E-Finance

INDEX

SR.NO. 2. 3. 4. . &. *. /. 9. 10. 11. 12. 13. 14. 1 . 1&. 1*. 19.

CONTENTS Introduction on E-Finance What E-Finance Is? The Transformation or Traditional Business Issues ! "uic# $efinition %f E-Finance '() +T,-'.+ +WIFT Electronic Fund Transfer %nline Ban#in0 $a1 Tradin0 +mart 'ard (ise of E-Finance and Electronic Tradin0 The E-$imension Im2lementation issues The 3lo4al $imension +ur5e1 (e2ort Bi4lio0ra2h1

PAGE NO. 2-09 10-11 12-13 14-1 1/ 19 21 22-23 24-2 2&-2/ 29-31 32 3 -3* 3*-4& 4*-49 0 &22-

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E-Finance
INTRODUCTION Internet has touched almost all as2ects of our li5es. The emer0ence of ecommerce has re5olutioni6ed the 7a1 7e li5e8 sho28 entertain and interact. Therefore8 it should not come as a sur2rise if it tries to influence the 7a1 7e sa5e and the 7a1 7e in5est. Toda18 7hen the customer is #in0 and the ser5ice 2ro5iders are rushin0 to 2a1 o4eisance to the #in08 financial ser5ice 2ro5iders cannot 4e left 4ehind. In their 9uest to differentiate their ser5ices and 0ain com2etiti5e ad5anta0e o5er their com2etitors8 the financial ser5ice 2ro5iders are tr1in0 to 2ro5ide their ser5ices to the customers in the comfort of their homes. The Internet has emer0ed as a con5enient channel for these ser5ice 2ro5iders. .i5in0 in India8 7e mi0ht find these ideas too far fetched 4ut the truth is that Internet has chan0ed the 7a1 these ser5ices are deli5ered8 2articularl1 in countries 7here the Internet 2enetration is hi0h. The different 7a1s in 7hich Internet is tr1in0 to re5olutioni6e the deli5er1 of the financial ser5ices and 2roducts are 0i5en 4elo7: 1. Internet Banking 2. Electronic Bill Payment 3. Online Brokerages 4. Online Deli ery o! "inancial Pro#$cts like %ortgages

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Sunny Agnihotri, T.Y.BBI

E-Finance INTERNET BAN&ING

T7o distinct trends can 4e discerned in the realm of Internet Ban#in0. %n one hand8 Ban#s and Financial Institutions are tr1in0 to enter into ne7 areas and consolidate their hold on the entire financial sector. %n the other hand8 ne7 $ot 'oms are enterin0 the financin0 4usiness and challen0in0 the 4an#s. It could 4e said that t7o o22osite thin0s are ha22enin0 at the same time. The 4an#s8 5ia their consolidation mo5es are tr1in0 to 2reser5e their stron0holds8 7hile the $ot 'oms are tr1in0 to fra0ment the mar#et 41 2ro5idin0 su2erior ser5ices. Ban#s and Financial Institutions are tr1in0 to le5era0e their Brands and their 2osition in the industr1. While8 the $ot 'oms are usin0 their com2etenc1 in su2erior ser5ice desi0n and e;2erience of com2etin0 in this hi0hl1 unsta4le en5ironment. !ll the 2la1ers share the same o4<ecti5es: ac9uirin0 customers8 2ro5idin0 them 7ith ne7 financial information8 ser5ices8 and 2roducts8 and doin0 so in a 7a1 that enhances the 5alue 2ro2osition of their 2roducts and ser5ices.

Internet Ban#in0 allo7s the Ban#s =and other Financial +er5ice 2ro5iders> to o5ercome the tradeoff 4et7een content and reach. With the use of Internet8 4an#s can 2ro5ide their ser5ices to a much 7ider audience then the1 could do 7ithout it. E5en 4efore the comin0 of Internet8 com2etition had shifted from 2roducts to ser5ices. This 7as due8 in lar0e 2art8 to the ad5ent of ,ri5ate +ector Ban#s.

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Before the entr1 of these 4an#s8 the retail 4an#in0 7as more of a commodit1 7ith hardl1 an1 differentiation on the 4asis of 2roducts or ser5ices. Ban#s offered similar 2roducts and similar ser5ice. But the ne7 2ri5ate sector 4an#s chan0ed the scenario 41 differentiatin0 on the 4asis of ser5ice. The1 started 2ro5idin0 Tele2hone 4ased 4an#in0 and introduced the conce2t of home 4an#in0. The su2erior ser5ice 4ein0 2ro5ided 41 these 4an#s 7as the main reason for their ra2id 0ro7th. But their reach 7as limited due to lo0istics of settin0 u2 4ranches and increasin0 the reach of their ser5ice. !n1 attem2t to increase the 4ranch net7or# 7ould ha5e increased their o5erheads and an1 attem2t to 7iden the areas 4ein0 ser5ed 41 a 4ranch 7as li#el1 to lead to deterioration in the ser5ice le5els. In other 7ords8 these 4an#s 7ere cau0ht in a dilemma as the1 faced the (each and content tradeoff. With the ad5ent of Internet these 4an#s ha5e 4een a4le to o5ercome this tradeoff. B1 usin0 the Internet8 these 4an#s can e;2and their reach as 7ell as maintain the standards of their ser5ices.

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E-Finance
'. E(ECTRONIC BI(( PA)%ENT From the 2oint of 5ie7 of Ban#s8 Electronic Bill ,a1ment =EB,> re2resentssomethin0 of a threat8 in that it could lead to customer attrition and reduce re5enue. !mon0 other re5enue streams8 the follo7in0 sources of funds for the 4an#s could 4e affected: Float associated 7ith 2rocessin0 in the 2h1sical form8 'ash )ana0ement +er5ices The Ban#s can 2rotect itself 41 2ro5idin0 this ser5ice to their customers. But EB, also has an im2ortant strate0ic dimension8 as it can 4ecome an inte0ral 2art of a 4an#?s 2ortfolio of ser5ices. EB, can attract customers to the 4an# 41 ma#in0 transactions more efficient and ena4lin0 customers to access their financial information more easil1. )oreo5er8 online interactions allo7 use of such tools as e-'() to create a more intimate relationshi2 7ith the customer and 2romote and deli5er other online 2roducts and ser5ices. If the Ban#s do not esta4lish control on EB,8 the1 are li#el1 to loose customers to the ne7 2ro5iders of financial ser5ices8 thus affectin0 other sources of re5enue. In India8 @$F' Ban#8 I'I'I Ban# and 'iti4an# are tr1in0 setu2 an EB, 2ortal. I'I'I has alread1 started a 2ortal called BillAunction.com. Ban#s are 2lannin0 to use the Bet for 2a1ment of utilit1 4ills. The1 are enterin0 into tie-u2s 7ith utilities li#e )TB.8 !irtel8 %ran0e8 and B,. )o4ile etc. (i0ht no78 a customer 7ho?s recei5ed a 4ill in the 2h1sical form lo0s into the net7or# in order to ma#e an online 2a1ment. -5Sunny Agnihotri, T.Y.BBI

E-Finance
'onsumers and Businesses can deri5e economic 4enefit on account of reduction in transaction costs and a reduction in the float resultin0 from 2h1sical 2rocessin0 of the Bills. In addition8 man1 are li#el1 to ado2t it mainl1 for the con5enience. The1 can 2a1 4ills electronicall1 in the same 7a1 the1 do toda18 4ut 41 consolidatin0 their 4ills8 the1 can reduce the effort in5ol5ed in the 7hole 2rocess. The1 can also access their account at the same time. The1 can con5enientl1 access all 4illers from a sin0le 2ortal that also 2ro5ides them 4an#in0 facilities. This 7ould ena4le them to 5ie7 their account 4alance 7hile 2a1in0 4ills. For 2ortals or the intermediaries that consolidate 4ills from multi2le 4illers at a sin0le online location EB, is a tool to ac9uire customers and 2ro5ide them other financial ser5ices also. $ominance of the EB, mar#et can lead to an entr1 into other financial ser5ices mar#ets such as credit or de4it card 2a1ments8 or indeed into a much 4roader ran0e of e-commerce mar#ets8 such as 2a1ments 0ate7a1s. *. ON(INE BRO&ERAGE %nline Bro#in0 is emer0in0 as another field 7here traditional ser5ice 2ro5iders are li#el1 to face tou0h com2etition from the $ot 'oms. In Tai7an and Corea8 30D of the stoc# tradin0 has alread1 mo5ed online. This is 2osin0 a threat to the traditional Full-+er5ice Bro#era0es. B1 le5era0in0 the 2o7er of the 7e48 'harles +ch7a4 has emer0ed as a ma<or threat to Full-+er5ice 4ro#ers li#e )errill .1nch. In order to 2reem2t the mo5es into these areas 41 ne7 2la1ers8 man1 Ban#s ha5e alread1 tied u2 7ith %nline Bro#era0es.

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E-Finance
The Ban#s ha5e entered the e-tradin0 4usiness. +ince man1 4an#s are also $e2ositar1 2artici2ants8 the1 ha5e tied u2 7ith e-traders so that a customer is a4le to 4u1 or sell shares online and ma#e and recei5e 2a1ments throu0h the Bet. In India8 @$F' Ban# has tied u2 7ith In5estsmart.com and is offerin0 its ser5ices to all the clients of the 4ro#era0e. I'I'I Ban# has 0one a ste2 ahead and launched I'I'I$irect.com. These 4an#s ha5e 4ecome e;clusi5e 2ro5iders of 4an#in0 and de2ositar1-custodial ser5ices to the clients of these online 4ro#era0es.

