Trends in

MEANING OF TREND
THE GENERAL DIRECTION OF A MARKET OR OF THE PRICE OF AN ASSET. TRENDS CAN VARY IN LENGTH FROM SHORT, TO INTERMEDIATE, TO LONG TERM. IF YOU CAN IDENTIFY A TREND, IT CAN BE HIGHLY PROFITABLE, BECAUSE YOU WILL BE ABLE TO TRADE WITH THE TREND.

MEANING OF BANK
AN ESTABLISHMENT AUTHORIZED BY A GOVERNMENT, TO ACCEPT DEPOSITS, PAY INTEREST, CLEAR CHECKS, MAKE LOANS, ACT AS AN INTERMEDIARY IN FINANCIAL TRANSACTIONS, AND PROVIDE OTHER FINANCIAL SERVICES TO ITS CUSTOMERS.

TYPES OF BANKS
Types of Banks

Central Bank (RBI, in India)

Development Banks

Specialized Banks (EXIM Bank SIDBI, NABARD)

Commercial Banks (i) Public Sector Banks (ii) Private Sector Banks (iii) Foreign Banks

Co-operative Banks (i) Primary Credit Societies (ii) Central Co-operative Banks (iii) State Co-operative Banks

FUNCTION OF BANKS
The functions of commercial banks are of two types. (i) Primary functions a) Accepting deposits; and b) Granting loans and advances. (ii) Secondary functions a) Issuing letters of credit, travelers cheque. b) Providing customers with facilities of foreign exchange dealings. c) Providing consumer finance for individuals

ROLE OF BANKING
It encourages savings habit amongst people. Acts as an intermediary between people having surplus money and those requiring money for various business activities. Provides loans and advances to businessmen for short term and long-term purposes. Helps in raising the standard of living of people, by providing loans for purchase of consumer durable goods, houses, automobiles, etc.

DISTINCTION BETWEEN BANKS AND MONEYLENDERS

Basis 1. Entity 2. Activity Banks Organized institutions. Moneylenders Unauthorized individuals.

Acceptance of deposits as well as May not include acceptance of lending of money. deposits. Meet the needs of people in general and the business community in particular. Banks accept tangible and personal security against loans. Flexible. Interest charged by banks on loan is governed by RBI. Meet the needs of agriculturists and poor people. Accept gold, jewellery or land as security for giving loan. Rigid and strict. Rate of Interest is decided by the moneylender and is normally very high.

3. Clients

4. Security

5. Process of recovery of loans. 6. Interest Rate

EMERGING TRENDS IN TECHNOLOGY ADOPTION BY INDIAN BANKS AND IT

INTRODUCTION
Technology has become the driver of the Indian banking business since the past decade with the financial sector reforms providing firm foundation. The question of implementing technology has now transformed into the cost per transaction through a branch, ATM and Internet works out to about Rs.66, Rs.22 and Rs.10 respectively. Technology has resulted in improved quality of service, any time/any where banking and better service.

STATUS OF IT ADOPTION BY BANKS

The foreign banks operating in India made the beginning and the new private sector banks aggressively started pursuing technology-based service offering. The technology adoption by sectors and their swift adoption by the competitors since the middle of the past decade have forced these banks also to get into the act by beginning to offer IT-facilitated products and services. There are over 11,000 ATMs across the country and 11 million net connections with around 23 million users.

TRENDS AND OPPORTUNITIES

Technology has enabled the banks to conceive deliver, manage and integrate their products in line with the customers' need. A range of services is now provided to both retail and corporate customers The day is not far off when the banks would be viewed more as technology companies offering banking products and services and services. More technology spends are expected in the near future on various other areas.

CHALLENGES
While development in technology have thrown-up an array of opportunities for the banks, they have also brought along a whole set of challenges to deal with. As the life cycle of the technological products is becoming shorter, banks have to consider the costs of huge investments made in the hardware and software their expected benefits.

 Unfortunately, the response of the customers to the services offered through the new channels can be fickle. For example, as per a survey conducted sometime ago by C Fore for Outlook Money in the four metros and Bangalore, 63% of the respondents used ATMs while 80% went to branches. The utlisation of tele/net banking was just around 4%.

