Publish : 15 Nov, 2014 00:00:00

Time saving technology and smart banking services

Syed Mahmud Hasan (Tanim)
Technology in the banks is presently catching up with a high level of development around
the world. Recent economic turmoil and increasing market complexity has placed
unprecedented pressure on financial institutions. The demand for a digital lifestyle and
the technological revolution it brings to homes and the workplaces, coupled with a
significant demographic shift and a new regulatory framework, are subjecting the finance
sector to a host of new challenges in a time of severe market uncertainty. However, it is in
times such as these that opportunities arise for companies to step outside their comfort
zones, fueling innovation on the financial services landscape.
In an attempt to optimize services and minimize costs, banks are frequently migrating
towards a 24-7 service and customers are enjoying the greater sense of freedom that this
creates. Availability is the name of the game as we demand instant access to loans,
deposits and our account status.
So what is the next step? In a bid to drive even greater differentiation from the
competition, financial services institutes are now exploring alternative banking channels,
including the Internet banking (which customers can access anytime, worldwide), ATMs
and Fast Tracks (providing cash and other services in selected locations in Bangladesh
normally near customers homes, offices or other generally convenient locations for 24
hours a day, 365 days a year), sms/alert banking (which is accessible from anywhere in
Bangladesh, 24 hours a day), POS terminals (used to charge a plastic card for payment of
shopping/hotel bills from anywhere in the world), Mobile banking (which allows
customers of a financial institution to conduct a number of financial transactions through
a mobile device such as a mobile phone or tablet), Call Centres (providing services to
customers over phone, available 24 hours).
These services save time and effort through smart banking activities while managing
personal accounts and transactions.

Evolving Technology
The world banking sector has been revolutionized over the past 30 to 40 years by an
onslaught of new technologies and a widespread change in the regulations governing the
use of this technology. As a result, many banks have started adapting their distribution
channels and shifting from frontal personal service to direct sales and marketing via
phone, email or electronic transactions.

In Bangladesh, Foreign Commercial Banks (FCBs) including Standard Chartered Bank

and HSBC are the leading banks to introduce technology driven banking services. These
banks along with some other banks provide services like debit card, credit card, ATM,
Point of Sale (POS) services, internet banking, mobile banking, Electronic Fund Transfer
(EFT), any branch banking and so on. Most of the Private Commercial Banks (PCBs) are
also providing these facilities but the state-owned banks are not improving with more
rapid pace than other banks. All the PCBs are highly improving their service area through
using modern technology to make customer service easy. Customers are now getting
much easier access to the banking services due to development of main channels.
Technology driven service provided by banks in Bangladesh Development of main
channels:
Internet banking system
Internet banking refers to the use of internet as a remote delivery channel for banking
services which permits the customer to conduct transactions from any terminal with
access to the internet. It is the WWW through which banks can reach their customers
directly with no intermediaries. Internet banking is being provided by some banking
services via internet that include account balance enquiry, fund transfer among accounts
of the same customer, opening or modifying term deposit account, cheque book or pay
order request, exchange rate or interest rate enquiry, bills payment, account summary,
account details, account activity, standing instructions, loan repayment, loan information,
statement request, cheque status enquiry, stop payment cheque, refill prepaid card,
password change, L/C application, bank guarantee application, lost card (debit/credit)
reporting, pay credit card dues, view credit card statement, or check balance.
ATM (Automated Teller Machine)
An automated teller machine (ATM), also known as an automated banking machine
(ABM, Canadian English) is an electronic telecommunications device that enables the
customers of a financial institution to perform financial transactions without the need for
a human cashier, clerk or bank teller.
On most modern ATMs, the customer is identified by inserting a plastic ATM card with a
magnetic stripe or a plastic smart card with a chip that contains a unique card number and
some security information such as an expiration date or CVVC (CVV). Authentication is
provided by the customer entering a personal identification number (PIN).
By using an ATM, customers can access their bank deposit or credit accounts in order to
make a variety of transactions such as cash withdrawals, check balances, or credit mobile
phones. If the currency being withdrawn from the ATM is different from that in which the
bank account is denominated, the money will be converted at an official exchange rate.