+. ON(INE DE(I,ER) O" "INANCIA( PRODUCTS The Ban#s ha5e started offerin0 4an#in0 ser5ices li#e chec#in0 1our account status fund transfer8 orderin0 demand drafts and 7ritin0 out che9ues8 5ia the net. +oon these 7ill form onl1 a small 2art of the total arra1 of ser5ices 4ein0 offered 41 them. These Ban#s ha5e em4ar#ed on a num4er of ne7 initiati5es to 2rotect their stron0hold and to le5era0e the net. The1 are offerin0 5alue-added ser5ices to their customers and at the same time are tr1in0 to 0et into B2' and B2B e-commerce. The1 are e5en tr1in0 to 0et their fin0er into 5arious transactions 4et7een the 3o5ernment on one side and the 4usiness and the customer on the other. Ban#s are tr1in0 to 4ecome a 2art of the online 5alue chain. For e;am2le8 the1 are tr1in0 to tie u2 7ith cor2orate so as to 4ecome a 2art of their su22l1 chain and ena4le electronic transfer of funds 4et7een the different com2onents of the +u22l1 'hain. The1 are doin0 this 41 actin0 as an intermediar1 4et7een the cor2orations and their 5endors 41 ena4lin0 online transactions at one 2lace.

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E-Finance
+ome Ban#s are tr1in0 to setu2 2ortals for routin0 2a1ments li#e E;cise $ut1 and +ales Ta;. Bot content 7ith that Ban#s are settin0 u2 secure 2a1ment 0ate7a1s to ta2 the B2' online mar#et. Ban#s ha5e ta#en the a22lication 2rocess for 2ersonal loans8 car loans8 and mort0a0e8 online. The1 2lan to offer other financial 2roducts li#e Bonds and )utual Funds throu0h their financial ser5ice 2ortal. This strate01 is aimed 41 2re-em2tin0 the entr1 of ne7 startu2s into this 4usiness. !nother 4it of the Bet strate018 in5ol5es 2ro5idin0 infrastructure for B2' as 7ell as B2B e-commerce. Ban#s are settin0 u2 secure 2a1ment 0ate7a1s that 7ill allo7 online retail sho2s to o4tain instant credit card 5erifications. %nce the 4u1er hits the 2a1 4utton at a B2' 2ortal8 the 4u1er?s credit card details 7ill 0et encr12ted and tra5el securel1 to the Eisa or )aster'ard a22ro5al s1stem throu0h the 4an#?s 2a1ment 0ate7a1. The 4an#s are also settin0 u2 their o7n sho22in0 2ortals. @$F' has a sta#e in a 2ortal called eas124u1.com 7here @$F' 4an# customers can 4u1 usin0 their 4an# account num4er. Federal Ban# has similar arran0ements 7ith (ediff.com and Fa4mart.com. I'I'I has setu2 )a0iccart.com8 an e-tailin0 site. !t the B2B end8 Ban#s are offerin0 Bet Ban#in0 ser5ice that allo7s electronic fund transfers amon0 a com2an18 its 5endors and dealers. !nother ser5ice 4ein0 tar0eted at this se0ment is cash mana0ement. This 7ill reduce the float8 7hich is 2resent in 2h1sical 2rocessin0 of the 2a1ments.

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Sunny Agnihotri, T.Y.BBI

E-Finance
The Ban#s are also tr1in0 to inte0rate their s1stems 7ith the E(,-+u22l1 'hain s1stem of their clients. This 7ill ena4le the 4an# to 4enefit from the mo5ement to7ards e-2rocurement. E-,rocurement in5ol5es ma#in0 transactions online and 2rocessin0 the 2a1ment electronicall1.

Intro#$ction to E-"inance What e-finance is? The rise of e-finance The transformation or traditional 4usiness issue

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E-Finance
./AT IS E-"INANCE0 The role of IT in finance is 5ast8 and the ans7er to this 9uestion can 5ar1 de2endin0 u2on 7ho the res2ondent is and in 7hich area of the financial ser5ices industr1 he or she 7or#s. To ta#e a fe7 e;am2les: e-finance can ran0e from the IT s1stems 0o5ernin0 the com2le; o2erations of a 4an# or s2eciali6ed su4sets of the acti5it1 such as secure chi2 cardsF 2urchases o5er the internetF soft7are ena4lin0 the com2ilation of )I+ dash4oard re2ortsF or use of the Internet to o4tain information8 diffuse information8 or for research 2ur2oses. The field 4roadens 7hen 7e consider the 5arious electronic net7or#s ran0in0 from ! T)s to +WIFT for funds transfer8 B%.E(% for trade finance8 and the ne7 areas of We4 sites for e-commerce8 da1 tradin08 and e-finance. The term e-finance 4asicall1 includes all these facilities8 and in this 7or# 7e 7ill 4e loo#in0 at some of the technolo0ical de5elo2ments in these areas. Bu667ords circulatin0 in the s2eciali6ed 2ress include terms such as electronic commerce8 di0ital mone18 online tradin08 We4 4an#in08 strai0ht throu0h 2rocessin08 customer relationshi2 mana0ement8 securit18 encr12tion8 electronic 2urse8 $@T).8 relational data4ases8 etc. These ne7 terms re2resent the 4asic elements of 21st centur1 4usiness that ?ire 0oin0 to re5olutioni6e the 7a1 7e conduct our 4usiness and lead our li5es8 and in this 7or# 7e 7ill 4ecome familiar 7ith them. The su4<ect is 5ast and interrelated8 hut if 7e concentrate on e-finance 7e 7ill see that it focuses on all that relates to the sale of 0oods and ser5ices o5er electronic net7or#s8 and the 2rocessin0 of orders and 2a1ments o5er8 - 10 Sunny Agnihotri, T.Y.BBI

E-Finance
those net7or#s. These ne7 channels re2resent the Gdemateriali6ationG of traditional modes of distri4ution in fa5or of electronic =.e. GIntan0i4leG> net7or#s. $es2ite the nascent state of technolo0ical de5elo2ments to date8 this ste2 u2 the e5olutionar1 ladder 2romises to 4e nothin0 less than re5olutionar1. Electronic 4an#in08 tradin08 and finance - these technolo0ical de5elo2ments ha5e a direct im2act on the area of 4usiness #no7n an electronic commerce =or e-commerce>. E-commerce is 4ein0 made 2ossi4le due to a uni9ue 4lend of Inc follo7in0 three elements: Technolo01 is ena4lin0 4usiness to accelerate the transaction c1cle 41 demateriali6in0 it and to do so in a more secure manner. 'reati5it1 is ena4lin0 entre2reneurs to find ne7 7a1s and method of doin0 4usiness outside of traditional structures and methods Be7 methods of raisin0 ca2ital ha5e ena4led these inno5ati5e 4usinesses to a5ail themsel5es of nuance. These three elements cou2led 7ith the trend to7ards dere0ulation of the financial mar#ets8 mean that the? 0lo4al economic and financial landsca2e and the financial ser5ices industr1 are 0oin0 throu0h chan0es that 7ill affect all 2la1ers: 2ro5iders8 users8 re0ulators8 in5estors8 and consumers. The ad5ent of e-finance means that ne7 2atterns of manufacturin08 distri4ution8 and consum2tion 7ill come into effect. E-finance also means that careful consideration 7ill need to he 0i5en to7ards formulatin0 cor2orate strate0ies and definin0-2urchasin0 the electronic infrastructures necessar1 to 4ecome a successful 2la1er..

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TRANS"OR%ATION O" TRADITIONA( BUSINESS %ODE(S ,rior to the rise of the ,' and the Internet durin0 the 1990s8 4usiness models 7ere 0enerall1 confined to the standard - lin#in0 traditional 2rocesses of manufacturin0 2roduction8 and ser5ices to lo0istics8 resource ac9uisition8 desi0n8 in5entor1 control8 2rocessin08 shi22in0 - all of 7hich re9uired a lar0e cor2orate infrastructure. With the internet it has 4ecome 2ossi4le for small as 7ell as lar0e entities to 2ro5ide small and lar0e customers 7ith electronic access to a 4road ran0e of information8 0ood:F8 and ser5ices at a chea2er 2rice and 7ith 0reater efficienc1 and trans2arenc1. Businesses are therefore a4le to use the Internet to reach a lar0er and more 0eo0ra2hicall1 di5erse set of customers at 5er1 little incremental cost. In addition8 the1 ha5e 4een a4le to le5era0e technolo01 to e;2and their 4usinesses 5er1 9uic#l1. +uch are the main characteristics of the nascent field of e-commerce and 41 lo0ical e;tension8 e-finance. It is 7orth notin0 that e-commerce is not strictl1 a4out sellin0 0oods and ser5ices throu0h the We4. This 5ie7 onl1 sees the ti2 of the ice4er0. E finance is a4out usin0 technolo01 fundamentall1 to chan0e 4usiness 2rocesses und indeed8 4uild ne7 4usiness 2rocesses8 412assin0 traditional entr1 4arriers and 4ein0 a4le to achie5e s2eed8 efficienc18 inno5ation8 and customer 5alue8

Earious industr1 studies 41 I$' and Forrester (esearch note that 7hile in 199& H+ ecommerce accounted f=; some %. 03D n=3$,. 41 200I H+ c-commerce is e;2ected to account for *. -10D of 3$,8 and to continue to 0ro7 e5en more. While the H+! has 4een the 2ace setter in e-commerce8 accountin0 for &*D of - 12 Sunny Agnihotri, T.Y.BBI

E-Finance
all 4usiness-to 4usiness e-commerce re5enues and *&D of 4usiness-toconsumer e-commerce re5enues in 19998 other countries8 2articularl1 in Euro2e and !sia8 are increasin0 their 2artici2ation and narro7in0 the 0a2. Forei0n e-commerce 7ill therefore he all im2ortant com2onent of 0lo4al out2ut in the comin0 1earsF indeed. I$' 2redicts that 41 20048 &2D of e-commerce transactions 7ill come from outside the H+8 7ith Western Euro2e and Aa2an accountin0 for the lar0est shares =3GD and 1&D of the total8 res2ecti5el1>. The ne7 econom1 and its successful e-commerce firms are characteri6ed 41 im2lementation of ne7 decentrali6ed JT technolo018 real-time e;ecution and fulfillment8 net7or#s of alliances and 2artnershi2s 7ith other ne7 econom1 2artners8 distri4uted 7or# 2rocesses8 and 2ersonated8 interacti5e '() s1stems. This ne7 model not onl1 threatens e;istin0 2rocesses 4ut is in constant e5olution as it shins from a nascent technolo01 to the ne7 future mainstream econom1F commerce and e-finance are 4rea#in0 esta4lished 2atterns of doin0 4usiness and definin0 t-he Gne7 econom1.G To traditional com2anies8 this is a threat K+ the1 are 4ein0 forced to ada2t to ne7 circumstances and restructure 4usiness 2rocesses lon0 considered as the sacred co7s. To ne7 entrants8 it offers the 2romise of circum5entin0 hitherto surmounta4le entr1 4arriers.

