Technological Challenges in Banking Operationsbird-cpec.in/wp-content/uploads/2018/02/2-Best... ·...
Transcript of Technological Challenges in Banking Operationsbird-cpec.in/wp-content/uploads/2018/02/2-Best... ·...
A co-operative bank is a financial entity whichbelongs to its members, who are at the same timethe owners and the customers of their bank. Co-operative banks are often created by personsbelonging to the same local or professionalcommunity or sharing a common interest.
65% to 70% of India resides in Rural areas.Cooperative Banks have maximum reach of thispopulation. Cooperative banks are best suited toleverage IT and give best benefits to the society.
Why do we need to talk of leveraging technology & Digitization??
--Increased competition &Hence Customer retention /acquisition
--Increasing Customer convenience & offering the best
--Increasing Operational efficiency & productivity
--Cost optimization & reduction
--Increasing security for banking transactions
--Leveraging IT will also help in corporate governance due to moretransparency
Need to move from currency based to Non Currency based transactionsbecause--
1. Cost of operation for currency is high. Cost of printing, logisticalchallenges in printing/minting, corruption issues, fake notes, etc.
2. Cost estimates for maintaining currency based operations is aprox 2%of GDP .With e-payments we can save at least 1% OF GDP.
• Social Responsibility
Benefits to the lower strata of the society Benefits to the remote corners of the country
• Responsibility to the Country’s Economy & Organization (Bank)
Services at affordable costs to customers Improve governance, bottom-line and stakeholder rewards, Improved
customer service & Operational Efficiency Retain customer relationships based on the strength of customer
service capability Use business intelligence tools to analyze customer needs and create
new product offerings
RTGS/NEFT Services
CTS
ATMs & Micro ATMs
Credit/Debit Cards and POS machines
Internet Banking
Mobile Banking
SMS Banking
IMPS
E-commerce
UPI/BHIM
Video Banking
IT for Inclusive Business Growth
IT enables banks to manage Treasury and floats well,
Managing Investments ,offer allied products such as
Insurance and Investment products which was earlier
difficult due to complexity of managing large productportfolio. Hence Maximizing profits from other business.
IT for Financial Inclusion
Deployment of Micro ATMs and other channels and
enrollment of BCs , & credit linkage of SHGs. 2.3
million SHGs A/cs are already credit linked.
Other than these ,banks are also deploying other models
like mobile vans, kiosks etc.
IT for increasing financial literacy
IT for customer convenience-
Direct Benefit Transfer (APBS )
Maximizing Customer satisfaction: Banking beyond physicalbranches. Any Where, Anytime Banking’ through new, 24/7/365delivery channels- ATMs, Cash Recyclers, Net & Mobile banking
Use of Loan Processing Software for faster approvals
IT for Minimizing Risks
Leverage technology for risk management: Through tracking ofNPA accts and follow up actions as required.
Use of i-Kissan portal -Prevention of Frauds by online view ofKYC, Land Records etc, banks can prevent/minimizemalpractices and frauds that can happen in advances (Loans)
Use of Risk rating tools like DeDupe.
Use of CIBIL and other rating agencies, and accessing defaulterlist.
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IT for increasing efficiency in Business & Operations
Model-Payment and settlement systems and computerization of the governmentsecurities, money market and foreign exchange operations in the banking sector as awhole
Reducing operation costs, & also increasing efficiency
Product Management: With the use of technology bank can analyze their Customerneeds and match with their Product portfolio and offer best products to match theirneeds. Product diversity is the key tool to reach all segment of the borrowers.
IT as a tool for Preparation of MIS & Data Management
Technology is a boom for generation of MIS and data management as it requiresminimum time and also reduces the chances of human errors
IT for Improving HR ,Administration & Training functions
It can be a great enabler for improving various important functions likeRecruitment, Performance monitoring & appraisals, and Training in banks.
GST is complex for administration purposes and usage of IT based solutions willgo a long way in helping the organizations.
