Distance Banking Services (DBS) - PowerPoint PPT Presentation

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Distance Banking Services (DBS)

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Another difference lies in the nature of agency agreement between bank and the Non-Bank. Models of branchless banking can be classified into three broad categories ... – PowerPoint PPT presentation

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Title: Distance Banking Services (DBS)


1
  • Distance Banking Services (DBS)
  • Maria Gorchakova (BSUEL, Russia)
  • Introduction of Distance Banking Services
  • 1. Definition of Distance Banking Services
  • 2. Forms of Distance Banking Services
  • Internet Banking
  • 1. Main principles of Internet Banking
  • 2. Internet Banking for legal entities
  • 3. Internet Banking for individuals
  • Telephone Banking
  • Mobile Banking
  • 1. A mobile banking conceptual models
  • 2. Mobile banking business models
  • 3. Mobile Banking Services
  • 4. SMS-Banking

2
  • There are many remote distribution channels banks
    have been deploying for more than 20 years, to
    complement branch and call centers to interact
    with their customers, as illustrated in Fig. 1.

3
(No Transcript)
4
E-banking is defined as the automated delivery of
new and traditionalbanking products and services
directly to customers through electronic,
interactivecommunication channels. E-banking
includes the systems that enable
financialinstitution customers, individuals or
businesses, to access accounts, transact
business, orobtain information on financial
products and services through a public or
privatenetwork, including the Internet.
Customers access e-banking services using an
intelligentelectronic device, such as a personal
computer (PC), personal digital assistant
(PDA),automated teller machine (ATM), kiosk, or
Touch Tone telephone.
5

The functions provided by banks on the Internet
have evolved from simple consultation of account
to a full range of banking services. In the most
developed applications, one can access on the
Internet nearly all services accessible at the
branch or by phone. In addition to offering all
branch-based services, technology allows
banks to offer new added value services only
available online such as personalised financial
information menus, e-mail alerts, electronic
commerce, real-time brokerage and third party
services (management of electricity bills, tax
payment or portals) which increase the benefits
and interest of the service. Fig. 2 below shows
a possible classification of Internet banking
services.
6

7
  • Telephone banking is a service provided by a
    financial institution which allows its customers
    to perform transactions over the telephone.
  • Most telephone banking use an automated phone
    answering system with phone keypad response or
    voice recognition capability. To guarantee
    security, the customer must first authenticate
    through a numeric or verbal password or through
    security questions asked by a live representative
    (see below). With the obvious exception of cash
    withdrawals and deposits, it offers virtually all
    the features of an automated teller machine
    account balance information and list of latest
    transactions, electronic bill payments, funds
    transfers between a customer's accounts, etc.
  • Usually, there is also the possibility to speak
    to a live representative located in a call centre
    or a branch, although this feature is not
    guaranteed to be offered 24/7. In addition to the
    self-service transactions listed earlier,
    telephone banking representatives are usually
    trained to do what was traditionally available
    only at the branch loan applications, investment
    purchases and redemptions, chequebook orders,
    debit card replacements, change of address, etc.

8

The main components of the solution are
9
  • Mobile Banking (also known as M-Banking,
    mbanking, etc.) is a term used for performing
    balance checks, account transactions, payments
    etc. via a mobile device such as a mobile phone.
    Mobile banking today (2008) is most often
    performed via SMS or the Mobile Internet but can
    also use special programs downloaded to the
    mobile device.
  • A mobile banking conceptual model. In one
    academic model, mobile banking can be said to
    consist of three inter-related concepts
  • Mobile Accounting
  • Mobile Brokerage
  • Mobile Financial Information Services
  • Most services in the categories designated
    Accounting and Brokerage are transaction-based.
    The non-transaction-based services of an
    informational nature are however essential for
    conducting transactions - for instance, balance
    enquiries might be needed before committing a
    money remittance. The accounting and brokerage
    services are therefore offered invariably in
    combination with information services.
    Information services, on the other hand, may be
    offered as an independent module.