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E-Finance
E-"INANCE E-finance can 4e defined as: G!ll 7hich relates to the lin#in0 of 4usiness8 finance8 and 4an#in0 5ia electronic means8 encom2assin0 information 0atherin08 2rocessin08 retrie5al8 and transmission of data as 7ell as the transmission8 2urchase8 and sellin0 of 0oods and ser5ices. But the definition 4roadens 7hereL 7e loo# at the ne7 2ossi4ilities offered 41 technolo01. 'om2uters and the use of one time data entr1 and relational data4ases means that online real-time data a4out a com2an1?s 4usiness and accounts can 4e 0enerated8 ena4lin0 mana0ers to mana0e their com2anies in ne7 and more 2roacti5e 7a1s. ! case in 2oint is the use of customer relationshi2 mana0ement ='()> techni9ues arisin0 from the use of client-dri5en =as o22osed to accountin0-dri5en> relational data4ases. '() can assist in 2ro5idin0 a more 4es2o#e and 2ersonali6ed ser5ice to clients8 7hich in turn im2acts on issues of mar#etin0 strate01 and 4randin0 of 2roducts and ser5ices. ! 2rime e;am2le of this is the online 4oo#store !ma6on.com. Technolo01 at the ser5ice of a traditional industr1 has re5olutioni6ed the hitherto staid hoc# industr1 and ena4led the creation of the !ma6on G4randG 7hich is merel1 the fruit of IT and relational data4ases 7ith sa551 mar#etin0. The field of efinance ho7e5er is 4roader 7hen 7e consider other factors such as the use of encr12tion and securit1 at the ser5ice of Gdi0ital financeG - a 4road term 7e define to include an1 t12e of electronic financial ser5ice or 2roduct8 7hile di0ital finance has 4een in e;istence for man1 1ears8 and certainl1 2redates the commercial 5ersion of the Internet8 =e.0. the international han#Ms 2a1ment - 14 Sunny Agnihotri, T.Y.BBI

E-Finance
net7or# +WIFT), the use of ne7 technolo0ies and encr12tion is ena4lin0 a 7ider 2ro2a0ation of the conce2t. The 2henomenon of Ge-finance8? li#e Gne7 econom18 e-commerce? or Ge-4usiness.G is at 2resent in a nascent state8 onl1 hintin0 at the future net7or#s and ser5ice that 7ill he on offer. 3lo4ali6ation and internationali6ation are accom2anied 41 ne7 o22ortunities and challen0es8 as 7ell as costs8 ris#s8 and threats. The 2rocess of e-finance is not a 2anacea in itself: it is necessar1 for de5elo2ment and 0ro7th8 4ut it is not enou0h. From the 2ers2ecti5e of de5elo2in0 or transition economies8 the Gne7 econom1G -e-commerce8 e-4usiness8 e-finance8 etc. - could 2ose a Gdeadl1 threatG 7hich mi0ht ma#e these countries secondar1 or e5en mar0inal. @o7e5er8 under certain circumstances8 the a4o5e mentioned 2henomena ma1 also stand for e;traordinar1 o22ortunities and the Internet ma1 4ecome the en0ine of economic 0ro7th and de5elo2ment. The su4<ect is 5ast 4ut can 4e di5ided into se5eral areas that 7e co5er under the follo7in0 headin0s: '() +T,-'.+ +WIFT Electronic Fund Transfer %nline Tradin0 and $a1 Tradin0 +mart 'ards

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CR% The ne7 econom1 is characteri6ed 41 com2anies that ha5e learned ho7 to inte0rate all of their channels - includin0 the Internet - into one seamless and 2o7erful source for mar#etin0 to8 sellin0 to8 su22ortin08 and ser5icin0 customers. These entities are 4lendin0 technolo01 and strate01 in ne7 7a1s to antici2ate customer needs8 fulfill demands8 4uild mar#et share8 and increase 2rofits. In other 7ords8 the1 are de5elo2in0 customer relationshi2 mana0ement s1stems. What e;actl1 is '()? '() is the seamless coordination 4et7een sales8 customer ser5ice8 )ar#etin08 field su22ort8 and other customer-touchin0 functions. +im2l1 2ut. '() inte0rates 2eo2le8 2rocess and technolo01 to ma;imi6e relationshi2s 7ith customers and 2artners8 e-customers8 traditional customers8 distri4ution channel mem4ers8 internal customers8 and su22liers. What com2rises the critical areas of '()? +ome of them are defined as follo7s: 12 Strategic master plan: $e5elo2in0 a clear and decisi5e 2lan to address the com2le; 2eo2le8 2rocess8 and technolo01 issues of '().

12 CRM-enabling technologies: $e5elo2in0 4est 2ractices for desi0nin0 fle;i4le infrastructures and le5era0in0 e;istin0 technolo0ies. => Customer-centric e-business platform: $esi0nin0 and im2lementin0 a - 16 Sunny Agnihotri, T.Y.BBI

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customer-facin0 solution that is inte0rated 7ith traditional channels 41 attendin0 this ho7-to8 ste2-41-ste2 2ro0ram. 12 Customer contact center (CCC) customer-centric business strategy: Inte0ratin0 customer initiati5es. 12Contact center technology: 'ommunicatin0 7ith 1our customers 5ia their 2referred channel =We4-4ased communication. e-mail interacti5e 5oice res2onse8 2hone and fa;>. contact center technolo01 7ith e;istin0 '()

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C(S Contin$o$s linke# settlement it 7as founded 7ith the o4<ect of eliminatin0 settlement ris#8 7hich is inherent in all forei0n e;chan0e transactions usin0 current settlement methods. The Ban# of International +ettlements8 in its re2ort on +ettlement (is# in Forei0n E;chan0e Transactions of )arch 199&. $efines settlement ris# as follo7s: +ettlement of a forei0n e;chan0e =FNO trade re9uires the 2a1ment of one currenc1 and the recei2t of another. In the a4sence of a settlement arran0ement that ensures that the final transfer of the other currenc1 7ill occur if and onl1 if the final transfer of the other currenc1 also occurs8 one 2art1 to an FN trade could 2a1 out the currenc1 it sold 4ut not recei5e the currenc1 it 4ou0ht. This 2rinci2al ris# in the settlement of forei0n e;chan0e transactions is 5ariousl1 caned forei0n e;chan0e settlement ris# or cross-currenc1 settleil1ent ris#.G ! ris# associated 7ith settlement ris# is li9uidit1 ris#. It can he differentiated into t7o forms: => Market liqui ity risk, 7hich arises 7hen a firm is una4le to conclude a lar0e transaction mar#et 2rice. =>!un ing liqui ity risk" 7hich is defined as the ina4ilit1 to o4tain funds to - 18 Sunny Agnihotri, T.Y.BBI in a 2articular instrument at an1thin0 near the current

E-Finance
meet cash flo7 o4li0ations.

S.I"T Backgro$n# +WIFT8 the +ociet1 for World7ide Inter4an# Financial Telecommunications is the 7orld7ide 4an#in0 telecommunications net7or# founded 41 international 4an#s I in 19*3 in direct com2etition 7ith the tele; and 2ri5ate net7or#s. +WIFT?+ 4usiness is to su22ort the financial dat3 communication and 2rocessin0 needs of financial institutions. Its mar#ets are financial institutions conductin0 4usiness in 2a1ments8 forei0n e;chan0e8 mone1 mar#ets8 securities tradin08 and trade finance. +WIFT 2ro5ides financial data communications and e;chan0es that are secure and relia4le. With 2roducts and ser5ices su22orted 41 an or0ani6ation of 1200 2rofessionals 4ased in #e1 financial centers around the 7orld8 +WIFT has 4een at the forefront of automatin0 the financial ser5ices .- industr1 for 1ears. 'ustomer 4enefits are G re2lacement of 2a2er-4ased 2rocessin0 throu0h automated 2rocedures usin0 +WIFT standardsF and G increased 2roducti5it18 cost reductions8 control of financial ris#8 and e;2osure throu0h inte0rated endto-end transaction 2rocessin0 4et7een financial institutions and their o7n customers.

- 19 -

Sunny Agnihotri, T.Y.BBI

E-Finance

De elo3ment The net7or# ori0inall1 4e0an o2erations 7ith the +WIFT I ser5ice 7hich 7as desi0ned in the earl1 19*0s. !s transaction 5olumes 0re78 the ori0inal net7or# 7as u20raded and ne7 ser5ices 7ere added. +WIFT II 7as the second 0eneration of net7or# ser5ices8 the main feature of this s1stem and the +WIFT trans2ort net7or# 7as the a4ilit1 to handle the e5er-0ro7in0 5olume of users? messa0es 9uic#l18 effecti5el18 and securel1. The s1stem 7as made u2 of a num4er of acti5e com2onents =in the form of com2uters or other intelli0ent de5ices> lin#ed to0ether 41 communications lin#s to form a 0lo4al net7or#.

