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Next Generation Online Islamic Banking Portals

Next Generation Online Islamic Banking Portals

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Published by Infosys
This white paper discusses the online Islamic banking portals and the 10 incremental innovations to redefine online Islamic banking
This white paper discusses the online Islamic banking portals and the 10 incremental innovations to redefine online Islamic banking

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Published by: Infosys on Sep 13, 2013
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09/13/2013

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Next generation online Islamic
 
banking portals
 
Thought Paper 
 
www.infosys.com/finacle
 
Universal Banking Solution | Systems Integration | Consulting | Business Process Outsourcing
 
 
Next generation online Islamic banking portals
 
Islamic Banking is set for a steady growth, with
 
global assets expected to cross $2 trillion by
 
2015. Research suggests that half of the global
 
population that follows Islam would opt for 
 
Islamic finance, if Islamic Banks offer advanced
 
and innovative services as provided by
 
conventional banking services.
 
The state of online Islamic banking today
 
Conventional banks have heavily invested on
 
digital channels which has transformed the way
 
they offer banking services to their customers.
 
They have reached a state where customers
 
are able to do financial and non-financial
 
transactions online, wherever they are, thanks
 
to internet banking and mobile banking. Digital
 
consumers prefer doing their own research
 
before taking a decision on the best suited
 
product or service offered by their banks. They
 
can interact or set up a meeting with their 
 
relationship managers online, through unified
 
communications technology.
 
Very few Islamic banks are offering customer 
 
service through digital channels. Majority of 
 
the customers still seem to prefer the brick and
 
mortar structure than any other channels.
 
While basic services like account inquiry and
 
transfers are offered online, interactive and
 
advanced services are yet to be offered through
 
online channels. Research however shows that
 
online Islamic banking is poised to take a big
 
leap forward in the coming years.
 
10 incremental innovations to redefine
 
online Islamic banking
 
While research indicates that there is a huge
 
market for Islamic Banks, it is necessary that
 
they embrace digital channels too to attract and
 
retain their customers. Internet browsing speed
 
is improving day by day. Newer devices and
 
gadgets are being launched every day. And the
 
tech savvy digital consumer is ever ready to
 
adopt anything that makes life easier. The time
 
is just right to tap these technological advances
 
and fulfill the ever increasing needs of the
 
digital generation.
 
Let us explore 10 incremental innovations that
 
would define the next generation online Islamic
 
banking portals and provide a differentiated
 
customer experience to increase loyalty and
 
customer satisfaction index. Many of these steps
 
have been tried and tested in conventional
 
banking and have proved to be successful in
 
delighting customers. They would definitely
 
bring in similar benefits when implemented in
 
Islamic Banking as well.
 
1. Multi-channel banking
 –
Banks and financial
 
institutions offering Islamic banking have to
 
open up more touch points to customers.
 
Let the customer bank anytime and
 
anywhere, with any electronic device they
 
have
 –
be it desktop, laptop, tablet, mobile
 
phone, television or even their play station.
 
02
 
Thought Paper 
 
 
Transaction volumes are bound to increase
 
with increasing ease of access to banking
 
services. Funds transfers, payments, bill
 
payments, inquiries and service requests can
 
be initiated online, without having to go
 
to a branch. Customer origination, account
 
origination and verification procedures can
 
also be initiated through online channels
 
and can be completed through call center 
 
or branches. Conventional bank branches
 
haveachievedsignificantproductivity
 
improvements by launching online channels.
 
Branch staff can divert their attention to
 
other critical tasks, which mandatorily needs
 
human intervention.
 
2. Product catalogues
 –
Share products and
 
services related information online. Let
 
customers know when their bank offers new
 
products, along with product details. Allow
 
them to select products they are interested
 
in and analyze them before deciding the
 
best option suited to their needs. Making
 
information accessible, along with rich
 
graphical user experience, goes a long way in
 
enticing customers.
 
3. Customer acquisition - Many banks in
 
advanced countries have already made a
 
move towards online account opening and
 
customer acquisition. Prospects can view the
 
products online, and apply for products by
 
providing necessary identification documents.
 
The entire process, including application
 
filing, identity and address verification,
 
signature capture and creating new account,
 
can be accomplished online. Business rules
 
can be set to have the entire process
 
automated as well. Islamic Banking can also
 
adopt these techniques to initiate customer 
 
acquisition and account opening and
 
online. These steps help banks in increasing
 
customer base and also increase the
 
productivity of bank employees.
 
4. Remote deposits
 –
Allow customers to upload
 
scanned images or photo images of checks
 
taken using mobile camera, with certain
 
specific image quality, instead of walking up
 
to the ATM or Branch for depositing their 
 
checks. Remote deposits have already taken
 
off in advanced markets, enabling easier 
 
realization of money once the check is
 
deposited. Advanced image recognition
 
technologies can enhance the image quality
 
of the check as per the specifications, thereby
 
reducingimage quality based rejections.
 
 Adequate fraud detection and prevention
 
technologies are available as well to reduce
 
online check image related frauds.
 
5. Family banking
 –
Let your customers manage
 
accounts belonging to their family members
 
through online banking. Parents could be
 
allowed full control of their 
kids‟
account,
 
including inquires and transactions. Parents
 
could also set transaction limits or even
 
restrict payments to online shopping sites
 
through their 
kids‟
account. Personal finance
 
management can be extended to plan
 
a monthly budget, and they could even
 
monitor the spend patterns of their kids.
 
While kids get to plan their finances, it gives
 
greater control to parents as well.
 
6. Web 2.0 & social media - The digital consumers
 
would like to interact with their friends
 
and seek their opinion on products. They
 
might also want to share their banking
 
experiences which might be useful to others.
 
Such information and recommendations act
 
as indirect marketing for banks. Banks can
 
leverage social media for viral marketing and
 
increase their reach. While making secure
 
banking services available through social
 
media portals, banks also need to ensure that
 
necessary safety measures are put in place for 
 
protecting the privacy of customers.
 
7. Financial planning tools
 –
Visual representation
 
of calculations are always appealing to
 
customers. How about showing a graphical
 
comparison of financing with different
 
options, so that the customer can make an
 
easy decision, instead of showing a table with
 
data comparing the products? How about
 
a product comparison chart showing the
 
attributes and benefits of different products?
 
 A variety of tools including charts and
 
graphical illustrations can be used to explain
 
the products, through internet banking and
 
mobile banking. These tools can be designed
 
Thought Paper 
 
03
 

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