It's not E- retailers alone. Bankers are also celebrating initiatives like'Big Billion Day Sales' every festive season. For, online shopping ofphysical goods in India was aprox $16.07 billion in 2016, andexpected to grow to $52.3 billion by 2022 .
The country's internet population, 213 million as on 2013, is seeing anaddition of five million every month, driven by the rapid growth insmart phones. Most banks are cashing in on this opportunity, as ithelps them earn revenues and in lowering costs.
Every time a card is used online, the issuing bank earns, on anaverage, 1-1.5 per cent of the amount spent. The earnings can behigher, depending on the amount spent and type of card used.
Online transactions also result in cost savings for lenders. Forinstance, instead of using the ATM, if a customer performs an onlinetransaction through his mobile phone or computer, the transactioncost for the bank is nearly halved. The same transaction would costthe bank 10 times more if the customer visits the branch to withdrawcash.
Ever rising customer expectations.
Security and integrity of data-base – Risk management.
Disparate Systems.
Customer retention and life cycle management.
Diseconomies of Scale.
Employee Training & Retention.
Colossal costs – Technology is a monster – Guzzler of Money.
Issues of branch structure, lay out and redeployment of staff.
Redefining of work-flows – front office, back office jobs…
Change in employee role profile and management/supervisory practices.
Today Technology and Banking cannot be separated, but it requires a lot ofCAPEX and OPEX apart from Technical competent man power. The smallerbanks cannot afford the cost of going beyond CBS Implementation, andproviding other needed Value added Services like the RTGS/NEFT, CTS, DBT,NACH services, etc due to the high costs involved, and hence the customersof these banks would not be able to enjoy these latest banking services.
In order to strengthen the co-operative sector and help all co-operativebanks,& To mitigate these Challenges, so that even smaller banks can offerthe latest banking services to their customers at an affordable cost GSC bankCONCEPTULIZED a “Technology Umbrella” for the first time in the country. Asof today, this is a unique successful implementation in the whole countrywhich is a shining example for the co-operative sector as a whole.
Service LIVE BanksRTGS/NEFT 89
CSGL 54
CTS 85
Insurance 44
ATM 16
APBS 28
IMPS 5
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GSC Bank’s Technology Umbrella
Opened more than 1,05,000 Saving Bank Accountsduring last one year including all milk producers
Issued Rupay Debit Cards to all milk producers
Installed 170 Micro ATMs at PACS Level/Milkcollection centers
All milk payments are credited in milk producersSaving Bank Account
Milk Producers withdraws their money as and whenrequired.
As a result CASA Deposits increased in bank by 7%
October 2016 October 2017
Total Deposit (in Crore)
1524.10 1713.21
CASA Deposit (in Crore)
623.35 802.82
CASA Deposit (in %) 40.89% 46.86%
Total Deposit (Other) 900.75 910.39
• GSC bank organized Behavioural Skill Test of 4441 employees for all DCCBs inGujarat. Tests were carried out Grade wise through a 3rd party , WEB Basedapplication .
• Each test or profile question was developed by industrial psychologist whostudy the competencies that make an employee successful in a specific role.
Skills and traits assessed
work values
18 Personality attributes,
8 Interest areas and
Managerial skill test profiling
◦ Technical
◦ Conceptual
◦ Personal
◦Individual Reports were made after Analysis based on HOWARDGARDNER THEORY & DATA ANALYSIS OF THE RESPONSES .Co-relationof so many parameters for an individual and then analysing to deriveconclusions was possible only by using IT Analysis Tools which otherwise would not have been possible .
Report generated for each individual showing--
Strengths
Immediate training needs
Possible training needs
Counselling Sessions were done by an expert HR person foreach individuals
This has resulted in HIGH MORALE OF ALL EMPLOYEES &HIGHER PRODUCTIVITY
AN EXAMPLE OF REDEFINING WORK FLOWS
& INCREASING PRODUCTIVITY
CENTRAL PROCESSING CENTER(CPC)
It is a Centralized Processing Center for the purpose of New accountopening and C-KYC Function .A processing center has been establishedat the HO with four persons, with its connectivity to all branches .All thebranches send all new account opening forms along with scan copies ofthe KYC documents of the individual and then CPC processes theapplication .
