Information technology in the banking sector : opportunities, threats and strategies.
Graduate School of Business and Management, American University of Beirut, 1998
The New Era
The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological solution to meet the challenges of a rapidly-changing environment. It is clear that this new technology is changing the banking industry forever. Banks with the ability to invest and integrate information technology will become dominate in the highly competitive global market. Bankers are convinced that investing in IT is critical. Its potential and consequences on the banking industry future is enormous.
Technology and Banks Transformation
Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent management and decision support systems provide the bank that
For the bank. They have already developed and implemented a certain number of solutions among them:
Self-inquiry facility: Facility for logging into specified self-inquiry terminals at the branch to inquire and view the transactions in the account. Moreover.Anywhere banking: Installation of ATMs which offer non-stop cash withdrawal. to transact from any of these branches. single-window service becomes possible. The technology used to provide this service is called electronic data interchange (EDI). cash transfers. Remote banking: Remote terminals at the customer site connected to the respective branch through a modem. The major advantages for the bank to implement IT are:
. cheque book issue and inquiry on rates without visiting the bank. remittances and inquiry facilities. and the bank can download the same. will permit customers of these branches. when interconnected.to the customer. without having to move from his office. Major applications. banks applied IT to a wide range of back and front office tasks in addition to a great number of new products. Networking of computerized branches inter-city and intra-city. to inquire about their financial transactions and accounts. As information is centralized and updates are available simultaneously at all places. The advantages accruing from computerization are three-directional . For the customer. to the bank and to the employee. enabling the customer to make inquiries regarding his accounts. leading to effective reduction in waiting time. During the last decade. Telebanking: A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone. Electronic Banking: This enables the bank to provide corporate or high value customers with a Graphical User Interface (GUI) software on a PC. Banks are aware of customer's need for new services and plan to make them available. IT has increased the level of competition and forced them to integrate the new technologies in order to satisfy their customers. LC text and details on bills can be sent by the customer. on-line. It is used to transmit business transactions in computer-readble form between organizations and individuals in a standard format. Anytime banking.competitive edge to forge ahead in the banking marketplace.
Fast and up-to-date information transfer enabling speedier decisions. Immediate replies to customer queries without reference to ledgerkeeper as terminals are provided to Managers and Chief Managers.
Availability of a wide range of inquiry facilities. Avoidance of duplication of entries due to existence of single-point data entry. Automatic printing of covering schedules. Generation of various MIS reports and periodical returns on due dates. deposit receipts.
. Signature retrieval facility. by interconnecting computerized branches and controlling offices. For the employees. Automatic and prompt carrying out of standing instructions on due date and generation of reports. A search of the banking literature reveals that banks are moving rapidly to take advantage of recent and new customer service and cost reduction opportunities that new technologies offer. assisting in verification of transactions. A sampling is in the table below: Technology Infrastructure PC Networks: Tellers 48% Sales Tracking Software 44% Relational Data Base 36% Automate Credit Scoring 8% E-mail 60% Equipment Management Software 33% Imaging Checks / Statements 12% Imaging Documents 7% Delivery Systems 80% 80% 76% 48% 95% 57% 72% 45% Current Use Use in Next 3 Years. pass book / pass sheet. IT has increased their productivity through the followings:
Accurate computing of cumbersome and time-consuming jobs such as balancing and interest calculations on due dates. and enabling them to give more attention to the needs of the customer. assisting the bank in business development and follow-up. sitting at their own terminal. freeing the staff from performing these timeconsuming jobs.
