide area networks and connecting them to the Internet. As a result of the information and networks are now exposed to a growing number. Now the IT sector has developed a lot of IT products to banking, used to To facilitate bank transactions.
Internet Banking – Internet banking is simply banking through the Internet. It is also known as net banking income. The common features fall broadly into several categories, which account to account transfer, paying a bill, transfer of funds between two accounts, purchase or sale of investments repayment of loans, issuance of bank statements and financial institution management. Some online banking platforms support account aggregation to allow customers to monitor all their accounts in one place, whether they are with their main bank or with another institution.
Credit Cards: – A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card which entitles the holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card will have a line of credit to the consumer from which the user can borrow money to pay for merchant or as a cash advance for the user. Once the purchase is made credit card holder agrees to pay the card issuer. He consents to pay by signing A receipt with a record card details and indicating the amount payable by entering a personal identification number.
Mobile Banking: – Mobile banking, which is also known as M-Banking, SMS banking, etc. is a term used for performing balance checks, account transactions, payments etc. via a mobile device, such as a cell phone. Mobile banking today mostly done via SMS or mobile Internet, but can also use special programs called clients download to the mobile device. It refers supply and availability of banking and financial services using mobile telecommunication devices. The scope of services offered may include facilities to conduct bank and stock market transactions to manage accounts and access to tailored information.
Telephone Banking – Telephone Banking is a service provided by a financial institution which allows its customers to perform transactions over the phone. Most telephone banking uses an automated answering system with phone keypad response or speech recognition capabilities. To ensure security, the customer must first be approved through a numeric or verbal password or through security questions asked by a live representative.
Smart Money Card (debit card): - A Smart Money card is a form of chip cards which are built with smartcard is any pocket sized card with embedded integrated circuits which can receive input which is processed and deliver outputs. Smart Money cards contain only non-volatile memory storage components and also some security logic. This card is equipped with a hologram to prevent forgeries.
Bank @ Home: – Now, today's banks in the home delivery services, like other companies. Today banks offer special facility to retrieve heavy cash directly from the customer's home or deliver heavy cash directly into the customer's home. This is called the bank back home. The customer need not physically go to the bank. This facility is provided for a particular customer, dealing with the bank on a daily base, and who the transaction amount is heavy.
Railway or Airline Ticketing: - Bank offers its customers the option to purchase rail or air tickets through their deposits in the bank by using the Internet. Customers can buy railway or air tickets electronically using their debit or credit card.
Bills and Tax Payment: – Today offers banking facilities to its customers to pay bills directly through the bank account using internet facility. These bills can be electricity, water rates or mobile, etc. Also we can pay income tax or sales tax or VAT to the government via the bank account using their bank identification number or password.
Shopping: - Customers of the bank to buy anything, anywhere using smart cards issued to them. They need not carry hard cash with them. You can buy a product or a service and can pay the bill on same at these cards. The Bank gives special type of machine for selling or owner of showrooms that can swipe these cards on this machine, and it automatically deducted from customer's account.
Online Recharge: – Now bank provides all types of services to its customers, which include online recharging too. Customers using prepaid connection can recharge their mobile directly by visit the website of the provider company and provide details of their bank account.
Bolt Cash: - Cash on tap is a facility to take cash directly from ATM using the card. This facility is 24 hours and 7 days available. The customer can withdraw the amount from the Automatic Teller Machine by inserting their card, and the following special instructions. ATM provides us with hard cash like a tap allows water by turning it.
Forex CARDS: — Foreign exchange is called forex cards. These cards are intended for those who often keeps go abroad. The customer can deposit the amount to the bank where he has account and the bank gives him in exchange forex cards. These cards can be used abroad, where the customer can get foreign currency the nation.
In summary we can say that information technology is the backbone of the banking sector at present. Armed with a technology backbone bank will be the best business model for the management of liquidity, confidence and risk.
About the Author
Author is Lecturer in Ferozepur Institute of Management at Ferozshah (Ferozepur) in Punjab.
Author can be reached at adarshpreetmehta@gmail.com or 98885-54328
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