Publish : 15 Nov, 2014 00:00:00Time saving technology and smart banking servicesSyed Mahmud Hasan (Tanim)

Technology in the banks is presently catching up with a high level of development around the world. Recent economic turmoil and increasing market complexity has placed unprecedented pressure on financial institutions. The demand for a digital lifestyle and the technological revolution it brings to homes and the workplaces, coupled with a significant demographic shift and a new regulatory framework, are subjecting the finance sector to a host of new challenges in a time of severe market uncertainty. However, it is in times such as these that opportunities arise for companies to step outside their comfort zones, fueling innovation on the financial services landscape.

In an attempt to optimize services and minimize costs, banks are frequently migrating towards a 24-7 service and customers are enjoying the greater sense of freedom that this creates. Availability is the name of the game as we demand instant access to loans, deposits and our account status.

So what is the next step? In a bid to drive even greater differentiation from the competition, financial services institutes are now exploring alternative banking channels, including the Internet banking (which customers can access anytime, worldwide), ATMs and Fast Tracks (providing cash and other services in selected locations in Bangladesh normally near customers’ homes, offices or other generally convenient locations for 24 hours a day, 365 days a year), sms/alert banking (which is accessible from anywhere in Bangladesh, 24 hours a day), POS terminals (used to charge a plastic card for payment of shopping/hotel bills from anywhere in the world), Mobile banking (which allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or tablet), Call Centres (providing services to customers over phone, available 24 hours).

These services save time and effort through smart banking activities while managing personal accounts and transactions.

Evolving Technology

The world banking sector has been revolutionized over the past 30 to 40 years by an onslaught of new technologies and a widespread change in the regulations governing the use of this technology. As a result, many banks have started adapting their distribution channels and shifting from frontal personal service to direct sales and marketing via phone, email or electronic transactions.

In Bangladesh, Foreign Commercial Banks (FCBs) including Standard Chartered Bank and HSBC are the leading banks to introduce technology driven banking services. These banks along with some other banks provide services like debit card, credit card, ATM, Point of Sale (POS) services, internet banking, mobile banking, Electronic Fund Transfer (EFT), any branch banking and so on. Most of the Private Commercial Banks (PCBs) are also providing these facilities but the state-owned banks are not improving with more rapid pace than other banks. All the PCBs are highly improving their service area through using modern technology to make customer service easy. Customers are now getting much easier access to the banking services due to development of main channels.

Technology driven service provided by banks in Bangladesh Development of main channels:

Internet banking system

Internet banking refers to the use of internet as a remote delivery channel for banking services which permits the customer to conduct transactions from any terminal with access to the internet. It is the WWW through which banks can reach their customers directly with no intermediaries. Internet banking is being provided by some banking services via internet that include account balance enquiry, fund transfer among accounts of the same customer, opening or modifying term deposit account, cheque book or pay order request, exchange rate or interest rate enquiry, bills payment, account summary, account details, account activity, standing instructions, loan repayment, loan information, statement request, cheque status enquiry, stop payment cheque, refill prepaid card, password change, L/C application, bank guarantee application, lost card (debit/credit) reporting, pay credit card dues, view credit card statement, or check balance.

ATM (Automated Teller Machine)

An automated teller machine (ATM), also known as an automated banking machine (ABM, Canadian English) is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions without the need for a human cashier, clerk or bank teller.

On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN).

By using an ATM, customers can access their bank deposit or credit accounts in order to make a variety of transactions such as cash withdrawals, check balances, or credit mobile phones. If the currency being withdrawn from the ATM is different from that in which the bank account is denominated, the money will be converted at an official exchange

rate. Thus, ATMs often provide the best possible exchange rates for foreign travellers, and are widely used for this purpose.

SMS and Alert Banking Systems

Considering the high accessibility of mobile phones in Bangladesh, banks have introduced SMS and Alert Banking for the convenience of customers. This has become a very popular and useful means of inquiring bank account information. Now with phones and without the need for a data connection, a customer can inquire about their account balance; view their last few transactions, transfer funds, pay utility bills and more.