The pilot project between Bank of America (BofA) and one of its large corporate customers involves transporting financial EDI transactions over the Internet. The Internet is rapidly becoming the information superhighway of a global electronic marketplace. such technologies are already available. and valuable learning experience with the Internet environment. How to survive. Although "back-end" applications such as electronic data interchange (EDI) are equally important. US banks expenditure on information technology grew from $16. malls.7 billion in 1995-an increase of 14.Internet Banking Home Page Internet Electronic Office Telebanking Smart Cards Debit Cards Electronic Banking
3% 1% 56% 35% 12%
25% 15% 88% 70% 76%
Internet: Riding the tiger. One major concern is security: the Internet is generally perceived as not secure enough for transmitting sensitive data such as payments. According to a survey conducted by the American Bankers Association. The project is also significant beyond BofA: because it is one of the first large-scale. and encourage more companies to move in this direction.7%.the fastest growing segment of the Internet. this view is not warranted. If successful. and $1 billion more than the same bankers forecasted they would spend in last year's survey. real-world trials. yellow pages. The rising commercial interests in the Internet are especially evident in "frontend" applications such as electronic catalogs.2 billion (an increase of 7. That generation was disdainful of "impersonal" service and afraid of
. which is becoming increasingly important to the bank. its outcome will help dispel many uncertainties surrounding Internet-based EDI. however. banks were marketing to a generation raised on old style banking: personal interaction at a banking office. and customer support centers. All these applications are based on the World Wide Web (WWW) -.3 billion in 1994 to $18. 1 %). Customer loyalty will be determined by convenient and innovative delivery of products and personalized services. the banks expect to spend $21. By 1998. In the '70's and '80's. Moreover. The only remaining barrier is the lack of real world users of those technologies. storefronts. Investing in technology. their adoption has not been as rapid. Upon a closer look. The key to survival is customer service. BofA expects that this new EDI option will lead to a reduction in telecommunications costs. since technologies such as public key encryption and firewalls address essential security concerns. an improved position with respect to its value-added network (VAN).
they embrace them. Telephone banking can bring financial services to the home or office. By noticing how much interest the customer expresses. can
. the banks delivery systems are completely changing. customized product illustrations can be widely available where needed. The new strategy changes the focus of the branch from being a high cost transaction center to a provider of a wide range of services like telebanking. but they are defined differently. Convenience is doing their banking when they want. Today. customer service kiosks. New Marketing Opportunities. The internet is a medium to allow banks to offer products to customers outside the normal customer base of a branch. growing comfort of technology usage by the customer is rapidly fostering usage of non-branch channels for routine transactions. Interactive videos are new technology that banks can make available to the customer to maintain personal contact while still lowering the expense of delivery service. They expect fast. efficient. They are not afraid of computers and technology. high delivery costs and slow revenue growth force a relook at the conventional delivery systems. Consumers still want to bank with a financial institution they "know. Banks need the ability to also sell insurance and investment products to get a better return on this investment.computers. and where they want. which has been a pioneer in the use of electronic systems. Banks are aware of the customer's need for these services and plan to make them available before other sources do. but they do not necessarily want to go to the bank. is through intensive use of the most advanced information technologies and through good people trained in the use of these technologies. As the new technology is so expensive banks need to use the new systems to do more than deliver information and basic services. quality service that customers demand. Complex life insurance products. Moreover. open brokerage accounts. ATMs. Early experiences with electronic commerce in the banking industry. Drawbacks. With an interactive video an expert employee is not needed in each branch. decreasing cost of computers. personal service and convenience are still the critical factors in the banking relationship. The increasing cost of building brick-andmortar branches. and accurate service And the only way to cost effectively provide the instant." and one who "knows" them. and that the competition provides. For all these reasons. The interactive videos will be cost effective expertise. and remote electronic banking. Convenience was having a "branch" in one's neighbourhood. The new Delivery Systems. especially if they are affordable screen phones. the bank can market stock quotes and insurance quotes. They are now comfortable with personal computers and other electronic devices.
the fact that customers' only contact with their banks was through (rather unsophisticated) electronic interfaces. The use of Automated Teller Machines and electronic home banking systems has increasingly allowed customers to bank outside of traditional bank facilities.be used to learn of some potential dangers and issues to be taken into account. The recent agreement between Mastercard and Visa on one security standard for credit card transactions over the Internet. the insurance companies took opportunity of that to grab business from banks. The key here will be to find a few widely accepted mechanisms. It becomes a strategic necessity for the Lebanese banks to implement the new technologies at all levels.g. They lacked the information technology revolution in the banking sector. credit cards accounts) while others rely on new designs. selling savings products to customers through their extensive distribution network. Various systems have been proposed. eighty percent of the Lebanese infrastructure was destroyed. which can be used by most actors. and its backing by most major software vendors is one step in the right direction. for most of their usual transactions. The remaining twenty percent are now outdated.
