changing dynamics
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Module-5S-7 B-Tech IT (2014)
Changing Dynamics in the Banking Industry
Module-5: Syllabus
E-Banking : Changing Dynamics in the Banking Industry– Changing Consumer Needs, Cost Reduction, Demographic Trends
Regulatory Reform Technology Based Financial Services Products
– Home Banking using bank’s Proprietary Software– Banking via the PC using Dial-up Software – Banking via Online Services; – Banking vis the Web
Security First Network bank Management issues in online Banking
– Marketing, Pricing
Reference Books
Ravi Kalakota, Andrew B Whinston, “Electronic Commerce: A Manager’s Guide”, Pearson Education, 2009
Dr. Tushar Kanti, Manish Kumar, Shilpi Gupta,” E-Commerce”, Savera Publishing House, New Delhi
Indian Institute of banking & Finance, ”General Bank Management”, Macmillan India Ltd, 2008
Vikas Taneja, Sakshi Parashar,”E-Banking and E-Commerce “ , alfa Publications, New Delhi, 2011
Changing Dynamics in the Banking Industry
1. Changing Consumer Needs– Globalisation ,Privatisation, Liberalisation
2. Cost Reduction– Technological
3. Demographic Trends4. Banking Regulation
CHANGING PERCEPTION ABOUT CUSTOMER
Servicing the Customer – 1950’s to 1960’s Satisfying the Customer - 1960’s to 1980’s Pleasing the Customer - 1980’s to 1990’s Delighting the Customer -1990’-2000 Retaining the Customer – 2000 and beyond
Changing Consumer Needs
The 7 Ps of Marketing Forces of LPG Competition
Indian banks are facing substantial competitive pressures as banking landscape gets redefined
BANKS
Deregulation
Increasing financial disclosure requirements and credit rating requirements for banks
Basel-II requirements, income recognition and provisioning standards
Greater managerial autonomy to banks
Consolidation / Increasing M & A activity
Privatisation / corporatisation / IPO’s
Increasing availability of risk management products like derivatives Managing asset quality, NPA
Improving productivity
E-Business
Changing Dynamics in the Banking Industry
WHAT IS THE TRIGGER?
Hyper Competition Shrinking Margins Need to Reduce Cost Take Advantage of Technology Changing Customer Expectations Simplified the Procedure and Process Reduce Traditional Risk Offer Better / Improved Service Some Constraints [Policy/Resources/Physical/Structure]
How Banks get affected
The size of profit pools are getting smaller. Sluggish employment growth and stringent credit criteria
weakens the demand and success ratios for consumer and small business loans.
Recent regulatory reforms have increased the cost of compliance and operating costs for the entire banking industry. Regulations such as Basel III that require banks to hold more capital have added to the burden and it has become a pressing concern for many small and mid-tier banks, thrifts, and credit unions.
Improve operational efficiency
Minimise costs
Enable high-speed processing
Allow data capture and data mining
Banking sector early adopters of technology
Improve customer experience with enhanced internal efficiency
Changing Dynamics in the Banking Industry
Progress of computerization in PSB
Accenture(June 2011)
Technology impact on banking post 2000
Infrastructure
RTGS (2004)1
NEFT (2005)2
Interbank Mobile Payments System (2010) ATM installed base of over 100,000 (over 27%
compounded growth from 2006 to 2012) POS terminals over 700,000
1. Real time gross settlement system2. National electronic funds transfer
Optimization of branch networks using ATMs
Optimization of branch networks using ATMs
The relaxation of norms for using ‘other bank' ATMs by the Reserve Bank of India in 2009 seems to have encouraged banks to set up more ATMs across the country in order to garner fee-based income, acquire new customers as well as to service the existing ones
Optimization of branch networks using ATMs
Optimization of branch networks using ATMs
ICICI Bank
Internet
ATMs
Branches
Call centre
Share of transactions in
2012
35%
41%
12%
2%
The disruptive power of technology
Mobile 2%
POS 7%
Share of transactions in
2001
2%
3%
94%
1%
-
-
Technology is in a continuing state of flux
Higher capacity and processing capability Software to run the devices Ability to connect through broadband and wireless Mobility, new platforms and the ecosystems in
handheld devices
From mainframe to minicomputer to desktop PC
And now, mainframe in a pocket
New platforms such as for payments are now challenging the traditional bank channels
Changing Consumer Needs
Changing demographics; Changing work patterns; Increasing financial assets and liabilities of
households; Increasing awareness of value; and Willingness to adopt technology.