10
  • Trends in mobile banking
  • The advant of the Internet has revolutionized the
    way the financial services industry conducts
    business, empowering organizations with new
    business models and new ways to offer 24x7
    accessibility to their customers.
  • The ability to offer financial transactions
    online has also created new players in the
    financial services industry, such as online
    banks, online brokers and wealth managers who
    offer personalized services, although such
    players still account for a tiny percentage of
    the industry.
  • Over the last few years, the mobile and wireless
    market has been one of the fastest growing
    markets in the world and it is still growing at a
    rapid pace. According to the GSM Association and
    Ovum, the number of mobile subscribers exceeded 2
    billion in September 2005, and now exceeds 2.5
    billion (of which more than 2 billion are GSM).
  • According to a study by financial consultancy
    Celent, 35 of online banking households will be
    using mobile banking by 2010, up from less than
    1 today. Upwards of 70 of bank center call
    volume is projected to come from mobile phones.
    Mobile banking will eventually allow users to
    make payments at the physical point of sale.
    "Mobile contactless payments will make up 10 of
    the contactless market by 2010.

11
  • Mobile banking business models
  • A wide spectrum of Mobile / branchless banking
    models is evolving. These models differ primarily
    on the question that who will establish the
    relationship (account opening, deposit taking,
    lending etc.) to the end customer, the Bank or
    the Non-Bank / Telecommunication Company (Telco).
    Another difference lies in the nature of agency
    agreement between bank and the Non-Bank. Models
    of branchless banking can be classified into
    three broad categories - Bank Focused, Bank-Led
    and Nonbank-Led.

12
  • Bank-focused model
  • The bank-focused model emerges when a traditional
    bank uses non-traditional low-cost delivery
    channels to provide banking services to its
    existing customers. Examples range from use of
    automatic teller machines (ATMs) to internet
    banking or mobile phone banking to provide
    certain limited banking services to banks
    customers. This model is additive in nature and
    may be seen as a modest extension of conventional
    branch-based banking.

13
  • Bank-led model
  • The bank-led model offers a distinct alternative
    to conventional branch-based banking in that
    customer conducts financial transactions at a
    whole range of retail agents (or through mobile
    phone) instead of at bank branches or through
    bank employees. This model promises the potential
    to substantially increase the financial services
    outreach by using a different delivery channel
    (retailers/ mobile phones), a different trade
    partner (telco / chain store) having experience
    and target market distinct from traditional
    banks, and may be significantly cheaper than the
    bank-based alternatives. The bank-led model may
    be implemented by either using correspondent
    arrangements or by creating a JV between Bank and
    Telco/non-bank. In this model customer account
    relationship rests with the bank

14
  • SMS banking is a technology-enabled service
    offering from banks to its customers, permitting
    them to operate selected banking services over
    their mobile phones using SMS messaging.
  • SMS banking services are operated using both push
    and pull messages. Push messages are those that
    the bank chooses to send out to a customer's
    mobile phone, without the customer initiating a
    request for the information. Typically push
    messages could be either Mobile marketing
    messages or messages alerting an event which
    happens in the customer's bank account, such as a
    large withdrawal of funds from the ATM or a large
    payment using the customer's credit card, etc.

15
  • Another type of push message is One-time password
    (OTPs). OTPs are the latest tool used by
    financial and banking service providers in the
    fight against cyber fraud. Instead of relying on
    traditional memorized passwords, OTPs are
    requested by consumers each time they want to
    perform transactions using the online or mobile
    banking interface. When the request is received
    the password is sent to the consumers phone via
    SMS. The password is expired once it has been
    used or once its scheduled life-cycle has
    expired.
  • Pull messages are those that are initiated by the
    customer, using a mobile phone, for obtaining
    information or performing a transaction in the
    bank account. Examples of pull messages for
    information include an account balance enquiry,
    or requests for current information like currency
    exchange rates and deposit interest rates, as
    published and updated by the bank.
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