The Lebanese Case
During the last civil war (1975-1990). This doesn't diminish the need for more specialized systems. for instance to allow microtransactions. Electronic business transactions can only be successful if financial exchanges between buyers and sellers can occur in a simple. Nevertheless. safe and cheap way. as they're not always able to express comments. Similarly. managerial level and executive level. In some European markets. transactional level. criticisms or requests for new products while interacting with machines. This was consistent with the cost-savings strategy of most banks. such as electronic money. In the 1990's they started implementing IT capabilities to
. the exchange of very small amounts of money (a few cents) in exchange for information or services. The Lebanese banking sector was heavily affected by the war. the decrease in human interaction with customers could also lead to a less sophisticated understanding of their needs. These new payment mechanisms will in turn enable new business models such as pay-perarticle newspapers. some of them based on traditional mechanisms (e. which discovered that electronic transactions were about seven times less costly compared to the manual handling of these transactions by a bank teller. and the major difficulties in integrating the legacy systems of a typical bank. prevented banks in many cases from selling additional products to customers (crossselling). This should lead to a design of electronic commerce systems which incorporate capabilities for customer understanding and for proactive selling of new products. universally accepted.
in BLOM in Bank Audi are scheduled to run during this year. Lebanese banks started to build their databases and automate their work procedures. customer service and customer orientation with all facets of operations totally computerized. Banque du Liban et d'outre-mer (BLOM). Technology Adoption. these banks are replacing their old information systems. While Ban k Audi followed another strategy and purchased an on-line information system providing a real time on line branch network with an up-to-date banking and customer information to senior management. Restructuring bank's processes in order to reduce staff expenses which constitute a large part of the operating costs and a heavy burden on its operating profitability. The first steps. Most of the Lebanese bankers believe that IT will enable them to face the foreign competition and the possible consequences of the coming peace. end users and business analysts. The vast majority of the Lebanese banks have set very high standards of excellence for themselves in terms of technology. state-of-the-art facilities. Both information systems. for example. raise the productivity. Their ambition is to position themselves as technology-driven banks offering superior services to both their clientele classes . Most banks have adopted ready made packages for their internal operations. Different approaches are followed in the Lebanese banks to acquire and implement the new technologies. Currently. The banks also make extensive use of communication technology to provide off-site banking facilities including ATMs. cut costs and deliver the best services to their customers and increase their profits in the same time.the corporate customer and the retail customer. The major reasons behind adopting or developing new information systems are:
Rapid geographical expansion has forced banks to replace their offline systems by an on-line system linking the branches to the head office through the telecommunications network. The banks branches are planning to provide state-of-the-art services to their customers enabling a rapid growth of the bank's performance in a very competitive marketplace. Technologically the answer to this is a reliable network connecting branches that run on-line. At the early stage . The corporate customer typically requires quick disposal of loan applications and maximum returns from the cash balance. Incompatibility of the old systems with the strategic necessity of
. The needs of the corporate customer are functions of the speed of response. has developed its own complete banking information system.change the work organization. middle managers.
and proven to enhance bank performance. Technology Assessment. The first objective is to examine the bank's deployment of technology relative to what is available. Lebanese banks are also introducing remote banking services. it introduced the computer based remote banking service which is called Corporate banking. we look at both the technology in place to serve today's customer and the plans for serving tomorrow's. in order to provide the high quality services to the customers and competing on an equal foot with the foreign banks. The central bank is expecting that about 700 ATM machines will be installed in Lebanon by the year 2000. Lebanese banks are facing enormous challenges in mastering the new tools provided by IT. Arab bank installed an interactive voice response system. About 25 banks have joined this network and are sharing now its almost 60 machines located in the major cities of Lebanon. I will analyse and discuss these obstacles. etc. In the following section. At the same time. tested. Universal Bank. Other banks followed. The competition. and the British Bank of the Middle East followed and introduced their telephone based remote banking. Allied Business Bank. etc.integrating new technologies like ATMs. The Lebanese banks are also planning to offer the entire range of services like telebanking. However these services are providing only inquiry facilities because they are off-line systems. We want to answer the following questions: The most important issues to be analysed are : To what degree is the bank using proven technologies to enhance performance? Are there any technologies not deployed that would have a significant. positive effect on performance? What level of specialized training has been received by the officers
. Arab bank started to install ATM machines in 1993. In evaluating banks'use of technology. Four other banks. called Phone Banking. using Link cards. Early in 1994. The diffusion and successful implementation of IT in Lebanese banks is not an easy process. Arab Bank was the pioneer in introducing ATMs in Lebanon. ATMs. The second is to examine the bank's preparation for the future. telebanking. Arab bank was also the first bank in Lebanon to offer this service. BLOM. They also respond very actively in the marketplace in introducing new products and services. An important constraint to the diffusion and success of IT implementation is the telecommunications infrastructure. by establishing in 1994 a network called Link Network. another obstacle is managerial practices and organizational weaknesses.