Changing Customer Needs Indian retail banking has been showing phenomenal
growth
In 2004-05, 42% of credit growth came from retail Over the last 5 years CAGR has been over 35% Retail credit level crossed Rs.189K Crore in 2004-05 Market has transformed into a ‘buyer’s market’ from a
‘seller’s market’ Comprises of multiple products, channels of
distribution and multiple customer groups
Customer Needs
Economy vs. Retail Banking Retail assets are just 22% of the total banking
assets of India
Contribution of retail loans to GDP:India 6% China 15 %, Thailand 24% Taiwan 52%
Indian population below 35 yrs of Age – 70 % Reach of Formal Banking Channels – 20-25% of
Indian population Source: Cygnus Industry Insight
Auto28%
Other personal Loans16%
Home49%
Consumer Durables
7%
Market Share: Retail Loan - 2005
Change in Consumer Needs
Customer Preferences for Multiple channels
The accelerated retail growth has been on a historically low base
Penetration continues to be significantly low compared to global bench marks
Share of retail credit expected to grow from 22% to 36%
Retail credit grow to Rs.575,000 crs by 2010 at an annual growth rate of 25%
Source: Cygnus industry insight
Future Of Retail BankingFuture Of Retail Banking
Future of Retail Banking Contd…. Dramatic changes expected in the credit
portfolio of Banks in the next 5 years
Housing will continue to be the biggest growth segment, followed by Auto loans
Banks need to expand and diversify by focussing on non urban segment as well as varied income and demographic groups
Rural areas offer tremendous potential too which needs to be exploited
Strategic prerequisites….
Performance oriented leadership
Sophisticated marketing and sales
Efficient distribution channels
Process efficiency and ease of scalability
Superior credit policy, procedures and skills Source: Mckinsey
Challenges Sustaining Customer loyalty
NPA reduction & Fraud prevention
Avoiding Debt Trap for customers
Bringing Rural masses into mainstream banking
Strategies for Future…
Reaching to masses : Need to customize Customer segmentation/differentiation Data mining/CRM based campaigns Products per customer/loyalty Promoting low risk retail lending products
Offer an array of products and financial advisory.
Strategies for Future… Contd.
Cost effective expansion Renewed emphasis on superior execution by
front-line employees Grow through Alliances:
Hospitality Education
Retailers Automobiles
Consumer Durables Housing/Construction
Customer segmentation
The bank that best addresses and anticipates
customers needs, delivers consistently higher
quality service and connects to the customer
via their channel of choice wins
Y.Y.Chin, OCBC Bank
Winning Strategy
IT solutions for Banks
Tata Consultancy Services (TCS) acquired Australian Financial Network Services (FNS), a core banking solutions vendor, for approximately $26m. TCS has bought the stakes owned by Macquarie Bank and other promoters in an all-cash deal(2005)
Finacle, the banking software solutions suite of Infosys Technologies
HCL’s partnership with leading Core Banking vendors like SAP, Oracle and Misys is leveraged to provide intricate product customization and multi-layered implementation initiatives across the world for leading banks.
Cost Reduction Post-technology adoption, only 10% of the
banking staff is involved in "back office" jobs and the remaining 90% of the banking staff are freed for performing "front office" jobs of customer acquisition, servicing and retention by ensuring customer loyalty. “– RBI Deputy Governor KC Chakrabarty
(07/09/2010)
As per Census 2011
India's population stands at 1.21 billion, slightly more than the forecast, although the population growth rate has declined from 1.97% per annum between 1991 and 2001 to 1.64% between 2001 and 2011.
India has a younger population in comparison to many other countries.
Labour force in India is expected to increase by 32% over the next 20 years while it will decline for developed nations and China
CHANGING CONSUMER DEMOGRAPHICS Growing disposable incomes
Youngest population in the world Increasing literacy levels Higher adaptability to technology Growing consumerism Fiscal incentives for home loans Changing mindsets-willingness to borrow or
lend Desire to improve lifestyles Banks vying for higher market share
http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2598
The next wave: being connected 2.25 bn (32%) of world population is online
today, and 1.10 bn users are on 3G Mobile internet is ramping up dramatically
– 57 mn 3G users in China, y-o-y growth of 115%– 39 mn 3G users in India, y-o-y growth of 840%
Mobile internet now makes up 50% of internet traffic in India
Out of 1.80 bn mobile users in China and India One billion will go online in two years
Source: KPCB
Connectivity in India ..