- 20 -

Sunny Agnihotri, T.Y.BBI

E-Finance

E(ECTRONIC "UND TRANS"ER Electronic fund transfers8 automatic teller machines8 de4it and smart cards8 2oint-of-sale mechanisms8 home ,' 4an#in0-tradin0 ser5ices8 and di0ital securities transfers ha5e 4een a 2art of the financial landsca2e for decades. For instance8 consumers and 4usinesses ha5e 4een accustomed to transferrin0 funds di0itall18 rather than 2h1sicall18 for man1 1ears8 de4itin0 and creditin0 accounts 5ia com2uters rather than 2h1sicall1 7ithdra7in0 and red 2ositin0 currenc1. The electronic fund transfer =EFT> - a mechanism used to send Gdi0ital mone1G across the 7ire from one account to another - has 4een in 7ides2read use for decades and forms the core of electronic 2a1ments 4et7een com2anies8 0o5ernments8 and other institutions. )ore than P turn in electronic 2a1ments occurs e5er1? da1 - includin0 P 2turn that is transferred 4et7een 4an#s: lar0e 5alue electronic 2a1ment s1stems and clearin0 houses such as +WIFT8 '@I,+8 !'@8 '@!,+8 B!3+8 and others are a fundamental com2onent of the electronic 2a1ment net7or#. %ther electronic mechanisms for o4tainin0 cash8 mo5in0 funds8 and com2letin0 2urchases ha5e 4een in use for 1ears and are 7ell entrenched in toda1?s societ1. 'onsumers ha5e acti5el1 used automatic teller machines =!T)s> since the 19/0s8 accessin0 cash8 de2ositin0 fund and transferrin0 4alances 7ith their !T) cards. Thou0h !T)s G?o# more than 1 1ears to 4ecome firml1 esta4lished in consumer 4an#in08 the1 are no7 an indis2ensa4le 2art of retail finance: !T)s currentl1 account for 0D of all cash-4ased 4an#in0 transactions and ha5e re2laced - 21 Sunny Agnihotri, T.Y.BBI

E-Finance
man1 of the functions 2re5iousl1 handled 41 4ranch-4ase tellers.

ON(INE BAN&ING The histor1 of 2hone 4an#in0 and ,' dial-u2 ser5ices dates 4ac# some 20 1ears. Throu0h 4asic technolo018 customers ha5e 4een a4le to mana0e funds and 2a1ments usin0 2hone #e12ads and com2uters. This 5ariant of e-finance8 ho7e5er8 is 2rimiti5e com2ared 7ith the future 2romises of this technolo018 7hich 7ill ena4le a far more 2roacti5e in5ol5ement and richer functionalit1 to the end-user than has hitherto 4een 2ossi4le. ,'-4ased online 4an#in0 started in the late 19*0s and earl1 19/0s 7ith 2ro2rietar1 dial-u2 ser5ices. Ban#s such as 'hemical and 'iti4an# offered8 for a monthl1 fee8 a 4asic home-4ased ,' 4an#in0 ser5ice 7hich included 4alance loo#-u2. fund transfers. and 4ill 2a1ment. The efforts to 2romote these ser5ices8 ho7e5er8 ne5er reall1 too# off due to hi0h user fees and cum4ersome interfaces 7hich 7ere further handica22ed 41 slo7 res2onse times8 com2licated access 2rocedures8 and uncertain securit1. Gro4t5 o! Online Banking

35 30 25 in mollion 20 15 10 5 0 14.3 9.7 20 27.1

34

2003 2004 2005 2006 2007

- 22 2003

2004

2005 Years

Sunny Agnihotri, T.Y.BBI 2006 2007

E-Finance

In the mid 19/0s soft7are com2anies such as Intuit introduced third-2art1 soft7are solutions to act as an interface8 lin#in0 customers and 4an#s. 'ustomers could use the 2latform to access account information8 transfer funds and 2a1 4ills. 'ustomers could also authori6e the 2a1ment of funds to a 0i5en merchant. "uic#en 7ould then 2rocess the customer a22ro5al and determine 5ia Intuit +er5ices 'or2oration =I+%> if the merchant 7as 2art of the Federal (eser5e?s !utomated 'learin0 @ouse. If so8 I+% 7ould effect an electronic 2a1ment throu0h the !'@ and8 if not8 7ould mail a chec# to the merchant

- 23 -

Sunny Agnihotri, T.Y.BBI

E-Finance

DA) TRADING +ecurities transactions includin0 stoc# and 4ond tradin0 ha5e also 4een dri5en 41 technolo01 for the 2ast fe7 decades While it has 4een common for man1 1ears to 2ass stoc#-4ond orders throu0h 4ro#ers8 7ho then transmit 5er4al or electronic information to an e;chan0e and then re5ert 7ith a22ro2riate de4its and credits to cash and securities accounts actual 2h1sical 2ossession of the securities is 2racticall1 non-e;istent Instead8 man1 securities no7 e;ist 0nl1 in a demateriali6ed electronic form and arc transferred 4et7een seller and 4u1er 41 com2uter. $iscount 4ro#era0e com2anies8 such as +ch7a48 started offerin0 4asic ,' tradin0 ca2a4ilities 5ia 2ro2rietar1 soft7are accessin0 ser5ices 5ia a dial-u2 connection 7ith an I+, =!%.8 'om2u+er5e> in the mid-to-late 19/0 . The increasin0 com2le;it1 of soft7are and the need for au0mented data ?feeds no7 means that ideall1 an I+$B connection is needed to en0a0e in online da1 tradin0. $a1 tradin0 is the 4u1in0 and sellin0 of stoc# in such a 7a1 that at the end of each da1 1ou ha5e no holdin0s. In other 7ords8 1ou ?close 1our 2ositionG and sell 7hate5er securities 1ou 4ou0ht 4efore the close of the da1. This is the 2ure definition and ma1 not al7a1s 4e either 2ossi4le or feasi4le. There ma1 4e times 7hen 1ou ma1 either accidentall1 or on 2ur2ose find 1ourself holdin0 o5erni0ht. If 1ou do this more often than not 1ou then 4ecome a Gshort time - 24 Sunny Agnihotri, T.Y.BBI

E-Finance
traderG and if 1ou hold e5en lon0er8 1ou 4ecome an Gin5estor.G The uni9ueness of da1 tradin0 is that 1ou are sim2l1 2la1in0 a0ainst other da1 traders and could not care less a4out the com2an18 7hat 4ro#erMs thin# a4out the stuc#8 or e5en 7hat the com2an1 does. The da1 trader is merel1 concerned 7ith the mo5ement of the stoc# durin0 the da1 and 2rofitin0 from it. What do 1ou need to 4e a da1 trader? QL ! 4ro#era0e account. ?There are numerous e-4ro#era0e accounts. )an1 of these We4sites can 4e accessed o5er the Internet. QL 'om2uter 7ith We4 access. +ome ma1 sa1 this is not needed and the1 7ould technicall1 he ri0ht8 4ut it is 5er1 hard to 2la1 this 0ame 7ithout one. $a1 tradin0 relies on s2eedF s2eed of 0ettin0 information and s2eed on reactin0 to information8 and a com2uter <ust ma#es it faster. The facilities 1ou 7ill he accessin0 include. QL Be7s8 stoc# 9uotes8 charts etc. and QL Rour 4ro#er - 1ou can 0et in and out of stoc#s 9uic#er online- than 1ou can 41 2hone. QL ,ro2rietar1 soft7are8 )an1 of the e-4ro#era0es 7ill 2ro5ide 1ou 7ith s2eciali6ed soft7are to 4e a4le to e;ecute the- trades directl1 on 1our screen +ome e-4ro#era0es e5en 2ro5ide s2eciali6e trainin0 ser5ice to familiari6e no5ices 7ith the mechanics of da1 tradin0 and the features of the soft7are +ome soft7are ma1 re9uire s2ecial 0ra2hics cards in the ,' in order to ha5e a - 25 Sunny Agnihotri, T.Y.BBI

E-Finance
t7o-monitor dis2la1 that can contain the se5eral user screens re9uired for the tradin0 acti5it1. S%ART CARDS +mart cards and stored 5alue cards =monetar1 and to#en-4ased>8 em4edded8 7ith inte0rated circuits =I's> and ca2a4le of holdin0 identities8 authori6ations8 certificates8 records8 and monetar1 5alue are of another si0nificant feature of efinance. The1 7ere ori0inall1 in5ented S 41 (oland )oreno in France8 and 7ere de5elo2ed 41 Bull 'om2uters I in France. $e5elo2ed in the late 19&0s the1 4e0an to a22eal in < G7or#a4leG form in the late 19*0s. The1 ha5e 0raduall1 increased in I 2o2ularit1 since that time - 2articularl1 in Euro2e8 7here more than S 100 million 7ere in8 circulation at the end of the 1990s. Their is ran0es from sim2le 2hone cards to credit cards8 and8 ? no7 e5en cards to -access medical ser5ices8 em4edded 7ith #e1 data a4out the cardholder. !nother e;am2le - smart cards can 4e used for 2a1-TE su4scri2tions. The smart card is one of the de5elo2ments from the 7orld of < information technolo01 that 7ill ha5e a si0nificant im2act on e-finance. -T +imilar in si6e to toda1?s 2lastic credit card8 the smart card has a micro2rocessor or memor1 chi2 em4edded in it. The chi2 stores electronic data and 2ro0rams that are 2rotected 41 ad5anced securit1 features. When cou2led 7ith a reader8 the smart card has the 2rocessin0 2o7er to ser5e man1 different a22lications such as secure transactions o5er electronic net7or#s =e.0. +WIFT>. +mart cards can also act as an access-control de5ice8 to ensure that 2ersonal and 4usiness data8 or indeed secure offices or facilities8 are a5aila4le onl1 to authori6ed users.