Thus, ATMs often provide the best possible exchange rates for foreign travellers, and are
widely used for this purpose.
SMS and Alert Banking Systems
Considering the high accessibility of mobile phones in Bangladesh, banks have
introduced SMS and Alert Banking for the convenience of customers. This has become a
very popular and useful means of inquiring bank account information. Now with phones
and without the need for a data connection, a customer can inquire about their account
balance; view their last few transactions, transfer funds, pay utility bills and more.
POS (Point of Sales)
Point of sale (also called POS or checkout, during computerization later becoming
electronic point of sale or EPOS) is the place where a retail transaction is completed. It is
the point at which a customer makes a payment to the merchant in exchange for goods or
services. At the point of sale the retailer would calculate the amount owed by the
customer and provide options for the customer to make payment. The merchant will also
normally issue a receipt for the transaction.
The POS in various retail industries uses customized hardware and software as per their
requirements. Retailers may utilize weighing scales, scanners, electronic and manual cash
registers, EFTPOS terminals, touch screens and any other wide variety of hardware and
software available for use with POS. For example, a grocery or candy store uses a scale at
the point of sale, while bars and restaurants use software to customize the item or service
sold when a customer has a special meal or drink request.
Mobile Banking
Mobile Banking is one of the latest tools for easy and convenient banking in the current
world. Mobile Banking is a banking process without bank branches which provides
financial services to unbanked communities efficiently and at affordable cost. The
banking and financial services provided are cash-in, cash out, merchant payment, utility
payment, salary disbursement, foreign remittance, government allowance disbursement.
Day to day mobile payment and banking has become popular in Bangladesh. DutchBangla Bank Limited (DBBL) has for the first time introduced its mobile banking
service expanding the banking service from cities to remote areas. Currently many banks
are providing this service and some banks are going to lunch this M-banking service. The
most potential customers of mobile banking are rural people. About 35% of mobile
banking consumers are highly satisfied with present mobile banking service.
Mobile Banking scenario of Bangladesh:
Tele Banking

Telephone banking is a service provided by a bank or other financial institution, that

enables customers to perform financial transactions over the telephone, without the need
to visit a bank branch or automated teller machine. Telephone banking times can be
longer than branch opening times, and some financial institutions offer the service on a
24-hour basis. From the banks point of view, telephone banking reduces the cost of
handling transactions by reducing the need for customers to visit a bank branch for noncash withdrawal and deposit transactions.
Call Centers
First call center was launched in 1983 in the USA by MCI. This marked a shift by many
organizations towards centralized customer service centers, often with an automatic reply
service (IVR) incorporating voice recognition systems. However, despite these efforts
away from personal interaction, the majority of call centre activities still involve human
representatives, particularly when dealing with transactions.

Upcoming Channel
Home Banking
Home Banking is the banking service in which an individual or a business organization
can get facility to beneficiary to banking transactions attending in his/her office or home.
Different types of arrangement of electronic activities are - fund transfer, debit, credit,
balance enquiry and credit applications etc. Internet is considered as important
components in Home Banking. Different types of software packages encourage
transaction to the customers.
Agent Banking
Agent banking is a new dimension for providing banking services. Agent banking is to
provide banking services to the bank customers through the engaged agents under a valid
agency agreement, rather than a teller/cashier. It is the owner of an outlet who conducts
banking transactions on behalf of the concerned bank.
National Payment Switch (NPS)
NPS stands for National Payment Switch. Bangladesh Bank has decided to launch a new
alternative delivery channel, which is very much wide and effective. This is called
National Payment Switch (NPS). A customer of any branch of any bank will get the
facility to transact from any branch of any bank. The main objective of NPS is to create a
common electronic platform for the switches in Bangladesh. National Payment Switch

Bangladesh (NPSB) is a mother switch of all other switches in the country. NPSB will
facilitate the expansion of the card based payment networks substantially and promote ecommerce throughout the country. Online payment of government dues, using cards and
account number information through Internet will greatly be enhanced using NPSB.
Payment Systems Department (PSD) is concerned to operate and settle the transactions
regularly. NPSB was launched as go-live on December 27, 2012 to route ATM
transactions.

Main Role of Channels:

Smart banking activities
Saving time
Non limitation in timeframe
Simplicity of transaction
Safety of transaction
Cost minimization
Smoothness in working
Accuracy in working
Step to develop the human resources
Building the right product mix
Attainment, status & performance of ADC

So if we want to go ahead and reach the door of 160 million (16 crore) people with
services, we have to see the big picture of banking arena and extend the alternative
delivery channels based on information technology. Thus banking sector in Bangladesh
will achieve the goals and reach the stair of golden success.

The writer is a banker. E-mail mahmud_hvc@yahoo.com