E-Banking

AgendaTechnology Commencement in BankingProduct Based BankingCustomer Based BankingData WarehouseCRMAlternative Delivery ChannelsBanks Position in the New Economy

Technology Commencement in Banking In 70s, banks started to establish centralized data processing centers.Essentially the roles of these data processing centers are:collect the handwritten documents from branches compile the documentsmanual data entry by the operatorsgenerate reports for the bank staff and the central bankexecute some banking transactions

Branch AutomationIn 80s, banks started technology investments for the branches.The first step is offline branches.Terminals connected to local branch computer Second step is online branches connected centrally. Most of the transactions started to be performed in the central mainframe.

Product Based BankingIn the mid-1980s, banks accepted product based banking and competed with their products.Banks developed new products for their customers.Credit cardCredit deposit account (Super Account)Debit cardsBeside branch, banks brought new channels to give better service to their customers.ATMPOSIVR

Plastic CardsThe plastic card usage grown enormously in last 2 decade.Plastic card became the main media for bank customers.Number of credit card in Turkey:

data collected from BKM

Sheet: Sheet1

Sheet: Sheet2

Sheet: Sheet3

Credit Card Type

National Cards

International Cards

Total

Visa

8244538.0

MasterCard

5309846.0

Other

50483.0

total

1.3604867E7

Credit Card Type

National Cards

International Cards

Total

Visa

8244538.0

MasterCard

5309846.0

Other

50483.0

total

1.3604867E7

Plastic CardsNumber of debit card in Turkey:

data collected from BKM

Sheet: Sheet1

Sheet: Sheet2

Sheet: Sheet3

Credit Card Type

National Cards

International Cards

Total

Visa

8244538.0

MasterCard

5309846.0

Other

50483.0

total

1.3604867E7

Credit Card Type

National Cards

International Cards

Total

Visa

8244538.0

MasterCard

5309846.0

Other

50483.0

total

1.3604867E7

Debit Card Type

Debit card

Electron (Visa)

6230782.0

Plus (Visa)

68304.0

Electron ve Plus (Visa)

2881126.0

Cirrus ve Maestro (MasterCard)

1.4225245E7

Private Label card

6893479.0

Total

3.0298936E7

Trkiye'de Mart 2001 sonu itibar ile;

Otomatik Vezne Makinas (ATM) says:

12.174 Adet

Sat Noktas Terminali (POS) says :

313.140 Adet

ATMIn the mid-1980s, that cash dispensers truly became a worldwide phenomenon. It took 16 years for the first 100,000 cash dispensers to be installed, but only four years more for the next 100,000.Now,ATM became the electronic face of banking for most customers.Beside cash withdrawal, there exist various transaction options from transfer to fund buying/selling.Now there are 12.174 ATM installed in Turkey (Ref: BKM)

Point Of SaleNew habits in shoppingIncreased the use of plastic cardsNow there are 313.140 POS installed in Turkey (Ref: BKM)

ATM and POS Application ArchitectureCredit Card AuthorizationDebit Card AuthorizationSwitch System

IVRInteractive Voice Response (IVR) is a software application that accepts a combination of voice telephone input and touch-tone keypad selection and provides appropriate responses in the form of voiceIVR has come into our life at the beginnings of 90s.First step in Telephone BankingPeak transaction volume in salary payment days for balance inquiryIntegrated with ATM system

Customer Based Banking Customer introduction on different systems Difficulty in creating new products Different user interfaces for different environments Product based Customer - Bank relation

One customer informationfile

Product factory

Standard graphical user interface

Consolidated customer data

Product BasedCustomer Based

Banking Application Architecture

Data WarehouseElectronic repositories of summarized historical dataThe main idea behind data warehouse is get all company data working together so users can see more,learn more, and make the organization work betterData Warehouse helps users to identify trends, find answers to business questions and derive meaning from historical and operational data.Data access is easier and less costlyDecision support solutions run faster and are more accurate.

Data Warehouse ProcessDesignTransformExtractDeliverTransaction Data ExtractionData Scrubbing and CleansingLoad, index and AggregatePublish and SubscribeData MappingData ReplicationData Histories and SummariesData Access ToolsIntegrated Data Warehouse InfrastructurePartial SolutionsLife CycleComplete Integrated Solution

CRMCRM is an integrated sales, marketing and service strategyCRM goals are :Use existing relationships to grow revenueUse integrated information for excellent serviceIntroduce more repeatable sales processes and proceduresCreate new value and loyaltyImplement a more proactive solution strategy

The Three Phases of CRM

Acquire New CustomerRetain Profitable CustomerEnhance The Profitability of Existing Customer

AdaptibilityListeningNew productsDifferentiationInnovationConvenienceBundlingReduce CostCustomer service

Integrated CRM ApplicationsSales Force AutomationIntegrated CRM ApplicationsPartial Functional SolutionsLife CycleComplete Integrated SolutionAcquireEnhanceRetainDirect MarketingCross Sell and Up SellProactive ServiceCustomer Support

Alternative Delivery ChannelsAnytime, anywhere bankingTelephone BankingInternet BankingMobile BankingTelevision bankingNext ???