100 mn internet users, 800 mn mobile subscribers Broadband connectivity a catalyst Consumers are becoming part of the cloud
seamlessly without consciously realising it Device costs will continue to drop More and more capabilities would be available at
lower costs
.. would have a significant impact on banking
Third largest internet user base
Second largest mobile subscriber
base
India’s current positioningChina(USD)
2003 2005 2010 2012 (E)
GDP (bn) 1,641 2,257 5,930 7,992Per capita GDP
1,270 1,726 3,738 5,899
Population (bn)
1.29 1.31 1.34 1.35
(E) - estimateNote: GDP is on nominal basisSource:IMF
India(USD)
2003 2005 2010 2012 (E)
GDP (bn) 590 808 1,598 1,779Per capita GDP
549 729 1,342 1,455
Population (bn)
1.07 1.11 1.19 1.22 India in 2010 was at the juncture where China was in 2003
354445
6468
115117
146157
171174
249
HyderabadChennaiUkraine
BangaloreCzech
KolkataPortugal
DelhiThailandDenmarkMumbaiBelgium
Rapid urbanisation
Source: Mckinsey
GDP USD bn
India’s metros in 2030 will be as large as some
countries were in 2005
India’s large metros in 2030: by GDP
Assuming an annual GDP growth of 8.0% between 2009-2018 and 7.0% between 2018-2030
Over 700 mn people across 600,000 villages Rural growth supported by:
– Changing characteristic of rural economy with reduced dependency on agriculture
– Rising wealth creation with estimate of 40 mn middle & high income households by 2010
Resurgent rural India
31.838.351.4
24.1 25.8
20.0
37.5 42.428.6
0
20
40
60
80
100
1999-00 2004-05 2008-09
Services
Industry
Agriculture
Share in rural NDP(%)Agriculture Industry Services
Looking ahead: impact of per capita GDP growth
Per capita GDP < US$ 500
Per capita GDP at US$ 500 -1,500
Per capita GDP at US$ 1,500 -2,500
Demand for better living environment
• Limited aspirations
• Low affordability
• Increased affordability
• Aspirations of a better lifestyle
Per capita GDP at US$ 2,500-4,000
Accelerating consumption cycle
Early 2000
2002-2011
2012-2017
2018-2021
Technology for the masses
Only 10% have life insurance
< 1% have general insurance
Only 2% have a credit card
59% of India’s households avail of banking services
Only 13% have an ATM + Debit card
The challenge is in banking 700 million people in 600,000 villages in close to 600 districts
Channel innovationDriving scale and profitability
Opening and operating savings accounts Easy KYCSmart cards
POS machines
Low cost ATMs
Mobile phones
Low cost branch
Used by branchless banking channels
Resource efficient branches
To bridge distance and ease transactions
For all banking operations Steadily gaining traction
54
Smart cards have simplified data capture
Biometric Transaction Card
Biometric smart card for secure validation Overcome distance by setting up service
points close to customers Most effective for the poor and uneducated
Branch in a box POS based solution offering banking
transactions like balance enquiry, cash withdrawal, deposit
Cheque payment (with capability to display signatures for verification)
RTGS1/ NEFT2
Can support transactions like pass book printing, opening of fixed deposits and bill payment
Low bandwidth GPRS connectivity
1. Real time gross settlement system2. National electronic funds transfer
ATM The oldest of the alternative banking channels and
enjoys the highest level of acceptance among customers. – The number of ATMs in India has doubled in the past three
years. More than 100,000 ATMs, around 70 per cent of them in
urban locations(2011-12). Global research firm Celent expects the number of
ATMs to double by 2016, with more than 50 per cent being set up in small towns.