Abdul Reda and M.and employees assigned to selecting. Byblos Bank. In order to face this challenge. The high cost of the equipment 0 The lack of coordination between the members of the Lebanese Banks Association. Dayya. there is still a real shortage of qualified personnel.
Human Resources Problems. banks began studying the feasibility of installing a private telecommunications network. Banking industry is heavily depending upon information technology that needs professionals for development. Banking IT: a look at Lebanon. This network will also be used to connect the ATMs machines which will thus function on-line. Arab Bank. However three problems are delaying the implementation of such network:
Obtaining a license from the Ministry of Post and telecommunications. and managing technology? What level of systems training has been provided to other officers and employees? How effective are the systems that are being used? Is Management monitoring the evolution of banking technologies and planning for the future?
Telecommunication infrastructure. AUB. electronic funds transfer. According to a recent survey ( T. implementation and support. The result of such situation is a delay in implementing new services and products like remote banking. The Lebanese telecommunications infrastructure was devastated by the civil war. This has also an effect on the reliability of the services already implemented like ATMs. The process of rehabilitation and modernization of this infrastructure started in 1993. The greatest obstacle to real time electronic banking in Lebanon is the telecommunications infrastructure. real time bank information systems. Telecommunications in the banking sector is a major factor to the success or failure of any application or service. Four banks. and BLOM. 1996) the following problems were identified:
almost half of the Lebanese banks do not have one engineer
. deploying. Despite the programs performed by many banks to develop their local expertise in IT.According to the recovery plan developed by CDR the telecommunications rehabilitation plan will be completed by the year 1998. started in the early 1996 considering the installation of a private network to connect their branches and thus conduct real time banking operations. This means that banks will not be able to rely on the public network until 1998. Bank Audi.
Financial institutions in Lebanon offer a wide range of training programs to their employees. The turnover rate of the technical staff in some 40% percent the Lebanese banks is around 20%. They must determine whether to deploy new technologies themselves or with other service providers. Most Lebanese banks have realized this fact and some of them have established a training centre. priorities and processes. Resistance to change and the absorption capacity is often neglected once the automation system is adopted. this human factor is a critical factor in the success of any banking application of information technology. This technology needs to be integrated in an organization. Doing so presents tremendous challenges. lack of professional training programs. and service needs of the customers The future belongs to financial service providers not traditional banks. because IT staff are considered to be trained. Another point that should be mentioned is the necessity of planning very carefully the development of any new application.
among their staff. The low salaries and better opportunities in other industries are the main reasons for this high rate. Nevertheless. these plans have to be linked closely to organizational strategies. However.
Strategy for the future
Banks face a serious challenge. To be relevant. delivery. Banks must also create performance measurement systems to assure the mix products and services they offer are beneficial to both the customer and the bank. technology alone will not solve issues or create advantages. The consequence of such policy is a reduction of the capability of IT staff to be up to date in the most recent advances . will create value networks. High turnover rate of technical staff. objectives. It also needs to support a clearly
. highly qualified and hence do not need extended training sessions. with respect to their technical IT staff the percentage of training programs is much less. Banks will have to first develop a comprehensive distribution system that will enable customers to touch them at multiple points. with the change management issues linked to people resisting new concepts and ideas. A computerization plan is the basis for implementing successful information technology solutions. However.
These are the major obstacles for implementing IT in Lebanese banks. Resistance to change. The vast majority of large banks. The only way to solve this problem is to design adequate training programs and increase the awareness of the employees. The basic structure of the bank is increasingly in conflict with the changing product.
date. Information technology enables sophisticated product development. Important initiatives with regard to the reform of the banking system were taken in this phase.BL .Email: ddc-info@aub.
