emerging trends in banking industry

7/27/2019 Emerging Trends in Banking Industry

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BANKING TODAY-

REDEFINED AND

RE-ENGINEERED

INDIAN BANKING -

THE CHANGING LANDSCAPE


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AGENDA FOR THE SESSION

o To Sensitize the Participants to the Latest Changesin Banking Industry

o What is the Response to the Current Trends fromBankers and Customers?


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INDUSTRY PROFILE

Public Sector banks

Private Indian Banks New Generation Banks

Private Foreign Banks

Cooperative Banks

Non Banking Financial Institutions


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Banking Sector Reforms

Post-Liberalization

1st Narasimham Committee Report on

Financial Sector Reform 1991

Introduction of Capital Adequacy Norms and

Prudential Norms - 1992

Deregulation of Interest Rates, Prudential

Norms for Maximum NPA 1993

Introduction of Banking Ombudsman Scheme 1994


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Banking Sector Reforms

Post-Liberalization

Concept of Local Area Banks

Introduced 1995

1st

Shared Payment Network System &conditional autonomy to PSUs 1996

2nd Narasimham Committee Report of

Banking Sector Reforms 1997Guidelines on Risk Management 1998


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RECENT TRENDS IN BANKS Entry of New Generation Banks Change in the Process, Methods & Techniques

New Products and Services

Collaboration between Banking & InsuranceCompanies.

Improvement in Service Quality

Increasing focus on Retail Banking Shift Towards Branchless Banking


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CHANGING PERCEPTION OF

CUSTOMER

Servicing the Customer1950s to 1960s

Satisfying the Customer - 1960s to 1980s

Pleasing the Customer - 1980s to 1990s

Delighting the Customer -1990-2000

Retaining the Customer 2000 and beyond


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WHAT CHANGES ?

Electronic Fund Transfer (EFT)

Electronic Clearing System (ECS)

Automated Teller Machines (ATM)

Shared Payment Network System (SPNS) Credit Cards/ Debit Cards

Point of Sale Terminal

Tele-banking

Mobile Banking Net Banking

Electronic Data Interchange

Corporate Banking Terminals
http://localhost/var/www/apps/mari/BANK-PPT/eft.ppthttp://localhost/var/www/apps/mari/BANK-PPT/eft.ppt


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WHERE ARE WE GOING?

Anywhere Anytime Anyplace Banking

Timeless and Placeless Banking

Banking at Convenience

Good by to Traditional Instruments (Cheques&DD) & Invitation to new Instruments

Disappearance of Conventional Risk andArrival of New Risks

Leading to currency-less monetary system

Dismantling of Physical Structure


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WHAT IS THE TRIGGER?

Hyper Competition Shrinking Margins

Need to Reduce Cost

Take Advantage of Technology Changing Customer Expectations

Simplify the Procedure and Process

Reduce Traditional Risk

Offer Better / Improved Service

Some Constraints[Policy/Resources/Physical/Structure]


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Author for ChangePlayers in the Banking Business

Eco-System

Shareholders

Management

Depositors

Borrowers

Employees

Government

Regulatory Authorities RBI

Competitors


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PHASE OF TECH BANKING

PSB

PIB PFB

CB

NBFI

SBI, SBT ETC.

ICICI,IDBI,HDFC,UTI BANK ETC..

CITI BANK,SC BANK, ETC..

SCB,UCB,DCBs/SCBs

INDUSTRY


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SOME EARLY ADOPTERS

BANK____________

CHANNEL

HSBCBank

HDFCBank

UTIBank

CITIBANK

ICICIBank

ATM (No.) 250 500 550 174 1000

ATMShare(%)

40 50 NA 80 45

Other

Channel[%](mobile,phone, net)

35 15 NA 15 15

Branch

Banking[%]

25 35 NA 5 40


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STRATEGIES OF BANKS

Citibank: Parallel Banking

HSBC : Leveraging branches to grow C

ICICI B : Reducing importance of branch

HDFC B: Conservative migration

UTI B : ATMs as a force multiplier


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Issues and Challenges

What will happen to the traditional rural

credit institutions like, Cooperative

Banks, RRBs and Low performing

Public Sector Banks?

What are all the options for the Public

Sector Banks?


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Can the machines establish a strong

connecting link with customers?

Is the Convenience Banking good for all

segment and all seasons?

Is it not challenges the conventional wisdoms(keeping close contact with the customers)?


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Does IT confer Competitive advantage or is it

just the cost of staying in business?

How do we dispose the existing human

resource?

What are the new security issues?

Is this changes a customer demanded/bank

wanted? Are the customers happy andcomfortable with the shift?


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Electronic Fund Transfer

Transfer of funds between banks

located in different cities in place of

DD/MT/Telegraphic transfer.


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Electronic Clearing System

Facilitates inter-bank settlements -both Debit & Credit clearancesthrough INFINET.

CC: Companies who have to make bulkpayments to a large number of beneficiariesprepare the credit instructions on themagnetic media and submit the same to RBIfor payment.

DC: Payment to utility companies by banks

on behalf of the customers.


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Tele-banking

Using automatic voice recorder it

facilitates both cash & non-cash

transactions for the bank andcustomers.


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Automated Teller Machines

Device used for withdrawalof money, depositing ofmoney and balance enquiryand verification for 24hours of a day.


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Shared Payment NetworkSystem

Facilitates Use of ATMcards across participatingbanks at ATM centers usingMaster/Visa Cards. In caseof using other banks ATM one may have to pay servicecharges.


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Credit Cards/ Debit Cards

CREDIT CARD: It is a card that empowers the

Customer to spend up to the fixed value of

money limit fixed - A prepaid card.

DEBIT CARD: It is a post paid card and

money is transferred after the spending.


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Corporate Banking Terminals

Facilitates the Corporatecustomers to log on into the banksdata base and have access to theiraccount for balance verificationetc. with defined powers.


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Point of Sale Terminal

Computer terminal that is linkedonline to computerised customerinformation files that facilitatespurchase from retail shops as itcredits the retailer account online.


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Electronic Data Interchange

Transmit financialinformation and payments in

electronic form.- reducestransmitting cost and risk.


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THANK YOU

emerging trends in banking industry

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