Chapter 6 – Technology in Retail Banking

Technology is the foundation on which the retail banking is based. It enables to build and translate a customer data base into retail banking business_ The levels of technology implementation in PSBs started from stand alone Automated Ledger Posting Machines (ALPMs) in 1980s. New generation private sector banks started with technology advantage of a single server environment. PSB banks also have reengineered their technology initiatives and started implementing core banking solutions networking the customers and accounts on a single platform. The implementation of core banking will directly increase the chances of availability of customer data base across products and will increase the scope for cross selling and up selling. Core banking gives clues about the level to which the data base is horizontally or vertically organized. Horizontal or vertical organized refers to whether data is available product wise on a stand alone basis or data is available customer wise on an integrated basis.

Technology Processes in Retail Banking

Observations of Boston Consulting Group Study “Opportunities for Action in Financial Services – Transforming Retail Banking Processes”: In terms of processes for integration of technology in retail banking retail banks are using different approaches to standardise their processes. There are four distinct process models as given below:

  1. Horizontally Organised Model: Individual process platform supports one product only. The sub data in the model are not shared with other products and product platform.
  2. Vertically Organised Model: Functionality is provided across all products. In this model, customer information is centralised. Centralised customer information builds common origination and servicing processes across all its retail banking products.
  3. Predominantly Horizontally Organised Model: Some modularization within a product oriented feed back. Customer data integration is available to a certain extent for other products.
  4. Predominantly Vertically Organised Model: is a hybrid model that offers common information for most of the related services. The basic information is available across products for common services to the various products.

Some Important User Friendly features

Advisor

  1. This product empowers banks to deliver products and services through a fully assisted self service channel. The product provides banking customers real-time access to their relationships with the bank, such as account inquiries, fund transfers, remittances, credit card and mutual fund payments. It enables them to make payments through channels like the Internet, kiosk etc.
  2. Key Modules
    1. Customer Interface
    2. Advisor Interface
    3. AudioNideo Support
    4. Co-browsing
    5. Advisor Performance Management.
  3. Business Benefits: The solution’s self-service capabilities empower customers to access comprehensive banking services in a completely secure environment and enables banking staff to understand customer needs better.
  4. Robust Inclusivity Framework: The solution extends the reach of the bank’s services to various customer segments, including specific under-banked and unbanked communities.
  5. Cost Savings: Since banks use their existing Internet banking solution, cost is reduced.

Alerts

The alerts solution empowers banks to alert end users about events recorded by the bank’s diverse business systems. In addition to alerting corporate and retail customers of the bank, the solution provides alerts for the bank’s internal users as well. Banks can define alert categories to control access to various alerts. It also supports addition of branding messages as part of notifications.

Customer Analytics

This solution along with universal banking solution, provides complete customer analytics for banks through business reports and statistical models. It results in business benefits, enhanced customer value, improved decision making support, reduced time to market and low total cost of ownership.

Wealth Management

  1. Wealth management solutions are integrated core banking and investment management system designed for the specific needs of retail and private banks. Integrated with core banking and CRM solutions, the wealth management solutions ensure unique customer definition, a single, unified view of the customer’s portfolio across asset classes and seamless flow of transactions. This helps banks capitalize on their customer base to create additional revenue streams, by offering High Net worth individuals and the mass affluent extended products and services.
  2. Key Modules
    1. Structured Products,
    2. Mutual Funds,
    3. Equities,
    4.  
  3. Business Benefits: It enables banks have insights about the High Net worth individual client’s investment portfolio which can be used to explore prospects for cross-selling and fee-based personalized advice.
  4. Ease of Enhancing Product Portfolio: The user-friendly solutions provide flexibility to tailor solutions and create new product for emerging customer segments.
  5. Higher Operational Efficiency: The solutions enable Straight Through Processing (STP) to interface with the bank’s core banking solution and external data sources. This helps in minimizing operational delays.
  6. Lower Total Cost of Ownership (TCO): Wealth management solutions can be integrated with other enterprise applications.
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