- 26 -

Sunny Agnihotri, T.Y.BBI

E-Finance
+mart cards can also store Gdi0ital cashG or Gelectronic mone1G to ena4le users to effect 2urchases or e;chan0e 5alue o5er electronic net7or#s. ,ro5idin0 data 2orta4ilit18 securit18 and con5enience8 smart cards come in t7o 5arieties: memor1 cards and micro2rocessor cards. )emor1 cards sim2l1 store data and can 4e 5ie7ed as a data stora0e de5ice 7ith o2tional securit18 7hile micro2rocessor cards can add8 delete8 and mani2ulate information in its memor1 on the card. There are different t12es of securit1 mechanisms - those necessar1 for a memor1 card are less so2histicated than those for a micro2rocessor card. !ccess to the information contained in a smart card is controlled t7o 7a1s: QL Who can access the information =e5er14od18 the cardholder or a s2ecific third 2art1>F and QL @o7 the information can 4e accessed =read onl18 added to8 modified or erased>. %ne form of 2rotection is ci2herin08 7hich is li#e translatin0 the information into some un#no7n forei0n lan0ua0e. +ome smart cards arc ca2a4le of ci2herin0 and deci2herin0 =translatin0 4ar# to an easil1 understood form> so the stored information can 4e transmitted 7ithout com2romisin0 confidentialit1. The im2ortant thin0 a4out smart cards is that the1 are e5er1da1 o4<ects that 2eo2le can carr1 in their 2oc#ets8 1et the1 ha5e the ca2acit1 to retain and 2rotect critical information stored in electronic form. The 2roliferation of this technolo01 is e5ident 7hen one considers that the same electronic function can 4e 2erformed 41 em4eddin0 similar circuits in other - 27 Sunny Agnihotri, T.Y.BBI

E-Finance
e5er1da1 o4<ects8 such as #e1 rin0s8 7atches8 0lasses8 rin0s8 and earnin0s.

'ontacts less card technolo01 also offers si0nificant 2otential in that it calls ena4le the mani2ulation of Gta0s.G Ta0s function li#e contact less smart cards 4ut are in the form of a rin08 stic#er8 or 4a00a0e la4el. The1 can 4e attached to o4<ects such as 0as 4ottles8 cars or animals8 and can hold and 2rotect information concernin0 that o4<ect. This allo7s the o4<ect to 4e mana0ed 41 an information s1stem or customer relationshi2 mana0ement s1stem 7ithout an1 manual data handlin0. The 2ossi4ilities of such s1stems in areas such as in5entor1 control and trade finance are limitless. The current state of de5elo2ment of smart cards is relati5el1 ne78 and has alread1 made a si0nificant im2act in increasin0 the securit1 of transactions and dramaticall1 limitin0 the incidence of fraudulent transactions. For e;am2le8 in France8 7hich has ado2ted the smart card as the standard 2a1ment mechanism of choice for credit cards8 the rate of fraudulent use 2lummeted from se5eral 2ercent =3- D unofficiall1> to under %. D8-radicall1 reducin0 the cost of fraud to han#s. %ther countries such as the H+ and the HC ha5e 1et to ado2t this French de5elo2ed technolo018 no dou4t for reasons of national 2reference. The mart card is in its infanc1 and it 2romises ultimatel1 to influence the 7a1 4usiness8 data 2rocessin0 and c-finance are conducted.

- 28 -

Sunny Agnihotri, T.Y.BBI

E-Finance

RISE O" E-"INANCE AND E(ECTRONIC TRADING $iscount 4ro#er +ch7a4 4e0an 2ro5idin0 its customers 7ith a rudimentar1 ,' tradin0 access in 19/4. The ser5ice 7as 4asic and cum4ersome and routed throu0h relati5el1 slo7 dial-u2 access. True online tradin0 4e0an in the H+! in 199 7hen the first initial 2u4lic offerin0 =I,%> of a com2an1 7as 2laced 5ia the Internet. %5er 3 00 in5estors 2urchased shares8 mar#in0 this the first time securities had actuall1 4een sold 5ia the We4. The +ecurities K E;chan0e 'ommission =+E'> 7as concerned a4out this ne7 acti5it1 and the 2otential 2recedent it mi0ht esta4lishF it therefore in5esti0ated the initial offerin0 and the on0oin0 secondar1 tradin0. The +E' su4se9uentl1 issued a Gno-action letterG sanctionin0 the transaction8 effecti5el1 0i5in0 the 0reen li0ht to true Internet-4ased- tradin0. This led to other 2la1ers 4e0innin0 tradin0. @ere are some of these. QL We4 +treet +ecurities8 EUTrade8 +ch7a48 !meritrade8 and $ate#8 7ho altered their e;istin0 discount 4ro#era0e o2erations in the same 1ear and mi0rated to the Internet. QL We4 +treet +ecurities8 a G2ure 2la1G =i.e. one 7hich e;ists onl1 in a com2uteri6ed state 7ith no traditional G4ric#s and mortarG offices or infrastructure>8 commenced its o2erations in 199& 41 offerin0 customers a fullser5ice information and e;ecution 2latform. - 29 Sunny Agnihotri, T.Y.BBI

E-Finance
+ch7a4 also 4e0an o2erations in 199& 41 4uildin0 its We4-4ased 2latform and offerin0 inno5ati5e online ser5ices and com2etiti5e 2ricin0. Full ser5ice 4ro#ers8 such as )errill .1nch8 )or0an +tanle1 $ean Witter8 and ,aine Wetter8 in contrast8 2referred to 7ait and see the results. B1 2000 +ch7a4 had 3. million acti5e online accounts =e9ual to 0D of its total client 4ase> and 7as e;ecutin0 nearl1 28 08000 trades 2er da1 $iscount 4ro#ers8 7hich had alread1 em4raced technolo01 such as 2hone 4an#in0 and ,' 4an#in0 durin0 the I 9/0s8 too# ad5anta0e of these crum4lin0 entr1 4arriers and 7ere 2articularl1 successful in ada2tin0 to the Internet. Internet 4an#in0 also came to the? fore: the first true Internet 4an# 7as +ecurit1 First Bet7or# Ban# =+FBB>8 created in !tlanta in 199 . In that 1ear the %ffice of Thrift +u2er5ision a22ro5ed the 2ro2osal to chan0e First Federal 4usiness focus from that of a sa5in0s institution to a 2ure 2la1 electronic 4an#. Finance com2an1 'ardinal recei5ed a22ro5al in mid-199 8 chan0ed the 4an#?s name to +FBB and commenced o2erations 41 offerin0 We4-4ased 4alance loo#-u28 unlimited third-2art1 4ill 2a1in08 funds transfers8 loans8 and Federal $e2osit Insurance 'or2oration =F$I'> insured de2osits. !s is t12ica1 in the field of 4an#in0 information technolo018 soft7are and efinance infrastructure s1stems de5elo2ed for in-house uses ha5e a22lications in other industr1 sectors and can8 in turn8 4e sold to defra1 de5elo2ment costs and 0enerate 2rofits. @ence8 2la1ers 7ho ha5e de5elo2ed We4 2latforms can in turn for0e lin#s com4inin0 their 2ro2rietar1 technolo01 solutions 7ith other solutions 2ro5iders in the IT s2here. @ence8 ne7 entities arise 7hich can offer financial institutions an Internet turn#e1 2roduct for online 4an#in0. - 30 Sunny Agnihotri, T.Y.BBI

E-Finance

With 5er1 fe7 e;ce2tions8 the 7orld?s lar0est financial institutions ha5e 0enerall1 failed to act as inno5ators and mo5ers in We4-4ased finance8 and ha5e -dela1ed their offerin0s until ne7 inno5ati5e start-u2s had 4uilt considera4le mar#et shares and 4rand identification. The initial lac# of interest or foresi0ht of ma<or 2la1ers meant that man1 of them found themsel5es chasin0 the u2starts durin0 the late 1990s. %nce it 4ecame clear that Internet4ased commerce 7as a ne7 force that 7as here to sta18 the ma<or 2la1ers8 7ith dee2 2oc#ets8 4e0an to chan0e their tune and 2a1 attention to the de5elo2ments and issues 4ein0 raised 41e-commerce and e-finance. In other 7ords8 institutions mo5ed from den1in0 the need to ha5e an Internet 2resence and usin0 the internet as a medium to diffuse G4rochure 7are8 to em2lo1in0 it as an a00ressi5e8 transaction-ena4led 4usiness-0atherin0 tool. These institutions also reali6ed that the Internet allo7ed them to create a ne7 Ghi0h tech ima0e8 offer ne7 2roducts-ser5ices8 and enlar0e reach-2resence 7ithout ha5in0 to s2end additional ca2ital on 2h1sical e;2ansion. Full ser5ice 4ro#ers such as )errill .1nch and )or0an +tanle1 $ean Witter hence rushed to redefine heir 4usiness models and 2ro5ide customers 7ith ser5ices that more Internet-a00ressi5e firms such as +ch7a4 and !meritrade 7ere alread1 su22l1in0. )errill .1nch moreo5er had to 4ac# out of the comer it had 2ainted itself into in late 199/ 7hen it declared that Gthe do-it-1ourself model of in5estin08 centered on Internet tradin08 should 4e considered as a serious threat to !mericanMs financial li5es.G It is 2articularl1 ironic that lar0e Wall +treet securities firms8 7hich 2ride themsel5es on 4ein0 ade2t8 d1namic8 and - 31 Sunny Agnihotri, T.Y.BBI

E-Finance
res2onsi5e as8 in fact8 the1 are - 7ere una4le to ada2t to the ne7 4usiness 2aradi0m 7ith the same a0ilit1. T5e E-Dimension The le0ac1 s1stem and mi0ration issuesF Entr1 4arriers to e-financeF and Im2lementation issues. ENTR) BARRIERS TO E-"INANCE While e-finance offered ne7 2la1ers the a4ilit1 to circum5ent traditional entr1 4arriers to the financial ser5ices industr18 as it matures it is de5elo2in0 its o7n set of industr1 s2eciali6ations and criteria. E-finance is demolishin0 traditional entr1 4arriers al1d 4usiness models 4ut it is also creatin0 ne7 ones. The erosion of entr1 4arriers can occur due to a 5ariet1 of factors - 4usiness8 technolo0ical8 and re0ulator1. Bota4le chan0es in the re0ulator1 en5ironment8 for e;am2le8 include: G4i0 4an0G - the dere0ulation of the .ondon stoc# mar#et in 19/& =eliminatin0 fi;ed commissions and dissol5in0 the distinction 4et7een 4ro#ers and <o44ers VdealersWF ,assa0e of the (ie0le Beal !ct in 1994 =allo7in0 H+ 4an#s to ser5e customers across state lines>F $ere0ulation of tile To#1o stoc# mar#et in the 1990s =eliminatin0 fi;ed commissions and allo7in0 the creation of discount 4ro#ers>F Erosion of the 3lass-+tea0all !ct in the late 1990s =di5idin0 the 4an#in0 industr1 into in5estment and commercial 4an#s8 allo7in0 them to 2artici2ate in - 32 Sunny Agnihotri, T.Y.BBI

E-Finance
each other?s mar#ets>F and 3lo4ali6ation and financial dere0ulation.

