Monday, July 1, 2002		Feature

by S.C. Dhall & Sachin
AS competition in the financial services market grows, banks are facing an increasing need to distinguish their remote banking services from their competitors. In tandem with the growth in competition, emerging front end technologies are increasing the number of delivery channels which customers may use to connect to the bank.

Rapid growth in the number of Internet connections and users has opened up a large market of cyber consumers. as more and more useful services are being offered over the Internet business and home users, Internet use looks set to rise in popularity to compete with other forms of communication such as telephone and television. an Internet-based future is fast becoming a reality.

Internet banking is experiencing rapid growth, initially seen as an efficient way to market bank services, recent developments have enabled bank to provide extended home? Retail and corporate interfaces over the Internet to their customers. Internet banking offers substantial cost savings over other methods of banking and allows for the delivery of banking services through a range of distribution channels. Vendors are able to provide wide ranging support to banks wishing to formulate and implement an efficient/effective Internet banking solution.

Increasing competition in the financial services sector has led banks to extend the range of electronic services they offer customers. Evolutions in technology have also given customers more flexible access to bank services — existing mechanisms such as PCs, telephones and ATMs are being supplemented by emerging front ends such as smart phones, mobile phones, interactive TV and personal digital assistants.

Once RBI starts off its inspection audits, customers’ faith in Net banking will increase. Indian banks only offer a limited Net banking so that they can keep adequate control on the system. But the scene is bound to change and the entire range of banking will soon be offered on the net.

On low transactions volumes in India, there are not many Net users in India. Also persons are not comfortable on purchasing through the Net without actually touching and feeling the product. In the West, consumers who were earlier part of the mail order business have now moved to Internet. In India, however, the concept of mail order business is not very popular and therefore it is more difficult to change the customers from actual shopping to the internet experience.

Internet banking is becoming a strategic necessity for the banks. Even as the old brick and mortar models collapse into smaller kiosks or retail outlets, the internet has destroyed all geographical advantages enjoyed by them. This call for a newer, less expensive and more customer friendly technologies. And Net is being seen as the ultimate answer to survival in the new world order. The statistics reveals it all. Rough estimates that assume teller at Re 1 per transaction, put ATM transaction cost at 45p, phone banking at 35p, debit cards at 20p and the Internet banking a measly 10p.