Month-wise total volume of NFS Transactions From Jan 2013
Month/Year
No. Of participants
No. Of ATM
balance enquiry
Cash withdrawal
Pin Change
Mini Statement
Total Volume
Jan-13 129 1,09,664 3,96,61,110 14,75,62,566 2,21,014 44,37,657 19,18,82,347
Feb-13 143 1,11,493 3,72,57,214 13,82,20,349 2,16,506 42,50,210 17,99,44,279
Mar-13 150 1,16,025 4,12,20,908 15,82,38,934 2,85,276 52,31,088 20,49,76,206
Apr-13 150 1,18,660 4,16,80,350 15,67,16,840 3,07,855 64,44,567 20,51,49,612
May-13 176 1,20,828 4,04,94,563 16,25,14,775 3,07,934 65,57,104 20,98,74,376
Jun-13 185 1,24,078 3,88,97,846 15,69,23,710 3,23,634 63,72,028 20,25,17,218
Jul-13 196 1,26,612 4,25,18,702 16,37,08,983 3,49,932 69,73,798 21,35,51,415
NEFT and RTGS transactions
The volume of online fund transfers through NEFT (National Electronic Funds Transfer, used for low value transactions) and RTGS (Real Time Gross Settlement, used for high-value transaction) grew by 71 per cent and 11.7 per cent, respectively– RBI: 2011-12
Unique identity number
Preliminary KYC and wider acceptance
Instant identity verification Basis for Know Your Customer Build credit history Improve service delivery to the poor Customer management to avoid issues of over-leveraging
Financial services for all
Direct payment of benefits such as NREGA, Social Security Pension schemes Subsidy transfer
Payment ecosystem
Credit
Cashless payments through mobile wallets
Account history from electronic transactions for data driven lending
Customer engagement
Customer acquisition and on-boarding
Branches
ATMs
Online channels
Products that address needs of diverse customer segments
Strong distribution backing products Development of new channels by leveraging
technology Consistency in experience across channels
Customer engagementServicing customers through the life cycle
Analytics
Consistency of customer experience across channels of distribution
Analytics to understand and address customer needs across diverse segments
Development of banking history for underbanked and unbanked customers for cost effective credit
Cross-industry competition caused by deregulation
Developmental Financial Institutions transforming to banks
Banks like SBI venturing to Long Term Project Financing
Growth in capital market causes disintermediation and companies raise funds from both domestic & abroad
Re-alignment of Development Finance Institutions
ICICI from DFI to BankIDBI to Bank retaining DFI status
Deregulation of interest ratesIncreasing disintermediationMounting NPAs in DFIs due to unfavourable Business Cycles, Politically motivated social banking schemes, unscrupulous creditors lagging/denying repayment of loans in the absence of strong laws like SARFEASI Act 2000
DFIs in India 1947 IFCI debated status from 2003 to 2006 and finally continuing as
DFI 1956 ICICI become Bank in 2002 1964 UTI become UTI MF 2003 1964 IDBI become bank in 2004 with DFI status EXIM bank – March 1982 IIFCL 2004 Specialised Financial Institutions
– IFCI Venture Capital Funds Ltd; ICICI Venture Funds Ltd; Tourism Finance Corporation of India Ltd
Sectoral DFIs also proliferated– RFC, PFC,
Globalisation
Globalization (or globalisation) describes an ongoing process by which regional economies, societies and cultures have become integrated through globe-spanning networks of exchange.
Economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology
Globalisation
Correspondent Banking Entry of foreign Banks; SBI and others opening foreign branchesIntegration of services with Internet BankingGrowth in foreign trade, Migration of worker class to Gulf, Europe and USALevel playing field expected by 2009, not materialised due to US Recession and bursting of several leading banks and FIs there during 2006-2008
Privatisation
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (government) to the private sector (business).
Privatisation
Listing of PSBs like SBI etc..Single holding in banks not >10%
Govt ownership in Indian banks reduces
In 2005 the government owned 100% shares only in four out of the 19 nationalised banks.
At present in all the nationalised banks, and IDBI Bank and State Bank of India i.e. PSBs, the government has less than 100% holding; in almost 14 of them the private shareholding exceeds 30%.
Entry Norms
Bank Nationalisation 1955(SBI), 1959(7 associates); 1969 (14 No.s);1980 (6 No.s)
Foreign ownership cannot exceed 20%, By law Govt holding not <51%
Stake sales in PSU banks Entry of private banks
– Indus Ind Bank 1994– HDFC Bank 1995– UTI Bank(Axis Bank)– Yes Bank
Privatisation
In the first wave of privatisation of the banking sector, 10 players were allowed in the mid-1990s and these included ICICI Bank, HDFC Bank and IDBI Bank, among others.