These de5elo2ments8 cou2led 7ith technolo0ical inno5ation8 ha5e led to a 4lurrin0 4et7een traditional and e-finance en5ironments. !s dere0ulation continues to ma#e its 7a1 around the 7orld and ne7 entrants enter 2articular areas of the financial ser5ices industr18 com2etition in finance 7ill accelerate. For 4etter or 7orse8 formida4le entr1 4arriers ha5e historicall1 2rotected the finance industr1. Be7 entrants to the financial mar#ets ha5e needed stron0 mana0ement =includin0 net7or#s and contacts>8 a dee2 #no7led0e of le0al8 o2erational8 transaction8 and credit ris#8 su4stantial financial resources8 efficient customer ser5ice8 and technolo0ical 2ro7ess. !s financial ser5ices ha5e 0ra5itated to the Internet some of these 4arriers to entr1 ha5e alread1 4een erodedF ho7e5er8 man1 of the s2ecific s#ills relatin0 to the financial ser5ices industr1 need to 4e honed and de5elo2ed further. For e;am2le8 ris# mana0ement needs to 4ecome more ro4ust in the face of increasin0 s2eed and 5olatilit1 in the mar#ets. This need translates into the need for efficient data4ase mana0ement8 one time data entr1 at deal ca2ture8 and the 2roduction of online real time mana0ement information s1stems re2orts. (i6$i#ity an# risk management !nother matter of concern to start-u2s is ensurin0 that sufficient ca2ital is a5aila4le to su22ort the entire ran0e of 4usiness and o2eratin0 ris#sF - 33 Sunny Agnihotri, T.Y.BBI

E-Finance
insufficient ca2ital can still act as entr1 4arrier and im2act li9uidit1 for on0oin0 o2erations. (is# can assume 5arious formsF classic credit ris# from loans8 deri5ati5es ris#8 interest rate ris#8 and currenc1 rate ris#8 le0al ris#8 documentation ris#8 and com2liance ris#. +ufficient li9uidit1 is therefore essential in ensurin0 that the com2an1 can 7eather mar#et 5olatilit1. Entr1 4arriers can 4e made more difficult 41 Issues of 4rand name8 ima0e and Gtrust8G - intan0i4les 7hich all ta#e time to esta4lish. While ma<or financial institutions 7ith Xdee2 2oc#etsG can theoreticall1 afford to #ee2 fundin0 a loss-ma#in0 Internet 5enture until it 4e0ins to 0enerate 2rofits8 smaller entities ans7era4le to 5enture ca2italists or other in5estors do not ha5e this lu;ur1. The1 must 4e0in to 0enerate a return for in5estors 7ithin a short-term time frame 4efore de2letin0 the seed mone1 =the G4um rateG>. It should also 4e noted that since financial 2roducts are relati5el1 0eneric8 the differentiatin0 factor is lar0el1 2erformance-related. !ccordin0l18 the financial sector has traditionall1 4een stron0l1 reliant on8 and a hea51 in5estor in8 information -technolo01 infrastructure in order to achie5e 4usiness ad5anta0e in 5arious sectors8 includin0 deli5er18 tradin08 re2ortin08 2rocessin08 and control. These hea51 in5estments also tend to act as an entr1 4arrier8 althou0h the ad5ent of e-finance has made it easier for ne7 2la1ers lac#in0 a G4ric#s and mortarG infrastructure to mount a challen0e to esta4lished 2la1ers. With the e;ce2tion of 4rand name and ima0e8 5irtuall1 all other hurdles are 9uite surmounta4le. ,la1ers in e-finance ne5ertheless ha5e found the com2etiti5e en5ironment difficult to na5i0ate. )an1 s2eciali6ed 2la1er8 such as Bean6 =electronic mone1 - 34 Sunny Agnihotri, T.Y.BBI

E-Finance
or to#ens>8 ha5e discontinued o2erations. Thou0h 4arriers to entr1 are lo7er8 ada2tin0 financial ser5ices to the We4 remains a com2le; tas#.

I%P(E%ENTATION ISSUES The im2lementation issues facin0 4an#s are often dift1cult and contradictor1. +1stems can 4e im2lemented in a 5ariet1 of 7a1s8 and include a ran0e of issues8 of 7hich the follo7in0 are? e;am2les. => !rom scratch - This a22roach is ad5anta0eous8 as state of the art s1stems can 4e desi0ned on a clean slate8 there41 usin0 recent technolo01 and ensurin0 future e5olution. The strate01 is 2ossi4le in cases of han#s 4uildin0 u2 ne7 s1stems such as in Eastern Euro2e. It can8 ho7e5er8 4e un-cost effecti5e in mature han#s 7here le0ac1 s1stem issues arise. => #n top of e$isting systems - This is the usual case in mature mar#ets 7here le0ac1 s1stems re2resentin0 considera4le in5estments art-2resent. Im2lementin0 s1stems en to2 of e;istin0 s1stems re9uires inte0ration s#ills and 5alue-added com2etencies. @ere the im2lementation issues faced 41 the hard7are and soft7are teams reside 2rimaril1 on s1stem inte0ration s#ills. %ften solutions re2resent either a corn 2romise or are cum4ersome8 7ith the use of emulator and con5ersion 2rocesses for data4ases. => Role of consultants - The1 are usuall1 4rou0ht in to e;amine the client?s e;istin0 IT infrastructures and to anal16e their needs8 and then formulate hard7are and soft7are recommendations as 7ell as the im2lementation - 35 Sunny Agnihotri, T.Y.BBI

E-Finance
strate01. The ad5anta0e is that a 5endor inde2endent o2inion is theoreticall1 2ossi4le the disad5anta0e is that 1ou are dealin0 7ith 0eneralists as o22osed to s2eciali6ed e;2erts. => %fter-sales support - ! Gnon-technicalG issue 4ut ne5ertheless crucial in the lon0 run. !fter-sales su22ort do5etails 7ith 5endor reliance8 and a close loo# at the 5endor?s 2roduct de5elo2ment strate01 and lon0-term 5ia4ilit1 should 4e made. !fter-sales su22ort can also include factors such as the financial situation of the com2an18 its? 2roduct de5elo2ment strate018 its adherence to or su22ort of industr1 standards8 its 0eo0ra2hical co5era0e8 etc. Traditionall18 4an#in0 mana0ement ill 0eneral and8 in 2articular8 at the 4usiness function le5el =head office or 4ranch> has 4een dismissi5e or e5en hostile to the on0oin0 role of IT and IT consultants in their 4usiness. Enli0htened mana0ement has8 ho7e5er8 alread1 reali6ed that further de2lo1ment of IT at the 4ranch and indi5idual user le5els is not onl1 useful for cuttin0 costs 4ut it is also 5ital as a strate0ic 7ea2on to increase 5alue-added ser5ices8 com2etiti5eness8 and customer lo1alt1. This difference is li#el1 to 4e at the core of the com2etiti5eness ena4lin0 com2an1 success or failure. Enli0htened mana0ement 7ill also ha5e reali6ed that in5estment in a22ro2riate IT s1stems 7ill 4e central to an1 effort to transform 4an#s from 2roduct-dri5en to customer-dri5en or0ani6ations8 in 2articular at the 4ranch le5el

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Sunny Agnihotri, T.Y.BBI

E-Finance

T5e Glo7al Dimension In5estment 4an#in0 and cor2orate 4an#in0 ser5icesF Electronic forums in in5estment 4an#in0F 'or2orate 4an#in08 includin0 +T,8 clearin08 and settlementF +)E issues =small-to-medium 4usiness>F (etail 4an#in08 includin0 online tradin0 and 4an#in0F E-cash and electronic 2ursesF and 'ritical issues for e-finance. The com4inin0 of the 0ro7th in the Internet and ne7 technolo0ies 7ith the trends of economic 0lo4ali6ation8 mer0ers8 and concentration antinationali6ation of the financial ser5ices industr18 is leadin0 to numerous si0nificant de5elo2ments in the arena of the finance. E-finance is a 4road field and it is im2ossi4le to descri4e technical de5elo2ments in meanin0ful detail at the macro le5el. These de5elo2ments are im2actin0 5arious s2eciali6ed sectors or su4sets of the financial ser5ices industr1. We therefore8 loo# at some discrete industr1 sectors and see ho7 the im2act of e-technolo01 has affected them: In5estment 4an#in0 and cor2orate 4an#in0 ser5ices Electronic forums in in5estment 4an#in0 'or2orate 4an#in0 - 37 Sunny Agnihotri, T.Y.BBI

E-Finance
%ther ser5ices: +T,8 clearin0 and settlement8 +)EMs (etail 4an#in0 %nline tradin0 %nline 4an#in0 E-cash and electronic 2urses. IN,EST%ENT BAN&ING AND CORPORATE BAN&ING SER,ICES While in5estment 4an#in0 is still8 at its core8 a relationshi2 4usiness dri5en 41 2ersonal contacts and face-to-face ne0otiations8 certain as2ects of the disci2line are no7 4ein0 conducted electronicall1. A, )or0an 'hase has de5elo2ed a dedicated We4 2latform for its in5estment 4an#in0 clients #no7n as 'hase+2ace. This is 4asicall1 an ela4orate 4rochure 7are We4site diffusin0 'hase documentation such as research8 streamin0 audio-5ideo re2orts8 mar#et commentar18 securities 2rices8 and other dealrelated information. )ost other ma<or 4an#s ha5e also set u2 similar ela4orate G4rochure 7areG sites. The de5elo2ment of We4sites ena4lin0 actual tradin08 ho7e5er8 is another stor1. )uch 2ro0ress remains to 4e done in this area o7in0 to cultural reticence and securit1 concerns. +ome de5elo2ments ha5e occurred in the secondar1 loan mar#et tradin0 area. %ther #e1 areas of online in5estment 4an#in0 center on matchin0 4u1er and sellers of 4usinesses or loans8 and lin#in0 users and 2ro5iders of 2ri5ate ca2ital. We shall consider each of these cases.