POS (Point of Sales)

Point of sale (also called POS or checkout, during computerization later becoming electronic point of sale or EPOS) is the place where a retail transaction is completed. It is the point at which a customer makes a payment to the merchant in exchange for goods or services. At the point of sale the retailer would calculate the amount owed by the customer and provide options for the customer to make payment. The merchant will also normally issue a receipt for the transaction.

The POS in various retail industries uses customized hardware and software as per their requirements. Retailers may utilize weighing scales, scanners, electronic and manual cash registers, EFTPOS terminals, touch screens and any other wide variety of hardware and software available for use with POS. For example, a grocery or candy store uses a scale at the point of sale, while bars and restaurants use software to customize the item or service sold when a customer has a special meal or drink request.

Mobile Banking

Mobile Banking is one of the latest tools for easy and convenient banking in the current world. Mobile Banking is a banking process without bank branches which provides financial services to unbanked communities efficiently and at affordable cost. The banking and financial services provided are cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement. Day to day mobile payment and banking has become popular in Bangladesh. “Dutch-Bangla Bank Limited” (DBBL) has for the first time introduced its mobile banking service expanding the banking service from cities to remote areas. Currently many banks are providing this service and some banks are going to lunch this M-banking service. The most potential customers of mobile banking are rural people. About 35% of mobile banking consumers are highly satisfied with present mobile banking service.

Mobile Banking scenario of Bangladesh:

Tele Banking

Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. Telephone banking times can be longer than branch opening times, and some financial institutions offer the service on a 24-hour basis. From the bank’s point of view, telephone banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions.

Call Centers

First call center was launched in 1983 in the USA by MCI. This marked a shift by many organizations towards centralized customer service centers, often with an automatic reply service (IVR) incorporating voice recognition systems. However, despite these efforts away from personal interaction, the majority of call centre activities still involve human representatives, particularly when dealing with transactions.

Upcoming Channel

Home Banking

Home Banking is the banking service in which an individual or a business organization can get facility to beneficiary to banking transactions attending in his/her office or home. Different types of arrangement of electronic activities are - fund transfer, debit, credit, balance enquiry and credit applications etc. Internet is considered as important components in Home Banking. Different types of software packages encourage transaction to the customers.

Agent Banking

Agent banking is a new dimension for providing banking services. Agent banking is to provide banking services to the bank customers through the engaged agents under a valid agency agreement, rather than a teller/cashier. It is the owner of an outlet who conducts banking transactions on behalf of the concerned bank.

National Payment Switch (NPS)

NPS stands for National Payment Switch. Bangladesh Bank has decided to launch a new alternative delivery channel, which is very much wide and effective. This is called National Payment Switch (NPS). A customer of any branch of any bank will get the facility to transact from any branch of any bank. The main objective of NPS is to create a common electronic platform for the switches in Bangladesh. National Payment Switch

Bangladesh (NPSB) is a mother switch of all other switches in the country. NPSB will facilitate the expansion of the card based payment networks substantially and promote e-commerce throughout the country. Online payment of government dues, using cards and account number information through Internet will greatly be enhanced using NPSB. Payment Systems Department (PSD) is concerned to operate and settle the transactions regularly. NPSB was launched as “go-live” on December 27, 2012 to route ATM transactions.

Main Role of Channels:

Smart banking activities

Saving time

Non limitation in timeframe

Simplicity of transaction

Safety of transaction

Cost minimization

Smoothness in working

Accuracy in working

Step to develop the human resources

Building the right product mix

Attainment, status & performance of ADC

So if we want to go ahead and reach the door of 160 million (16 crore) people with services, we have to see the big picture of banking arena and extend the alternative delivery channels based on information technology. Thus banking sector in Bangladesh will achieve the goals and reach the stair of golden success.

The writer is a banker. E-mail mahmud_hvc@yahoo.com