Finacle Blog

A recent study found that the average American spent 71% of his time with major media on 3 screens - the television, PC and mobile. These findings - which possibly apply to many markets - have major implications not just for advertisers, but for the financial services industry as well.
Of the 3, the PC and mobile phone have already established themselves as important channels of banking. However, the same cannot be said of television and previous attempts at TV banking have come a cropper. In my article  "Your TV as your bank" I had suggested that television banking and commerce could be a good option for developing markets with poor online connectivity but high TV penetration, provided it could support:

• Two-way communication between the user and the bank
• A dedicated channel for each banking institution
• Secure mail transmission

Now, I'd like to introduce a new concept of Virtual Online Banking (VOnline Banking) - a highly interactive mode of television banking using 'extreme biometrics'. In VOnline Banking, customers could tune into their banks' dedicated channel, use a simple microphone and headset to authenticate themselves by voice, and proceed to transact either the old fashioned way, using their remote or use voice and video instead. In the latter mode, they can simply issue verbal instructions to relationship manager, and on a split screen, interact with him while watching him process the transaction. The use of extreme (voice) biometrics along with television brings greater convenience and security to the medium.

While Satellite TV currently does not have the necessary storage capacity to support two-way communication in a big way, IPTV holds some promise in this aspect. In any case, I anticipate that Satellite TV infrastructure will acquire this capability within a few years. At that time, television could offer one more option to users of multiple banking channels, and like mobile banking has done so far, provide the only channel of financial access to many people who don't have any.

Posted by Amit Vats at 8:10 AM | Permalink | Comments (0) | TrackBacks (0)

When Swift launched eBAM (Electronic Bank Account Management), they considerably eased the pain of bank account management by business entities. eBAM is basically a set of standard messages using which small, medium and large companies can easily manage their account relationships across multiple banks, a task that would otherwise occupy considerable time and human resources.

Accordingly, software vendors have created specific solutions built around eBAM, using which companies can open, administer, update, transfer and close accounts online at multiple banks. But since this is what corporate online banking originally set out to do, you might wonder what's changed.

The difference lies in the scope - online banking restricted itself to providing a view of various accounts and creating a limited set of consolidated reports. In contrast, eBAM holds a much wider vision of corporate account management, which can be fully realized by doing the following:
 
•    Rather than creating separate software, an effort must be made to integrate the existing corporate online banking solution with Swift so that it can follow all the transactional messaging standards laid out under eBAM.  In practical terms, this means that the fields under the accounts management module of the online banking solution must be in sync with eBAM standards.

A point to note is that by doing so, the bank would also be able to 'push' a 360-degree customer view, available through its core banking solution, to the corporate customer via online banking.

Another advantage of enhancing the corporate online banking module to support eBAM standards is that it brings the direct banking facility also to small and medium business customers. Today, only individuals can open an account, entirely online, on a bank's direct banking portal. Through eBAM, banks can allow even small and medium-sized businesses to do so. While this may still require some paper documentation and back-end support, it considerably eases the account opening process, and signals a move towards full-fledged direct banking in future.

Clearly, it would be best if eBAM were to be a part of the corporate online banking module, and not a stand-alone solution.
 

Posted by Amit Vats at 11:54 AM | Permalink | Comments (0) | TrackBacks (0)

Here's an idea for banks to make their corporate online banking service work smarter. For some time now, banks have offered a facility called EBPP (Electronic Bill Presentment and Payment) to utility companies, which the latter use to distribute bills and collect payments from their large customer base. Typically, the EBPP module is plugged on to the existing corporate online banking service.

There is a case for extending this service to other corporate customers of the banks, including small and medium businesses. While B2B businesses might not have the same challenges in managing the volume of billing and collection procedure as B2C firms, they could be interested in some of the other value added possibilities that such a platform throws up, including formation of a closed user network of trusted trading partners, all of whom may or may not be having a banking relationship with the bank that is hosting the platform.

What is required is a single portal combining the entire range of corporate online banking services along with the tools for social interactivity, which is open not only to the banks' corporate account holders but to their partners (including customers and business associates) as well. In effect, this portal must blend the capabilities of B2B portals with traditional corporate online banking  - all of which exist as stand-alone solutions in most businesses today - to provide a single window of trade-driven interaction, exchange and financial supply chain management.

This is where businesses registered on the portal would fulfill almost every commercial activity - right from inviting tenders, raising bids, issuing orders and invoices to settling payments - as well as exchange knowledge or solve problems with the help of their trusted community partners.

The advantages are many.

To banks, a portal of this nature would provide a line of sight to a multitude of prospective customers that currently have account relationships elsewhere. By analyzing the sales and purchase patterns as well as financing needs of these firms, the banks can identify new business opportunities that they could target with better propositions.

For businesses, the portal would be their single window to managing their entire commercial operations as well as banking requirements.

Posted by Amit Vats at 11:50 AM | Permalink | Comments (0) | TrackBacks (0)

Most banks have a well laid out inclusion strategy to tap the mass poor in rural areas. But how will they draw in the 'other unbanked' - members of the millennial generation who are growing up in cities everywhere, showing little interest in a formal financial relationship?

Bloomberg Businessweek said that the Facebook pages of leading investment firms received less than 10,000 'likes' compared to over 4 million for Apple iTunes! Financial institutions are finding it hard to catch the attention of these future consumers, who, along with a number of unique characteristics, have developed a different notion of money and banking.

A March 2010 survey on the financial habits of Generation Y in the U.S. showed that over 60% consulted their family and friends before taking a financial decision; just 25% looked bank websites. Even otherwise, the bank's diminished role in the millennial scheme of things is quite obvious through simple observation. To them, cash is no longer another name for a banknote - its new forms include mobile currency, virtual credit and loyalty points all of which can be traded for physical or digital goods. Hence, an online retailer or telecom firm is a more visible financial service provider than the traditional bank.

Banks quickly need to find ways to become relevant to this demographic. That means extending their channels for greater connectivity over a variety of mobile-enabled devices, from the smartphone to the tablet; closing banking transactions in real time; enabling digital commerce through online channels and adopting 'cool' technologies delivering instant gratification.

Posted by Gautam Bandyopadhyay at 10:37 AM | Permalink | Comments (0) | TrackBacks (0)