MILESTONES In India. Information Technology has basically been used under two different avenues in Banking. better market infrastructure. The middle and late 90s witnessed the tornado of financial reforms. The early 90s saw the plummeting hardware prices and advent of cheap and inexpensive but high-powered PCs and servers and banks went in for what was called Total Branch Automation (TBA) Packages. Information technology and the communication networking systems have a crucial bearing on the efficiency of money. Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. During Fourth phase.lb
In the five decades since independence. A combination of regulatory and competitive reasons have led to increasing importance of total banking automation in the Indian Banking Industry. provisioning and capital adequacy. The Software Packages for Banking Applications in India had their beginnings in the middle of 80s. technology has changed the contours of three major functions performed by banks. deregulation. INFINET.defined and well communicated business strategy.. when the Banks started computerising the branches in a limited manner. Indian banking industry. Further. banks as well as other financial entities entered the world of information technology and with Indian Financial Net (INFINET). access to liquidity. globalisation etc coupled with rapid revolution in communication technologies and evolution of novel concept of 'convergence' of computer and communication technologies. like Internet. Entry of new banks resulted in a paradigm shift in the ways of banking in India.e. The growing competition. growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. mobile / cell phones etc. Important among these have been introduction of new accounting and prudential norms relating to income recognition.
Created by the Digital Documentation Center at AUB in collaboration with Al Mashriq of Høgskolen i Østfold. also called as Reform Phase. banking in India has evolved through four distinct phases. Norway. transformation of assets and monitoring of risks. capital and foreign exchange markets. deregulation of interest rates & easing of norms for entry in the field of banking. today is in the midst of an IT revolution. In view of this. One is Communication and Connectivity and other is Business Process Reengineering. a wide area satellite based network (WAN) using
. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain their customer base. i. implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets.edu.
This would result in funds transfers and funds-related message transfer to be routed electronically across banks using the medium of the INFINET. Internet has emerged as an important medium for delivery of banking products & services. Certification and Digital Signatures The mid-term Review of October 2002 indicated the need for information security on the network
. Detailed guidelines of RBI for Internet Banking has prepared the necessary ground for growth of Internet Banking in India. Intra-city and intra-bank networking would facilitate in addressing the "last mile" problem which would in turn result in quick and efficient funds transfers across the country". the second phase comprising the centralised funds transfer system (CFTS) would be made available by the middle of 2003. The first set of applications that could benefit greatly from the use of technological advances in the computer and communications area relate to the Payment systems which form the lifeline of any banking activity. Internet has significantly influenced delivery channels of the banks. which continue to be governed by the provisions of the Negotiable Instruments Act. which has become operational since February 2002 and RTGS (Real Time Gross Settlement system) scheduled towards the end of 2003 are other major developments in the area. was jointly set up by the Reserve Bank and Institute for Development and Research in Banking Technology (IDRBT) in June 1999. trans-mission and retention of an electronic (or magnetic) data to be treated as valid proof in a court of law. So far. 2000 has given legal recognition to creation.VSAT (Very Small Aperture Terminals) technology. The process of reforms in payment and settlement systems has gained momentum with the implementation of projects such as NDS ((Negotiated Dealing System). As stated in RBI's Annual Monetary and Credit Policy 2002-2003: "To reap the full benefits of such electronic message transfers. except in those areas. it is necessary that banks bestow sufficient attention on the computerisation and networking of the branches situated at commercially important centres on a time-bound basis. 54 banks have implemented the system at their treasuries/funds management branches. 1881. Negotiated dealing system (NDS). While the first phase of the system covering the centralised funds enquiry system (CFES) has been made available to the users. CFMS (Centralised Funds Management System) for better funds management by banks and SFMS (Structured Financial Messaging Solution) for secure message transfer. The Information Technology Act. The Indian Financial Network (INFINET) which initially comprised only the public sector banks was opened up for participation by other categories of members.