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Sunny Agnihotri, T.Y.BBI

E-Finance

CORPORATE BAN&ING 'or2orate 4an#in0 has 4een a hea51 user of IT. In order to 2ro5ide 4es2o#e and 2ersonali6ed ser5ices to ma<or cor2orate clients8 ma<or 4an#s in certain cases ha5e 2artnered 7ith technolo01 2ro5iders to create dedicated cor2orate 4an#in0 ser5ices. For e;am2le8 'iti4an# and Bottomline Technolo01 ha5e 2roduced an online cor2orate 4illin0 s1stemF and Ban# %ne has 2artnered 7ith E$+ to 2roduce a <oint in5oice-2a1ment solution. @ere are some e;am2les of facilities offered 41 indi5idual 4an#s. 'iti4an# offers its cor2orate customers 4illin08 cash mana0ement8 custod18 and trade finance ser5ices. $eutsche Ban# offers cash mana0ement8 2ortfolio mana0ement8 and custod1 a22lications. 'hase offers loan s1ndication8 2urchasin08 trade finance8 0lo4al custod18 and treasur1 mana0ement ser5ices. Ban# of !merica features treasur1 mana0ement and ca2ital mar#ets ser5ices. (o1al Ban# of +cotland offers 2a1ment reconciliation8 e;2ort collection8 letter of credit8 and cash mana0ement ser5ice. +5ens#a @andels4an#en and !BB !)B(% after treasur1 and trade-related ser5ices. - 39 Sunny Agnihotri, T.Y.BBI

E-Finance
In 2001 a 4an#in0 consortium includin0 Banco +antander'@8 'ommer6-4an#. (o1al Ban# of +cotland8 +an ,aoio I)I8 and +ociete 3enerate introduced an online 2latform for cor2orate 'ustomers 7ho allo7s them to deal in treasur1 and ca2ital mar#ets 2roducts =includin0 FN8 s1ndicated loans8 and interest rate deri5ati5es>.

S%E clients The +)E =small-to-medium 4usiness> sector is also 4ecomin0 an im2ortant focal 2oint for 5arious 7e4- 4an#in0 ser5ice 2ro5iders. )an1 esta4lished institutions ha5e reali6ed that +)E We4 4an#in0 re2resents an im2ortant8 and lar0el1 unta22ed8 se0ment of the industr1. The small 4usiness 4an#in0 mar#et is alread1 technolo0icall1 7ired =7ith Internet 2enetration that e;ceeds *0D> and lends itself to hi0her fees and lar0er 4alances than the retail mar#et8 ma#in0 it a 2otentiall1 attracti5e source of re5enues. Industr1 research indicates that there are rou0hl1 23 million +)E accounts in the H+! that can 4e readil1 mi0rated to the We4. )ost +)E We4-4an#in0 2latforms offer 4asic ser5ices such as cash mana0ement8 treasur1 mana0ement8 accounts recei5a14le mana0ement8 etc. Esta4lished financial institutions such as 'hase8 'iti4an#8 Barc1a1s8 $eutsche Ban#8 @+B'8 +ociete 3enerale8 and Bational !ustralia Ban# ha5e tailored their storefront 2latforms to cater e;clusi5el1 to small 4usiness. The si0nificant issue here is that e-finance8 7hich u2 until no7 has meant electronic ser5ices for ma<or cor2orate clients8 is no7 mo5in0 to7ards the +)E sector.

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Sunny Agnihotri, T.Y.BBI

E-Finance

RETAI( BAN&ING (etail 4an#in0 acti5ities ha5e 4een si0nificantl1 im2acted 41e-finance technolo01. From the 4e0innin08 7hen ! T)s and tele2hone 4an#in0 made the initial inroads8 the mar#et has e5ol5ed to more direct modes of contact 7ith clients. Online tra#ing %nline tradin0 has re5olutioni6ed and 2o2ulari6ed the conce2t of We4-4ased retail financial ser5ices. Thou0h electronic 4an#in0 e;isted on home ,'s 7ell 4efore the Internet 4ecame 2art of the mainstream8 it 7as the de5elo2ment of useful8 fle;i4le8 and secure online tradin0 mechanisms that created consumer interest in We4-4ased financial ser5ices. %nline tradin0 has 4rou0ht e-finance into the mass mar#et and is the #e1 Vactor in ensurin0 the customer lo1alt1 that is necessar1 for most 4usiness models. This mass enthusiasm is hardl1 sur2risin0 in that it has em2o7ered indi5idual in5estors to mana0e their in5estment and retirement assets more 2roacti5el1. This occurs a0ainst the 4ac#dro2 of concern o5er future state retirement - 41 Sunny Agnihotri, T.Y.BBI

E-Finance
schemes and the li4erali6ation of in5estment rules allo7in0 for more fle;i4le and acti5e 2artici2ation 41 indi5iduals. )an1 in5estors ha5e ta#en a ?do-it1ourself a22roach to financial mana0ement8 reducin0 their reliance on financial 2lanners8 ad5isers8 and 4ro#ers8 and conductin0 their tradin0 acti5ities 5ia ser5ice 2ro5iders such as +ch7a4 and E-Trade.

3ro7th areas include mature8 de5elo2ed mar#ets such as +7eden8 3erman18 France8 and +7it6erland. In most cases online tradin0 in the H+ is still limited to the H+ mar#ets8 unless s2ecial arran0ements or alliances are concluded 7ith other international 5entures8 or indi5idual su4sidiaries8 are esta4lished in local mar#ets. To offer customers international access8 it 4ecomes necessar1 to create se2arate su4sidiaries to deal in those mar#ets. Features offered 41 most online tradin0 2latforms include real-time 9uotes8 trade e;ecution8 research alerts8 I,% access8 2ortfolio trac#in08 stoc# filterin08 financial 2lannin08 2osition u2dates8 4u1in0 2o7er notification8 trade histor18 2rofit and loss accountin08 multi2le account access8 and headline ne7s. Trade e;ecution modules t12ical11 let in5estors select the t12e8 of 4u1-sell order desired8 includin0 limit orders =e;ecutin0 at a s2ecified 2rice>8 mar#et orders =e;ecutin0 at the 2re5ailin0 2rice>8 mar#eta4le limit orders =e;ecutin0 at no 7orse than the 2rice s2ecified>8 0ood-till-cancelled orders =#ee2in0 an order Gali5eG until it is e;ecuted or cancelled>8 till-or-#ill orders =tillin0 the entire order or none at all>8 and so on. $a1 tradin08 in 7hich in5estors e;ecute do6ens8 or hundreds8 of trades in the ho2e of ca2turin0 small s2reads8 has 4een in e;istence since the earl1 19/0s. )ost G2rofessionalG da1 traders8 7ho t12icall1 trade in 00-1000 share 4loc#s8 ha5e historicall1 relied on electronic - 42 Sunny Agnihotri, T.Y.BBI

E-Finance
direct access tradin0 =E$!T> 2latforms that include dedicated communications lines8 0uaranteed instant access to a mar#et2lace and rich8 real-time 9uotes. 'ertain dedicated retail 4ond tradin0 ser5ices ha5e also emer0ed8 includin0 5entures such as Bonds online8 Bondtrac8 BondE;-chan0e8 and BondE;2ress. With more than 100 online tradin0 firms in o2eration in the H+8 and a similar num4er acti5e a4road8 com2etition is considera4le. OnlineBanking %nline 4an#in0 is a 4road sector that co5ers chec#in0-sa5in0s-de2osits8 4alance information8 fund transfers8 2a1ments8 and credit ser5ices. Earious models are used to deli5er online 4an#in0 ser5ices to the 2u4lic. With 0ro7in0 demand for such ser5ices8 ne7 and esta4lished institutions ha5e 4een de5elo2in0 their online offerin0s in order to meet customer e;2ectations. +olutions 2ro5iders ha5e also stri5en to u20rade IT infrastructure to cater to the e;2ected need for online 4an#in0. +ome e-finance models are: QL 'or2orate storefront model =7here indi5idual financial institutions 2ro5ide clients 7ith 2ro2rietar1 4an#in0 2roducts-ser5ices>F QL Eertical 2ortal model =7here 5ertical 2ortals o2erated 41 han#s or non4an#s 2ro5ide customers 7ith 4an#in0 ser5ices in 2arallel 7ith other ser5ices>F and QL 'ertain se0ments of online 4an#in08 includin0 mort0a0es and loans8 also ma#in0 use of the mar#et2lace model. Thou0h man1 ma<or 4an#s no7 feature so2histicated transaction-ena4led - 43 Sunny Agnihotri, T.Y.BBI

