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7/27/2019 Emerging Trends in Banking Industry
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BANKING TODAY-
REDEFINED AND
RE-ENGINEERED
INDIAN BANKING -
THE CHANGING LANDSCAPE
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AGENDA FOR THE SESSION
o To Sensitize the Participants to the Latest Changesin Banking Industry
o What is the Response to the Current Trends fromBankers and Customers?
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INDUSTRY PROFILE
Public Sector banks
Private Indian Banks New Generation Banks
Private Foreign Banks
Cooperative Banks
Non Banking Financial Institutions
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Banking Sector Reforms
Post-Liberalization
1st Narasimham Committee Report on
Financial Sector Reform 1991
Introduction of Capital Adequacy Norms and
Prudential Norms - 1992
Deregulation of Interest Rates, Prudential
Norms for Maximum NPA 1993
Introduction of Banking Ombudsman Scheme 1994
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Banking Sector Reforms
Post-Liberalization
Concept of Local Area Banks
Introduced 1995
1st
Shared Payment Network System &conditional autonomy to PSUs 1996
2nd Narasimham Committee Report of
Banking Sector Reforms 1997Guidelines on Risk Management 1998
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RECENT TRENDS IN BANKS Entry of New Generation Banks Change in the Process, Methods & Techniques
New Products and Services
Collaboration between Banking & InsuranceCompanies.
Improvement in Service Quality
Increasing focus on Retail Banking Shift Towards Branchless Banking
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CHANGING PERCEPTION OF
CUSTOMER
Servicing the Customer1950s to 1960s
Satisfying the Customer - 1960s to 1980s
Pleasing the Customer - 1980s to 1990s
Delighting the Customer -1990-2000
Retaining the Customer 2000 and beyond
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WHAT CHANGES ?
Electronic Fund Transfer (EFT)
Electronic Clearing System (ECS)
Automated Teller Machines (ATM)
Shared Payment Network System (SPNS) Credit Cards/ Debit Cards
Point of Sale Terminal
Tele-banking
Mobile Banking Net Banking
Electronic Data Interchange
Corporate Banking Terminals
http://localhost/var/www/apps/mari/BANK-PPT/eft.ppthttp://localhost/var/www/apps/mari/BANK-PPT/eft.ppt7/27/2019 Emerging Trends in Banking Industry
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WHERE ARE WE GOING?
Anywhere Anytime Anyplace Banking
Timeless and Placeless Banking
Banking at Convenience
Good by to Traditional Instruments (Cheques&DD) & Invitation to new Instruments
Disappearance of Conventional Risk andArrival of New Risks
Leading to currency-less monetary system
Dismantling of Physical Structure
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WHAT IS THE TRIGGER?
Hyper Competition Shrinking Margins
Need to Reduce Cost
Take Advantage of Technology Changing Customer Expectations
Simplify the Procedure and Process
Reduce Traditional Risk
Offer Better / Improved Service
Some Constraints[Policy/Resources/Physical/Structure]
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Author for ChangePlayers in the Banking Business
Eco-System
Shareholders
Management
Depositors
Borrowers
Employees
Government
Regulatory Authorities RBI
Competitors
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PHASE OF TECH BANKING
PSB
PIB PFB
CB
NBFI
SBI, SBT ETC.
ICICI,IDBI,HDFC,UTI BANK ETC..
CITI BANK,SC BANK, ETC..
SCB,UCB,DCBs/SCBs
INDUSTRY
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SOME EARLY ADOPTERS
BANK____________
CHANNEL
HSBCBank
HDFCBank
UTIBank
CITIBANK
ICICIBank
ATM (No.) 250 500 550 174 1000
ATMShare(%)
40 50 NA 80 45
Other
Channel[%](mobile,phone, net)
35 15 NA 15 15
Branch
Banking[%]
25 35 NA 5 40
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STRATEGIES OF BANKS
Citibank: Parallel Banking
HSBC : Leveraging branches to grow C
ICICI B : Reducing importance of branch
HDFC B: Conservative migration
UTI B : ATMs as a force multiplier
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Issues and Challenges
What will happen to the traditional rural
credit institutions like, Cooperative
Banks, RRBs and Low performing
Public Sector Banks?
What are all the options for the Public
Sector Banks?
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Issues and Challenges
Can the machines establish a strong
connecting link with customers?
Is the Convenience Banking good for all
segment and all seasons?
Is it not challenges the conventional wisdoms(keeping close contact with the customers)?
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Issues and Challenges
Does IT confer Competitive advantage or is it
just the cost of staying in business?
How do we dispose the existing human
resource?
What are the new security issues?
Is this changes a customer demanded/bank
wanted? Are the customers happy andcomfortable with the shift?
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Electronic Fund Transfer
Transfer of funds between banks
located in different cities in place of
DD/MT/Telegraphic transfer.
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Electronic Clearing System
Facilitates inter-bank settlements -both Debit & Credit clearancesthrough INFINET.
CC: Companies who have to make bulkpayments to a large number of beneficiariesprepare the credit instructions on themagnetic media and submit the same to RBIfor payment.
DC: Payment to utility companies by banks
on behalf of the customers.
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Tele-banking
Using automatic voice recorder it
facilitates both cash & non-cash
transactions for the bank andcustomers.
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Automated Teller Machines
Device used for withdrawalof money, depositing ofmoney and balance enquiryand verification for 24hours of a day.
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Shared Payment NetworkSystem
Facilitates Use of ATMcards across participatingbanks at ATM centers usingMaster/Visa Cards. In caseof using other banks ATM one may have to pay servicecharges.
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Credit Cards/ Debit Cards
CREDIT CARD: It is a card that empowers the
Customer to spend up to the fixed value of
money limit fixed - A prepaid card.
DEBIT CARD: It is a post paid card and
money is transferred after the spending.
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Corporate Banking Terminals
Facilitates the Corporatecustomers to log on into the banksdata base and have access to theiraccount for balance verificationetc. with defined powers.
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Point of Sale Terminal
Computer terminal that is linkedonline to computerised customerinformation files that facilitatespurchase from retail shops as itcredits the retailer account online.
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Electronic Data Interchange
Transmit financialinformation and payments in
electronic form.- reducestransmitting cost and risk.
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THANK YOU