Implementation of Centralised Funds Management System The centralised funds management system (CFMS) provides for a centralised viewing of balance positions of the account holders across different accounts maintained at various locations of RBI.
with the inter-bank settlement being effected in the books of account of banks maintained at RBI. public sector banks and other institutions. Multi-application Smart Cards Recognising the need for technology based payment products and the growing importance of smart card based payment flows. the electronic clearing service (ECS) and electronic funds transfer (EFT) are also being enhanced in terms of security by means of implementation of PKI and digital signatures using the facilities offered by the CA. The project is aimed at the formulation of standards for multi-application smart cards on the basis of inter-operable systems and technological components of the entire system. national EFT (NEFT) is being introduced using the backbone of the structured financial messaging system (SFMS) of the IDRBT. the State Bank of India and its associates. the process of setting up of registration authorities (RA) under the CA has commenced at various banks. after examining the various aspects relating to payment and settlement systems. The report of the Committee was put on the RBI website for wider dissemination. a special EFT (SEFT) was introduced in April 2003 covering about 3000 branches in 500 cities. The draft Bill has been forwarded to the Government. In order to facilitate banks to have better control over their funds. Real Time Gross Settlement System (RTGS)
. NEFT would provide for movement of electronic transfer of funds in a safe. apart from empowering RBI to have regulatory and oversight powers over payment and settlement systems of the country. submitted its report in September 2002 along with a draft Payment Systems Bill. Patil) was set up in 2002. Committee on Payment Systems In order to examine the entire gamut of the process of reforms in payment and settlement systems which would be culminating with the real time gross settlement (RTGS) system.
Special Electronic Funds Transfer As indicated in the mid-term Review of October 2002. Since this scheme requires connectivity across a large number of branches at many cities. This has facilitated same day transfer of funds across accounts of constituents at all these branches. a pilot project for multi-application smart cards in conjunction with a few banks and vendors. a legal basis for netting. Government of India. inter alia. In addition to the negotiated dealing system (NDS). The Controller of Certifying Authorities. R. Consequently. National Settlement System (NSS) The clearing and settlement activities are dispersed through 1. The Committee. secure and quick manner across branches of any bank to any other bank through a central gateway of each bank. under the aegis of the Ministry of Communications and Information Technology. it is proposed to introduce national settlement system (NSS) in a phased manner. have approved the Institute for Development and Research in Banking Technology (IDRBT) as a Certification Authority (CA) for digital signatures.H.and the use of public key infrastructure (PKI) by banks. Government of India.047 clearing houses managed by RBI. a Committee on Payment Systems (Chairman: Dr. The draft Bill provides. has been initiated.
Deals done outside NDS should be reported within 15 minutes on NDS. This has gained more importance after the establishment of
. government securities and foreign exchange markets.. The initial set of modules is expected to be delivered by June 2003 for members to conduct tests and familiarisation exercises. irrespective of the size of the deal or whether the counterparty is a member of the NDS or not. 2003. call/notice/term money. With a view to improving transparency and strengthening efficiency in the market. insurance companies. financial institutions (FIs). it will be considered whether non-reported deals by that member should be treated as invalid with effect from a future date. Membership in NDS is open to all institutions which are members of INFINET and are maintaining subsidiary general ledger (SGL) Account with RBI. CDs and CP executed among NDS members have to be reported automatically through NDS. With RTGS being implemented by Jan. In case there is repeated non-reporting of deals by an NDS member. 2. In order to achieve this. development of the various software modules for the RTGS system is in progress. if the deal is done on NDS and within 15 minutes of concluding the deal. At present. which has become operational since February 2002. The live run of RTGS is scheduled towards the end of 2003. Reporting of Call/Notice Money Market Transactions on NDS Platform Negotiated dealing system (NDS).
