Branchless Banking:Branchless banking is the concept of providing banking services to customer without entering or using conventional bank branch

system with the help of remote channels, information technology and latest communication technologies. In simple words it means to provide financial services to customer without relying on branches. With the rapid growth in communicational and information technologies, they are becoming key enabler and differentiator in the success of providing seamless and timely financial services to customers. IT system not only provide efficient working but also ensure uninterrupted services, ease in developing new products and consumer data protection and verification. According to Consultative Group to Assist the Poor (CGAP) branchless banking comprises essentially of following main elements: Use of technology, such as payment cards or mobile phones, to identify customers and record transactions electronically and, in some cases, to allow customers to initiate transactions remotely Use of (exclusive or nonexclusive) third-party outlets, such as post offices and small retailers, that act as agents for financial services providers and that enable customers to perform functions that require their physical presence, such as cash handling and customer due diligence for account opening Offer of at least basic cash deposit and withdrawal in addition to transactional or payment services Backing of a government-recognized, deposit-taking institution, such as a formally licensed bank Structuring of the above so that customers can use these banking services on a regular basis (available during normal business hours) and without needing to go to bank branches at all, if thats what they choose

Example of Branchless banking: Automated Teller Machines (ATMs). Point of sale devices (POS). Debit/Credit cards.

Mobile Phones. Internet.

Branchless banking was first launched in United Kingdom in 1989 by Midland bank which is now part of HSBC. The accounts were operated via internet, post or telephone without having any branches (HSBC branches can be used to make deposits). Mobile phone Branchless banking is successfully functioning in Kenya with more than 7 million customers, South Africa, Philippines and Indonesia. According to an article Published in The Express Tribune, October 21st, 2011. Branchless banking in Pakistan has shown an impressive growth in the first quarter of the current fiscal year as more and more people from the poor and low-income group are opting for the facility, according to State Bank of Pakistans (SBP) publication Branchless banking news released on Thursday. This publication for July-September quarter is the countrys first document on branchless banking, which will now be published every quarter. According to the publication, branchless banking is expected to be a game-changer in improving access for unbanked population to financial services. Total number of active branchless banking agents reached 17,448 in a short span of two years while the number of branches of all commercial banks is around 10,000. Active branchless banking accounts increased by 51.23 per cent to 357,598, deposits by increased by 28.03 per cent to Rs187 million, the number of transactions rose 26.93 per cent to 15.867 million and volume of transactions showed a 43.2 per cent increase to Rs58,710 million during the quarter. According to a recent report by CGAP easypaisa, the joint venture between Telenor Pakistan (the second largest cellular provider in Pakistan) and Tameer MicroFinance Bank launched in October 2009 has resulted in 23 million transactions by the end of July 2011, with a total throughput of Rs 43 billion (US$500 million). Also according to report the new entrants include MCB Bank Ltd, Mobilink, TCS, Bank Alfalah, and Askari Bank. Link: http://www.cgap.org/gm/document-1.9.55438/Brief_Pakistan.pdf

Voice over Internet Protocol (VoIP):Voice over Internet Protocol or VoIP is emerging technology which allows delivery of voice and multimedia session over the internet protocols networks or internet. Other names include IP telephony, Internet telephony, voice over broadband (VoBB), broadband telephony, and broadband phone VoIP fist convert voice data into digital data by dividing analog sound signal into packet data which can travel lie any other form of data such as email. This packet data when reach destination can be reassemble and converted back into analog so that receiving end end can hear voice. The main advantage of VoIP is t it uses existing resource used for data transmission hence reducing considerable cost to user. Another advantage of VoIP is portability as calls can be made and received where there is high speed internet connection is available. Other advantages include call forwarding, call waiting, voicemail, caller id, conference call without any extra cost. Major disadvantage of VoIP is that it cannot function without electric power like a regular phone. Other disadvantage of VoIP is that the quality of sound is less reliable compare to circuit switch public telephone network which will be overcome by use of latest technology and new developments. Another disadvantage is that its difficult to locate IP network geographically hence making difficult for emergence call centers to respond in timely and efficiently manner.

Muhammad Waqas Qazi Roll# 150514 TBO-41, Group-B