The last time new banks were allowed was in 2002-03 when two licences were issued. 2010 guidelines finalised in 2012 with Rs 500 cr capital
Branch expansion restriction on Foreign banks to be phased out; Subsidiary route
Entry Norms Feb 2013
Capital 5 billion Foreign shareholding max 74% Promoters holding 40% capital to be
reduced to 15% in due course 13% capital adequacy ratio
Liberalisation
Liberalization (or liberalisation) refers to a relaxation of previous government restrictions, usually in areas of social or economic policy.
Started with interest rate deregulation in early 90s
Liberalisation
Banks are given freedom to fix the price for their products
RBI fixes policy rates and Reserve requirements only
Banks can decide the limits for WC loan Norms for ATMs, Off-site ATMs, Branch
expansion Norms for NPAs recognition and management
RBIRBIINITIATIVESINITIATIVESIN PAYMENTIN PAYMENT
&&SETTLEMENTSETTLEMENT
SYSTEMSSYSTEMS Compliance with BIS Core Principles
Clearing Corporationof India
RTGS
CFMSPKI based Security
SFMS
INFINET
IDRBT
PDO-NDS & SSS
Institute for development and Research in Banking Technology (IDRBT), Hyderabad
The set up in the mid nineties, as a research and technology centre for the Banking sector;
Commencement of Certification Authority (CA) functions of the IDRBT for ensuring that electronic banking transactions get the requisite legal protection under the Information Technology Act, 2000
INFINET
The commissioning in 1999, of the Indian Financial Network as a Closed User Group based network for the exclusive use of the Banking sector with state-of-the-art safety and security. The network supports applications having features such as Public Key Infrastructure (PKI) which international networks such as S.W.I.F.T. are implemented
SWIFT
Society for Worldwide Inter-Bank Financial Telecommunication (SWIFT), Brussels is a co-operative society for interbank financial networking, is established in May 1973 with 239 participating banks from 15 countries
More than 9,000 banking organisations, securities institutions and corporate customers in 209 countries trust to exchange millions of standardised financial messages.
– Messages relating to financial transaction, debit-credit exchange, and foreign exchange.
– Make customers to automate and standardise financial transactions, thereby lowering costs, reducing operational risk and eliminating inefficiencies from their operations.
– Available 24 hours to participating member.
Other IT related initiatives
Ensuring Information Systems Audit (IS Audit) in the banks for which detailed guidelines relating to IS Audit were formulated and circulated;
Enabling IT based delivery channels which enhance customer service at banks, in areas such as cash delivery through shared Automated Teller Machines (ATMs), card based transaction settlements etc.;
Providing Guidelines for Internet Banking, which facilitated the banks to ensure that common minimum requirements relating to Internet Banking offerings were provided for;
Other IT related initiatives
Providing detailed specifications to banks on the configuration of systems relating to critical inter-bank payment system applications such as Real Time Gross Settlement (RTGS) System, Negotiated Dealing System (NDS), Centralised Funds Management System (CFMS) etc.;
Implementation of the National Financial Switch (NFS) to ensure interconnectivity of shared ATMs and to provide for funds settlement across various banks.
National payment corporation of India: www.npci.org.in
National financial switch – ATM switching Immediate payment system – mobile phone Automated clearing house - ECS Aadhar payment bridge system Interoperable financial inclusion system - BC Cheque truncation system Express cheque clearing system Aadhar enabled payment system RuPay
Indian Banks’ Technology Consortium
RBI Working Group on Information Security, Electronic Banking, Technology Risk Management and Tackling Cyber Fraud recommended formation of Technology Consortium under the aegis of IDRBT
Indian Banks’ Technology Consortium
Established by IDRBT to work with
Indian banks Academic institutions Industry bodies & Outstanding professionals
Indian Banks’ Technology Consortium Objectives
Impact Banking AdvancementDevelopment & Practical application of technology
Develop and update standards in the use of technology and information security in banks
Improve customer service and advocate regulation / legislation.