Areas. primary dealers (PDs). it is proposed that: 1. However. Mrs S A Panse. From the fortnight beginning May 3. Deputy General Manager (Information Technology).NDS-PDO. These include banks. which will get the emphasis in IT plans/Strategy of banks. CFMS. it has been observed that a very sizeable proportion of daily call/notice money market deals is not reported by members on NDS as stipulated.. Bank of Maharastra is of view that as Asset-Liability management and Risk management have gained importance after liberalization and globalization. SMFS and RTGS. every bank would have to not only computerize the entire functioning of the Treasury department but also would have to consolidate the treasury function and move towards integrated treasury for better funds management. all deals in government securities.2004.As indicated in the mid-term Review of October 2002. connectivity intrabank as well as interbank is also the basic necessity for every bank. mutual funds and any other institution as admitted by RBI. Further. if done outside NDS. enables on-line dealing and dissemination of trade information relating to instruments in money. in view of RBI's initiative for implementing various payment and settlement systems such as. it would be mandatory for all NDS members to report all their call/notice money market deals on NDS. IT would be playing a major role. Establishing a WAN for connecting all the branches and moving towards Core Banking Solution is the prime business need. getting the data updated on real time basis for the organization is of prime importance. Full compliance with the reporting requirement to NDS will be reviewed in September 2003.
According to Mr Neeraj B Bhai. General Manager & Chief Technology Officer. Chief of Information Technology. which will get the emphasis in IT plans/Strategy of banksa. Chief Technology Officer. Networking of branches b. Ramani. According to Mr Ramani. WIth impending arrival of RTGS. Ram. Focus on technology based initiatives for Intra-day liquidity Management e. HDFC Bank feels that Connectivity of banks. Secure Messaging for launching funds transfer products c. Banks that are not geared up for the networking should fear to be left behind. Chief Technology Officer. Shamrao Vithal Co-Operative Bank feels that RBI's initiatives and encouragement to the Banks to implement payment and settlement systems in a secured environment is surely the first logical steps towards the introduction of the electronic funds transfer mechanism in a big way.the CCIL.According to Mr Pravir Vohra. A long time into the future. Mr C.K. ICICI Bank. Mr V Chandrasekhar. National Settlement System will enhance the efficiency of funds management. Mr V. Chief Technology Officer. UTI Bank is confident that the Policy announcements on the payment systems will pave the way for the establishment of the legal framework. for electronic settlements. the move for an RTGS is logical extension. The earlier Smart Card project of RBI had met with a limited success. in view of RBI's policy this year. all banks will have to gear up for it. Core Banking Solution implementation
T has had a great impact on the banking industry. President (Information Technology). Bank of Baroda summarises the key areas. The technology for integrated applications is available but unless the volume of transactions is large. Implementation of the Core Banking solutions are to be planned by Banks as part of their strategy to align with the RBI initiative. which can now be centralised in a much better way. Asset Liability Management systems and core banking will rank high in plans of Banks. While Multiapplication smart card pilot has been indicated in the policy.although the current card issuers (visa/mastercard) will have to look at their
. ALM & Risk management are going to be areas of top priority in IT plans/Strategy of banks. Mr Ravikiran Mankikar. IDBI Bank. Currently smart cards are used for select applications. it is not an attractive proposition. Inter-bank payment systems are poised to move to a much higher degree of advancement during the year. its active usage is still quite some time away.N. Integrated Treasury Management System d. The technology initiative taken by the RBI for setting up RTGS will have far reaching impact As follow up to the electronic clearing ECS. mobile phones etc) although how these will be secured is still unknown. I suggest in the future that payments will be instant across the globe. the removal of small cash amounts (coins) may be transferred over to these integrated devices . Risk Management. plastic cards will be replaced with integrated devices (watches. Networking of branches. the standards for inter operability of smart cards will enable multiple applications on a single chip.
The introductions of ATMs. also reaches out for something superior and a wider range of customers. Thus costs cuttings have a direct effect influencing the profit margins therefore resulting into a thriving business sector. The cost of global funds transfer has gone down drastically due to the progressive nature of the technology. instant alerts. electrical. The importance of technology has eventually contributed a lot in the way of cost reduction for the customers and has offered a varied number of products and services. sports updates. Other services include everything from medical. movie tickets bookings. The importance of technology in the banking sector has made banking a very easy affair. A majority of existing banks today are also moving to paperless statements and billing . Electronic banking has also emerged as one of the most efficient delivery channel for the banking industry. An unprecedented economical and financial expansion is witnessed across the globe and the IT revolution forms the basement of it. internet banking and phone banking are all the outcomes of the technological modifications. railway and air ticket booking.charging model to achieve widespread use. mobile banking. payment blockings every little detail and service is provided by internet banking and other technological services. The new age customer faces has also undergone a radical change from its yester years counterparts and they are much more tech savvy themselves and demanding and would essentially want to avail the most improved version of services for themselves. telephone and shopping bill payments to payment of excise duty and service tax. prepaid mobile recharges. Technology banks helps in the process of clarity. and the banking industry is another one to benefit from the multi dimensional efficiency levels of technology. Information technology of IT revolution has essentially changed the face of the world and the economic. The back office requirements and financial accounting is also managed by the banks through the development of advanced software. Services provided through the means of computers. financial and social status has taken a giant leap from what it used to be previously.will these be trusted if you have printed them yourself ?