E-Finance
ser5ices8 most ha5e had to re5am2 their 2latforms as their 4usiness model chan0es. )oreo5er8 certain cultural characteristics 2ersist - some certain industr1 studies su00est that 2urchasers of lon0-term de2osits often li#e to conduct their 4usiness in 2erson8 rather than o5er the We4F the same is true for customers ta#in0 on lar0e financial commitments8 such as mort0a0es and home e9uit1 loans. It 7ill ta#e time 4efore these consumers 0ain 0reater confidenc 7ith the Internet. While total re5enues deri5ed from online o2erations remain relati5el1 small at 2resent8 the1 are e;2ected to increase o5er time as more 4usiness is conducted 5ia the We4. It is e;2ected that this 7ill 4e the case sim2l1 due to the economic facts of lo7ered transaction costs once the fi;ed costs relatin0 to the creation of the infrastructure are co5ered. Earious industr1 studies confirm that this 0ro7th 7ill 4e stron0 in the H+!: Au2iter estimates that 2 million accounts 7ill 4e o2erational in 20038 7hile I$' forecasts some 40 million accounts. The main H+ han#s such as Ban# of !merica8 'iti4an#8 Ban# %ne8 and 'hase ha5e made considera4le 2ro0ressF 41 2000 the We4 2latforms of 'iti4an# and Ban# of !merica had 4et7een 008000 and 2 million accounts each. %nline 4an#in0 is also 0ro7in0 in Euro2e8 'anada8 and !ustralia. In contrast to the H+ ho7e5er8 there are 5er1 fe7 G2ure 2la1G han#sF most are 5entures set u2 41 esta4lished 4an#s that 2ercei5e this de5elo2ment as a threat8 and therefore feel the need to 4e ?2resent. Earious industr1 studies also confirm that e;2ected 0ro7th in Euro2e 7ill 4e stron08 7ith the main mar#ets 4ein0 the HC8 3erman18 France8 +7it6erland8 Benelu;8 and +candina5ia. +ome of these online 4an#s carr1 the 2arent or0ani6ation?s 4rand 7hilst others are ne7 4rands. - 44 Sunny Agnihotri, T.Y.BBI

E-Finance
Electronic 2a1ments are an increasin0l1 im2ortant area of focus for 4an#s. The Internet has made it theoreticall1 2ossi4le for households to e;tend similar functionalit1 to mana0e the electronic 2a1ment of 4ills and the electronic transfer of small 5alue 2a1ments.

CRITICA( ISSUES "OR E-"INANCE Com3$ter sec$rity Toda1?s securit1 issue is 2articularl1 trou4lesome 4ecause of the 5ast-ness of the Internet8 the ease of access8 and the lac# of central control. +ecurit1 is e;2ected to im2ro5e as chi2 cards 2ro5ide a 2rotected mechanism for electronic funds. !dditional de5elo2ments in encr12tion technolo018 fire7all s1stems8 and sur5eillance s1stems 7ill further 2rotect Internet transactions. The securit1 issue8 althou0h e;tremel1 im2ortant8 is not the onl1 or the 4i00est issue to address 7hen considerin0 the Internet for commercial use. E,O(,ING TEC/NO(OG) O" E-"INANCE To com2ete in the di0ital econom18 technolo01 architecture has to 4e fle;i4le8 scala4le8 relia4le8 and cost-effecti5e. Rou ha5e to 4e a4le to chan0e 9uic#l1 to meet the demands of the mar#et. In the financial industr18 7ireless technolo01 2ro5ides a le5el of con5enience to e;tend to the indi5idual. @a5in0 a 7ireless e;tension into the technolo01 4ac#4one is 0oin0 to 4e as im2ortant as ha5in0 - 45 Sunny Agnihotri, T.Y.BBI

E-Finance
an Internet com2onent 7as three 1ears a0o. +ometimes chan0e is ha22enin0 so fast that it can 4e almost o5er7helmin0. To 0ain some 2ers2ecti5e 7e need to ste2 4ac# and remem4er ho7 far 7e?5e come in <ust a fe7 1ears.

NE. TRENDS AND BUSINESS %ODE(S +e5eral trends and 4usiness models are ha5in0 a 2rofound effect on the financial industr1. The 0ro7in0 2o7er and cost-effecti5eness of communications and com2utin0 technolo0ies8 includin0 the Internet8 are at the heart of these chan0es. +ince 19/08 there ha5e 4een three ma<or 2aradi0m shifts. QL Firstl18 the transition from the mainframe to the ,'8 7hich 4rou0ht com2utin0 2o7er to the indi5idual. QL Be;t8 the introduction of the 0ra2hical user interface alon0 7ith lo7er 2riced ,'s8 7hich made ,'s eas1 to use8 afforda4le and accessi4le to consumers. QL !nd thirdl18 the commerciali6ation of the Internet8 7hich connected all these com2utin0 de5ices to a net7or#. Toda18 net7or#s are out2acin0 the im2ortance of the ,'. The o2en nature of - 46 Sunny Agnihotri, T.Y.BBI

E-Finance
the Internet and its commerciali6ation are #e1s to a re5olution in the 7a1 7e communicate. It has allo7ed one-to-one communications in 7a1s that 7ere 2re5iousl1 im2ossi4le 4et7een t7o 2eo2le8 directl1 4et7een 4usiness and customer8 directl1 4et7een 4usiness and 4usiness. Time and 0eo0ra2h1 harriers ha5e disa22eared and ne7 mar#ets ne5er 4efore accessi4le ha5e o2ened. @o7e5er8 Internet technolo01 is still in its infanc1 and considera4le im2ro5ements in relia4ilit1 and confidentialit1 7ill need to he achie5ed 4efore it 4ecomes the natural medium for e-finance. Sur&ey Report &otak %a5in#raBank T5e Bank8Esta4lished in 19/48 Cota# )ahindra is one of India?s leadin0 financial institutions8 offerin0 com2lete financial solutions. From commercial 4an#in08 to stoc# 4ro#in08 to mutual funds8 to life insurance8 to in5estment 4an#in08 the 0rou2 caters to the financial needs of indi5iduals and cor2orates. In Fe4ruar1 20038 Cota# )ahindra Finance .td8 the 0rou2?s fla0shi2 com2an1 7as 0i5en the license to carr1 on 4an#in0 4usiness 41 the (eser5e Ban# of India =(BI>. Cota# )ahindra Finance .td. is the first com2an1 in the Indian 4an#in0 histor1 to con5ert to a 4an#. (ecentl18 Cota# )ahindra Ban# .td and @$F' Ban# ha5e si0ned a )emorandum of Hnderstandin0 to share their !T) net7or#. This a0reement 7ill 0i5e customers of the t7o 4an#s access to o5er 1400 !T)s across the - 47 Sunny Agnihotri, T.Y.BBI

E-Finance
countr1. While @$F' Ban# has 133 !T)s across 22/ locations in the countr18 Cota# )ahindra Ban# has * !T)s at 41 locations8 accessi4le 24 hours a da18 3& da1s a 1ear. Cota# )ahindra Ban# is offerin0 access to @$F' Ban# !T) net7or# free of cost to most of its customers. The char0es for @$F' Ban# customer for usin0 Cota# )ahindra?s !T)s are (s. 1/ for 'ash 7ithdra7als and (s. * for "uer1-4ased transactions such as 4alance en9uir1.

T5e Branc5 8The 4ranch is runnin0 on 100D core ri0ht from 7hen it started. The 4ranch 2ro5ides ser5ices li#e:Electronic Fund Transfer (eal Time 3ross +ettlement +WIFT Bet Ban#in0 ,hone Ban#in0 +mart 'ards Branch Ban#in0 (etail .oans 'or2orate Ban#in0 !sset )ana0ement In5estment Ban#in0

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Sunny Agnihotri, T.Y.BBI

E-Finance
Bro#in0 Treasur1 !sset (econstruction .ife Insurance and etc. The Ban# is noted for its inno5ati5e ser5ices and has acti5e in 2ioneerin0 ne7 initiati5es for its domestic-7ide clients. It introduced a 5ariet1 of financial 2roducts 5ia an increasin0 num4er deli5er1 channels li#e8 Branch Tellers8 !T)Ms and etc. With the li4erali6ation of the Indian econom1 in the 90Ms and re0ulator1 chan0es8 the 4an# e;tended its 2ortfolio of ser5ices in the area of in5estment 4an#in08 retail 4an#in08 treasur1 ser5ices and of course internet 4an#in0.

T5e C$stomer8Basicall1 the customers demand for EFTMs8 +WIFT8 +mart 'ard and etc. !s the customers are 0enerall1 hi0h 2rofile there demands are also hi0h and the 4an# 4elie5es in 2ro5idin0 efficient ser5ices to there customers. Basicall1 there is a demand for o5erseas transfer so the1 are 2ro5ided 7ith +WIFT. If the demand for an inter 4an# transfer or a 4ranch to 4ranch the1 are 2ro5ided 41 (T3+ or 41 EFTMs. E5er1 customer is 4een 2ro5ided 41 a !T) card 7ell #no7n as a de4it card8 a net 4an#in0 id and a 2hone 4an#in0 id as and 7hen he o2ens an account in the 4an#. The current account holders are not se5ered 7ith these ser5ices. - 49 Sunny Agnihotri, T.Y.BBI

E-Finance

Bi7liogra35y Internet sites8

QL 777.!li4a4a.com QL 777.4namericas.com QL 777.4ondnet.com QL 777.$e5elo2mentE;.com QL 777.e4an.com QL E2lus.com E9uit1 .in#.com QL FT.com 0lo4al archi5es 3EN+.com 0lo4alfinanceonline.com - 50 Sunny Agnihotri, T.Y.BBI

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BOO&S QL Insi0ht E(, E-Finance

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Sunny Agnihotri, T.Y.BBI