Let s take a look at the following banking trends

1. E-banking (Electronic Banking) 2. Social Media 3. An Age of Transparency 4. Savings Growth 5. Female Centric Banking 6. Digital Signage 7. Personalization

1. E-banking (Electronic Banking)

Automated Teller Machine Debit Card Credit Card Net Banking Phone Banking

The banking industry needs to be innovative in service offerings

2. Social Media
Bank of America was the first bank to provide customer service via Twitter and in review of the site, many of the same questions asked by followers are like those I would typically ask via telephone banking or in person at the branch.

3. An Age of Transparency
More and more banks are creating a welcoming and very transparent space. Gone are the days of floor to ceiling marble, dark mahogany office furniture and hidden vaults. Design firms across North America are introducing more glass, open office spaces and meeting rooms.

4. Savings Growth
Banks across North America have come up with instant savings campaigns to hopefully have clients, Buy into savings where many banks are putting up to an extra $250 in the pockets of their most loyal savers. Campaigns such as the Keep the Change from Bank of America, rounding up and rounding your Purchases change into your savings account. MyBankTracker.com states this ad campaign was based on research that shows during such a time of financial Crisis, people are less interested in bigger picture ideas but rather straight forward ways their bank can help them save money.

5. Female Centric Banking

Women are becoming a very dominant player in today s society and this calls for action by many of the retail banks around the world. In South Africa and Australia, 1st for Women is the first home and car insurance designed specifically for women. Campaigns today, such as Citi banks, Dividends are a girl s best friend.

7. DIGITAL SIGNAGE
Digital signage can be used for many different purposes. LCD screens are an easy and somewhat inexpensive solution to provide public info, relay corporate messages, sell products, solidify a brand, influence customer behavior, and enhance the environment with wayfinding more so than the typical poster. These screens themselves become a fun interactive way for children, teens and young adults to use within the retail-banking environment.

8. PERSONALIZATION
The ability to identify each consumer with unique identifiers with use of such technologies as Bluetooth, face recognition software and credit cards, to name just a few have increased the ability of identifying unique behaviors of customers. The key leading edge of personalization is the move toward mass customization in order to gain greater market share within the manufacturing and service industry. Mass customization, the ability to provide products and services tailored to the specific needs of customers started within the technology industry. of IT companies as other industries such as financial institutions have recognized the benefits of offering tailored products and services to their customers.

CONCLUSION
1. E-banking has made life more convenient, however if not executed properly it could come across as fake and unsecure 2. Social media will help promote a brand, but if the customer service isn t there to back up the new trend then customers might take advantage of the open door policy 3. Transparency throughout the banking world is now demanded by the North American consumer and this changes the environment in which we do our banking 4. Savings growth is an automatic solution for those who have trouble saving for potential emergencies 5. The female shopper is playing a stronger role in the financial game of life and has caused the male dominated board to rethink offerings for a different kind of consumer 6. Digital signage is presenting new and efficient ways to market a brand, but if the content isn t developed properly the tech savvy consumer will see right thru the smoke and mirrors 7. Personalization will be the standard in how to engage and build brand Loyalty Life is moving quickly and the retail banking industry needs to be innovative in what they offer and detailed with their goals to maintain relevancy and success in today s rapidly changing marketplace. The next time you go to your bank Iurge you to ask yourself are you another account number or is your bank a financial partner you can trust?

CUSTOMER ACQUISITION COST IS FAR HIGHER THAN RETENTION COST, SO INSTEAD OF LOOKING FOR NEW CUSTOMERS, IT MAKES MORE SENSE FOR A BANK TO ENGAGE AN EXISTING CUSTOMER IN MULTIPLE SERVICES.

MEANING OF INSURANCE
A PROMISE OF COMPENSATION FOR SPECIFIC POTENTIAL FUTURE LOSSES IN EXCHANGE FOR A PERIODIC PAYMENT. INSURANCE IS DESIGNED TO PROTECT THE FINANCIAL WELL-BEING OF AN INDIVIDUAL, COMPANY OR OTHER ENTITY IN THE CASE OF UNEXPECTED LOSS.

EXAMPLES INCLUDE : CAR INSURANCE, HEALTH INSURANCE, DISABILITY INSURANCE, LIFE INSURANCE, AND BUSINESS INSURANCE

HISTORY OF INDIAN INSURANCE

BRITISH-INDIA PERIOD
Insurance in India started in the nineteenth century. British insurance companies dominated the market serving mostly large urban centers. Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. Bombay Mutual Life Assurance Society indicated the birth of first Indian life insurance company in the year 1870. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies.