Pioneer New Technologies with PoC,
Focus on Collaborative Research in Technology Development &
Resolution of Shared Problems & Challenges in Banking Technology
Indian Banks’ Technology Consortium Charter
Indian Banks’ Technology Consortium Proposed Activities
Discuss and research technology issues
Work collaboratively
Solve shared problems and challenges
Pioneer new technologies that benefit banks
Collaborative research projects
Technology development pilots
Proof-of-concept tests
Indian Banks’ Technology Consortium
Advantages to members
Updating of current developments and trends
Promoting standards
Networking on shared technical challenges
Discussing the legal and regulatory dimension of complex technical issues facing the banking industry
Conducting studies affecting the industry as a whole
Address issues faced by banks collaboratively
Indian Banks’ Technology Consortium Organizational Structure
Executive Board Members
Director, IDRBT CEO / Chairman, IBA Chairman / Executive Directors / Managing Directors / Deputy
Managing Directors / Chief General Manager from Banks Government Representative Academician from top Technology / Management institutions NASSCOM representative Chief General Manager, DIT, RBI (Invitee)
Indian Banks’ Technology Consortium Organizational Structure
Advisory Council Members
Chief Operating Officer, IDRBTChief General Manager / General Manager from the
Banks presently working in the IT domainGeneral Manager, DIT, RBIGovernment RepresentativeAcademicians from top Technology / Management
institutions
I
Vendor Affiliates
Representatives from the Industry / Vendor affiliates will be nominated by the Executive Board for a project on a case to case basis.
Indian Banks’ Technology Consortium Organizational Structure
I
Indian Banks’ Technology Consortium Organizational Structure
Steering Committees Members
Chief Operating Officer, IDRBT Senior Executives from the Banks presently working in the
IT domain General Manager / Deputy General Manager, DIT / Payment
Systems, RBI Academicians from IITs / Universities / Research Institutes Faculty, IDRBT
Technology
Transaction based systems to Core Banking Solutions and then to Integrated Systems
Telephone & Fax to PC/Mobile with Internet connectivity
Clearing and settlement systems on INFINET and linking to SWIFT making througput processing
Relationship banking, Universal banking, and Unit banking gaining importance
Financial stability forum Report 2008
Issues in fraud monitoring Supervisory process On-site inspection Revised strategies of on-site supervision
– Frequency– Reporting and registration system for NBFCs
Off-site monitoring and surveillance system(OSMOS) Supervisory rating
– CAMELS / CACS since 1998-99 Preventive supervision-prompt corrective action
– Trigger points CRAR 9-6, 3-6 and below 3, net NPA 10-15% or above 15%, and ROA below 0.25%
Risk based supervision
Monetary and Credit Policy statement , April 2000– Formal risk assessment of a bank by producing a
detailed risk profile– Designing a customised supervisory action plan
based on risk profile for each bank– Delineating scope and extent of supervision to target
high risk areas and areas of supervisory concern– Issues related to HR and skill development
Bank’s Marketing Mix
Product, Price, Place, Promotion Success of Delivery channels
– Strong bank branding. – Unique value to customers. – Customer centric -- reflecting the customer
relationship. – Must be easy to use and intuitive to the customer. – Finally, and most important, it must be secure!
Changes in Bank’s Marketing Mix Core Banking and ATMs altered the branch’s layout,
the way of servicing customers Freeing of Interest Rates widened product portfolio Code ensured display of rates and better level of
banking services Internet enabled Universal banking from any where
any device at any time New segments like Film Financing got established VRS gave way to young technically oriented staff
Role of Information Technology (IT) and Customer Relationship Management (CRM) in Banking
The application of IT and e-banking is becoming the order of the day with the banking system heading towards virtual banking
STRATEGIES OF BANKS
Citibank : Parallel Banking HSBC Bank : Leveraging branches to grow C’ ICICI Bank: Reducing importance of branch HDFC Bank : Conservative migration AXIS Bank : ATM’s as a force multiplier
RECENT TRENDS IN BANKING
Entry of New Generation Banks New Products and Services Increasing Non- Interest and Fee Based
Income Collaboration between Banking & Insurance
Companies. Improvement in Service Quality Increasing focus on Retail Banking Shift Towards Branchless Banking Focus shifting to inclusive banking
RECENT TRENDS IN BANKING
Outsourcing of Resources [Human&Non-human]
Steady Reduction in Interest Rates Corporate governance and Business
Transformation Regulatory reforms Mergers, Acquisitions and
Consolidations
Industry’s response to the change
“Any where”, “Any time” Banking Improved processes/Bundled product offerings
Faster service/Reduced TATs Customer specific products/offerings on a regular
basis ‘Bank’ customer has replaced ‘Branch’ customer Focus on understanding customer needs/
preferences Segmentation/Differentiation of customers Customer driven strategies Building relationships
IT Expenditure pattern
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