Telephone Banking7x24 banking through the phoneMain componentsSwitchIVRCTI(Computer Telephony Integration)Manage each call using the computerPop up the user information while transferring the callAgent Desktop ApplicationWin32,ActiveX, HTMLHost Application

Telephone Banking Infrastructure

TelecomIVRCTIHOST

Internet BankingSample Internet Banking Architecture More and more banks are coming to realize that internet is a part of banks' alternative delivery channel strategies activities concentrated in the business-to-consumer segment, focused on retaining clients In Internet banking, security is a primary concern. Security concerns have been addressed from every angle within the architecture of the Internet banking application.

Mobile BankingCurrent Mobile Banking Applications:SMS BankingWAP BankingSTK (Sim Toolkit) Banking

SMS BankingBasic banking inquiry transactions(balance inquiry, funds, exchange rate inquiry) are performed by the cooperation of bank and the GSM operatorSecurity is the main problemBank SMS GatewayBank SMS DBLeased lineGSM Operator Application ServerGSM Operator SMS DBGSM NetworkBank Host

WAP BankingWireless application protocol (WAP) is an application environment and set of communication protocols for wireless devices designed to enable manufacturer-, vendor-, and technology-independent access to the Internet and advanced telephony services. WAP is a global standard and is not controlled by any single companyVarious banking transactions offered in WAP environment by banks.Similar architecture with SMS banking

SIM ToolkitSIM card enables to keep and load different applications.SIM Application Toolkit has been agreed as a GSM standardSIM Application Toolkit is independent of phone manufacturers and designs. SIM Application Toolkit allows the flexibility to update the SIM to alter the services and download new services over the airSIM Application Toolkit is designed as a client-server application. On the server side, SimCard platform and the client side, phone that supports the SIM Application Toolkit In the near future, banks will start to offer banking transactions in this platform.

Television BankingDigital television (DTV) is the transmission of television signals using digital rather than conventional analog methods. Advantages of DTV over analog TV include: Superior image resolution (detail) for a given bandwidth Smaller bandwidth for a given image resolution Compatibility with computers and the Internet Interactivity Superior audio quality Consistency of reception over varying distances Banks offer their banking transaction in this new environmentT-commerce in the near future.

What is the Next channelMicrowave Banking???

Channel Costs

Channel Integration EvolutionChannel Integration evolutionReuseEfficiencies of ScaleReduction of Redundancies

The Role of Banks in the New EconomyInternet and mobile devices have brought new rules to economy and shaped the way to do businessBanks has also evolved according to the new economy and took their places in this new world to add value to their customerThe new ways to do business are :e-commerce (B2C)m-commerceB2B

E-commerce - B2CE-commerce is the buying and selling of goods and services on the Internet.Main feature of e-commerce24-hour availability a global reach the ability to interact provide custom information and orderingand multimedia prospects, The Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. Banks provide secure payments infrastructure - virtual POS

M-commerceMobile commerce applications involve using a mobile phone to carry out financial transactions- this usually means making a payment for goods or transferring funds electronically. As content delivery over wireless devices becomes faster, more secure, and scalable, there is wide speculation that m-commerce will surpass wireline e-commerce as the method of choice for digital commerce transactions.

B2BA housands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information. In the B2B, the bank role is to provide a reliable payment infrastructure that add value to corporate businessThis infrastructure should cover:Bill presentmentBill paymentDifferent payment types(credit card, deposit account, loan)Information after payment

E-SecurityTo improve the e-business, all the users should feel secure to perform the transaction this environmentThe main concepts in e-security are:PKI (public key infrastructure) enables users of a basically unsecure public network such as the Internet to securely and privately exchange data and money through the use of a public and a private cryptographic key pair that is obtained and shared through a trusted authority. Public key is a value provided by some designated authority as a key that, combined with a private key derived from the public key, can be used to effectively encryption messages and digital signature.Private or secret key is an encryption/decryption key known only to the party or parties that exchange secret messages. Public key is used together with a private key

E-Security - continuedDigital certificate is an electronic "credit card" that establishes your credentials when doing business or other transactions on the Web. It is issued by a certification authority (CA). CA (certificate authority) is an authority in a network that issues and manages security credentials and public key for message encryption. As part of a public key infrastructure, a CA checks with a registration authority to verify information provided by the requestor of a digital certificateAn RA (registration authority) is an authority in a network that verifies user requests for a digital certificate and tells the certificate authority to issue it.

Smart CardsAbout the size of a credit card, a smart card is a plastic card with an embedded microchip that can be loaded with data, used for telephone calling, electronic cash payments, and other applications, and then periodically "recharged" for additional use. smart card contains more information than a magnetic stripe card and it can be programmed for different applications. Some cards can contain programming and data to support multiple applications and some can be updated to add new applications after they are issuedBenefit of smart cards:enhanced securityoff line transactionprogrammable cardloyaltycustomer information

Related Linkswww.ykb.comwww.teleweb.com.trwww.bkm.com.trwww.visa.comwww.europay.comwww.banktech.comwww.bai.orgwww.mobilesimtoolkit.comwww.itworld.com