Bank on IT to keep your money safe

Friday, November 02, 2007

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IT has extended the business of banking to every conceivable channel be it Internet, ATMs, mobiles and now even trains! Soon you would be spared the pain of safekeeping multiple PINs and passwords through Biometrics. All this comes with its own set of challenges. Read on to find out about those challenges, and how banks are finding innovative ways to resolve them

Given the frenetic pace of life, we're all hard-pressed for time and energy to take care of our critical tasks. And most of these inevitably require transacting money in one form or the other. A growing economy and the associated perils of inflation together ensure that banking and financial transactions increase in volumes with each passing day. Just do a quick rehash of where you depend on banks to fulfill daily needs and you'll know. Cash withdrawals or deposits, utility bills (electricity, mobiles, landlines), corporation taxes, income-tax, advance tax, transfer of funds across accounts, fixed deposits, share trading and so on. How do you take time off your busy professional schedule to visit the bank and carry these out? Thankfully, it's the other way round. The trend among banks and financial services companies has been to leverage IT to go to their customers instead of the other way around. That's why one can see banks introducing so many channels for reaching out to their customers, like phone banking, SMS banking, online banking, ATMs, credit cards, debit cards and so on.

This sounds really impressive because banks have to use IT extensively to make it happen. But, it comes with its own set of challenges, which the CIOs of banks have to cope up with. One key concern is ensuring security of all these channels. More channels means more number of ports opening up. Plus, the security of transactions through these channels also has to be ensured. The other key challenge is integration of various applications and their data. Every bank today is trying to offer a host of services to customers. So apart from bank accounts, a bank today also offers loans, investment options, credit cards, etc. There are high chances that some of the customers are common across these applications. However, since these applications have grown separately, integrating them together to offer cross sell opportunities is a major challenge. It's a real challenge in front of banks to utilize information generated through one application for servicing the same customer for another application. Simply count the number of times you get calls from the same bank, each time trying to sell some product/service or the other but completely oblivious of the fact that you might already be their existing customer and therefore would expect the caller to have done his homework properly and not bother you for basic information such as address, email, age, etc.

Sadly, this is seldom the case and more often than not you have to bear unwarranted calls from one bank or the other. So, clearly banks have a challenge here. To integrate data across different banking applications so that agents manning various bank channels know before hand whether a customer they're calling is already a customer or not.

Another challenge before banks is to tap the vast market of rural customers. In fact, this is one area that remains neglected because of inadequate civic and telecom infrastructure. May be it is time for banks to go beyond traditional solutions and look at some of innovative ones. One such alternative is the use biometric technologies in offering banking services to far-flung areas. In this story we explore the solutions to all these challenges and see what Indian banks have already done to alleviate those.

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