Technology is a boon to several industries in the post modern world. is the main reason of development and growth of the banking sector.however this does raise an interesting side issue in that a lot of banks & loan companies still ask for proof of income or evidence of a bank account by viewing the paper statements . international money transfer and so on and so forth. funds transfer. The financial operations are very fast and reliable and that has eventually resulted into strengthening the banking sector. Banking has definitely improved from just being somewhere one had to rush every now and then to keep a tally of their accounts and to deposit and withdraw cash. Express delivery. Technology henceforth. mobiles and other telecommunication mediums have also added upon the benefits and multitude of tasking for the banks. to something which is so easy and efficient that it does not at all seek for added attention. card to card transfer. instant software download to stop payment.
. simplicity and efficiency in complex banking processes.
technology aids the adept security measure for the banking houses in order to secure the customer confidentialities and monetary details. However. Interest free period will not be allowed for cash advance.
IFIC Debit Card
FIC Bank VISA Debit Card can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh. For cash withdrawal from ATM/Branches. POS transactions will not require PIN. VISA Card
IFIC Bank VISA Credit Cards are issued in two types namely Gold and Classic for both local and international use. Therefore.com for further information. 502 or Fax: 9570282 or email: card@ificbankbd. The customers are not required to pay any charge for transactions at Merchant Point of Sale (POS) for purchasing goods and services. Please dial 9559703 or 01713229817 at any time for help. ATM transactions are to be secured by Personal Identification Number (PIN) known by the concerned customer only. you can make your schedule of spending & payment at your convenience. IFIC credit cardholders can enjoy 20 to 50 days interest free period depending on the date of transaction and the date of statement generation. Giant business houses have their important papers. 7 days in a week. a little
. International credit card is a dual currency card and as such you can use the same plastic at home & abroad. Classic cards are for lower limits and less costly. Flexibility in Repayment You can repay any amount not less than the minimum payment due within the due date and keep your account regular to enjoy revolving credit facility.
Visit IFIC Card Division on any working day or dial 9559703 or PABX: 9563020 Ext. The designated savings/current account can be operated by using the debit card without using cheques 24 hours in a day. all the transactions are to be authorized by the system electronically
IFIC debit card is issued against any individual savings/ current account maintained with any branch of IFIC Bank Limited.Apart from all this. documents and passwords stored up in the banks which are taken care of by the highly sensitive and skillful technological security devices. 365 days in a year. The Local Cards can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh whereas the International Cards can be used at any ATM and POS displaying VISA logo anywhere in the world.
Credit Card. 500.
POS transactions will. Please dial 9559703 or 01713229817 at any time for help. ATM transactions are to be secured by Personal Identification Number (PIN) known by the concerned customer only. No minimum amount due and no hassle of payment of monthly bills.charge may be applied. There is no need to have any account with the Bank. 500. No interest will be calculated on cash withdrawal or purchases.com for further information. 502 or Fax: 9570282 or email: card@ificbankbd. Prepaid card are suitable for the customers who does not maintain any account with IFIC. visit IFIC Card Division on any working day or dial 9559703 or PABX: 9563020 Ext. 500. Please dial 9559703 or 01713229817 at any time for help.
FIC Prepaid Card
by IFIC Bank IFIC Bank VISA Prepaid Card can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh. No minimum amount due and no hassle of payment of monthly bills. No interest will be calculated on cash withdrawal or purchases.
IFIC Prepaid card is issued by the branches instantly on filling-up the Application Form and making initial deposit..com for further information.
. Visit IFIC Card Division on any working day or dial 9559703 or PABX: 9563020 Ext. 502 or Fax: 9570282 or email: card@ificbankbd..