Liberalization of Indian Insurance

1994 : Insurance sector invited private participation to induce a spirit of competition. 1997 : Insurance regulator IRDA was set up. a) To provide greater autonomy to insurance companies in order to improve their performance. b) To Protect the interest of holders of insurance policies. c) To end the monopoly of the Life Insurance Corporation of India and General Insurance Corporation and its subsidiaries .

 In the first year of insurance market liberalization (2001) as much as 16 private sector companies including joint ventures with leading foreign insurance companies have entered the Indian insurance sector. Of this, 10 were under the life insurance category and six under general insurance. Thus in all there are 25 players (12-life insurance and 13-general insurance) in the Indian insurance industry till date.

INDIAN INSURANCE IN 21ST CENTURY

2000 : IRDA starts giving licenses to private insurers : ICICI prudential and HDFC Standard Life insurance first private insurers to sell a policy . 2001 : Royal Sundaram Alliance first non life insurer to sell a policy. 2002 : Banks allowed to sell insurance plans. 2007 : First Online Insurance portal, set up by an Indian Insurance Broker, Bonsai Insurance Broking Pvt Ltd.

INSURANCE TRENDS IN INDIA

Due to de-regulation in Indian Insurance industry, the monopoly of public sector companies in life insurance and general insurance has come to an end. Due to this innovative practices initiated by the private players. Growth in the technology such as internet has further created a wave of excitement in the insurance market. Indian economy and Indian Insurance sector is committed to a double digit growth.

 Insurance is a Rs 450 billion industry in India. Indian Insurance market was at its all time high in 2003 with a growth of about 17.4% over the pervious year. Since 2001 Insurance is growing at the rate of 15-20 % annually. The gross premium as a percentage of the GDP has gone up from 2.3 in the year 2000 to 4.8 in 2006. Together with banking services, it adds about 7% to the country s GDP.

ONLINE INSURANCE IN INDIA

Internet access in India has doubled every year over the last five years. According to emarketer report on India online, in 2007, about 33.2 million people in India accessed internet and that s about 2.9% of Indian population. This figure is going to be 71.6 million people, which will be about 6% of population by 2011. The insurance portals that are active in online distribution are www.icicilombard.com, www.bajajallianz.co.in, www.insurancemall.in, www.bimaonline.com, www.insurancepandit.com.

 The insurance portals that are active in online distribution are :www.icicilombard.com, www.bajajallianz.co.in, www.insurancemall.in, www.bimaonline.com, www.insurancepandit.com. The policy details are stored digitally and all transactions are made over secure channels. E-insurance offers a new gateway of incomes and provides additional market penetration.

TREND IN 2011

Life Insurance
The changes in ULIP structure will make it more popular in 2011. The term insurance may get cheaper as the premium is inversely proportional to the life expectancy. Your approach: ULIP has become more attractive and hence it will be a good idea to take ULIP for long term. You should take insurance from a stable insurance provider as this sector will see stupendous growth and new players entering the market.

Medical Insurance:
Because of rising medical costs and claims, the costs of insurance will go up. There will be huge competition in health insurance area because of new players, both domestic and overseas. There may be few insurance companies offering health insurance at cheaper rates but that will only be to attract customers. There has also been discussion to introduce new health insurance products for luxury treatment aimed at high income group.

Your Approach
Take health insurance because of coverage and not because of the low insurance premium. These low premiums will not sustain in long run and the insurance company will increase the premium in 1-2 years. Dependence on employer insurance may not be a good idea. You should check the insurance coverage provided by employer and decide accordingly.

HOME INSURANCE
This hasn't yet penetrated the Indian market. However, banks are slowly realizing the importance of home insurance. Banks have planned to make home insurance compulsory before they approve the home loan. We will see tremendous change in home insurance plans. You Approach: It is a good idea to insure your home but see the details and clauses of insurance. Take it only if you think it really insures your home against any eventuality.

AUTO INSURANCE:
Auto insurance will see more players into picture. There will be demand for comprehensive insurance package because of increased number of vehicles on the road. Your Approach: You should focus on getting a comprehensive auto insurance package. If you are a careful driver, you may increase the deductible to lower the premium.

OTHER TRENDS
We can expect few insurance companies to go IPO in 2011. IPO will make insurance providers more transparent in their numbers and will help the customers in selecting insurance providers. The insurance industry will also see increased interest in India by insurance providers around the world. We should expect customized insurance for specific needs of people.