1)Check the complete form and documents.2) Verify the KYC documents form the competent authorities3)Create new CIF , and also generate Customer Account number in CBS4) Link the CIF & Acct number in CBS5) Upload KYC details in the CKYC Portal of CERSAI & Obtain CKYC Number6) Communicate all details to Branch /customer7)Despatch Welcome Kit along with Chequebook to the Customer’sAddress
GSC BANK & ADC Bank have adopted the above practice
An Example of Leveraging IT – MIS for Product planning
CategoryNo of CA #
Aggregate Value % No % Value
0-500 320 46,987 15% 0%
501-1000 170 134,206 8% 0%
1001-5000 516 1,499,682 24% 1%
5001-10000 319 2,176,097 15% 2%
10001-25000 257 4,042,770 12% 3%
25001-50000 163 5,880,414 8% 5%
50001-100000 152 10,517,823 7% 8%
>100000 253 104,847,180 12% 81%
Total 2150 129,145,159 100% 100%
Average Balance 60,068 Clients to be
focused
Outcome of the review of average balances in Current Accounts
Outcome Introduction of “ Preferred “ Category for clients maintaining > 50K in Current Accts.
Purpose 1. To offer preferred banking facility for HNW clients2. To introduce / promote & increase client engagement 3. To offer market sync product and promote/create “ Brand “
Salient Features of new category – Preferred Current Account
1. Free RTGS/NEFT 2. Free Cheque Book3. Nil return charges for outward cheque4. Free mobile banking,5. Free Internet banking 6. Free SMS for all the transactions & 7. Free email statement available. 8. No MICR/CTS charges 9. Free Platinum Debit Card (*)
Concessional / other VAS (Value-added Services )
1. 25% concession in processing charges relating to retail / business loans and advances availed by account holder.
2. Personalised cheque book will be issued and on the left hand side of the cheque, the words ‘Preferred’ will be printed.
Advantages 1. Bank can offer personalized services to High Networth Clients, thereby increasing engagement with clients, resulting to increase in CA business-Number/Value
2. Getting references for untapped business through HNI clients3. Leveraging entire product mix, to such clients at compelling rates ; so
as to ensure stickiness / loyalty of such influential and profitable clients
Keeping in view of the alarming increase in the cyber-attacks on the Indianfinancial sector and to mitigate the consequences of Cyber-attacks, GSC Bankfurther improved its existing practices to assess its own readiness and put inplace a dedicated team for cyber security.
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Chief Information Security
Officer (CISO/CIO)
Security Management &
Awareness Team
Security Implementation
Team
Security Monitoring &
Incident Management team
Effective Cyber Security Baseline
Key points that we have kept in mind for effective baseline:
1. Inventory Management of Business IT Assets.
2. Preventing execution of unauthorized software
3. Network Management and Security
4. Patch/Vulnerability & Change Management
5. User Access Control / Management
6. Secure Mail and Messaging Systems.
7. Vendor Risk Management
8. Removable Media
9. User / Employee / Management Awareness
10.Customer Education and Awareness
•Installed 150 KWp Solar Plant with net metering & Grid feed for any extra generation
•Saves Rupees Forty lakhs /annum.
•2 Years Completed
Technology needs to be embedded in the bank’s strategy & has to be integral part of strategic plans
Five Digital forces - Mobility, Cloud ,Social, Analytics& Big data are maturing & organizations must make full use of these by integrating these in transforming the business. This can only be possible by being open & agile.
Organizations need not be hier archival in an age where real time data is available .We need to create Idea sharing networks/organizations and push the Right data Below…
Conclusion