The Future of On-Line Banking Global Trends and Local Prospects Presented by Sanjay Kao - Cards...
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Transcript of The Future of On-Line Banking Global Trends and Local Prospects Presented by Sanjay Kao - Cards...
The Future of On-Line BankingThe Future of On-Line BankingGlobal Trends and Local ProspectsGlobal Trends and Local Prospects
Presented by Sanjay Kao - Cards Business Manager & Marketing HeadPresented by Sanjay Kao - Cards Business Manager & Marketing HeadGlobal Consumer Bank - EgyptGlobal Consumer Bank - Egypt
AGENDAAGENDA Defining On-line BankingDefining On-line Banking
The difference between PC banking and Internet Banking
The Importance of Online bankingThe Importance of Online bankingPro’s & Con’s
Past, Present & FuturePast, Present & Future Services OfferedUsage RatesFaced Problems, and problems solved
Citibank Citibank Global Presence and RoleFuture WorksLocal aspirations
EgyptEgypt
The Future of Online BankingThe Future of Online Banking
What is On-line BankingWhat is On-line BankingCONVENIENTCONVENIENT
FAST
CHEAPCHEAPINNEVITABLEINNEVITABLE
The Future of Online BankingThe Future of Online Banking
Why is it ImportantWhy is it Important
• For Customers:For Customers:• There’s a seemingly receptive audience out there waiting
• Most don’t feel the need to have a face-to-face conversation with tellers or think its important to have a checking account with a local branch office.
• For Banks:For Banks:• The most important reason being ECONOMICS.
• Each Internet transaction typically costs the bank one cent
• Compare that with 27 cents for each ATM transaction
• USD 1.07 every time you go up to a tellers window !!!
The Future of Online BankingThe Future of Online Banking
PC vs. Internet BankingPC vs. Internet Banking
• PC Banking PC Banking (also known as Home Banking):(also known as Home Banking):• The use of proprietary financial software running on a
computer in the home.
• Direct dial-in into the banks servers.
• Internet Banking:Internet Banking:• Similar in functionality to PC Banking
• Allows access through a browser eliminating the need for proprietary software
• Can be accessed through a regular Internet connection, through the sites public web site.
The Future of Online BankingThe Future of Online Banking
Past, Present & FuturePast, Present & FuturePast:Past:– No automated services, simple brochureware (1-7 pages of simple brochure ware)– This further developed into Detailed brochureware (5 or more pages of information; attractive branding)
Present:Present:– Interactive Bank (Includes formatted email service, online calculator)– Intermediate Cyberbank (Lets customers consult accounts online)– Advanced Cyberbank (Fully transactional for transfers, payments, sales)
Future:Future:– Interfaced Services (Banking services streamlined into other services, not limiting online banking to the
computer)
The Future of Online BankingThe Future of Online Banking
[[a] Services Offereda] Services Offered
Past, Present & FuturePast, Present & FutureThe Future of Online BankingThe Future of Online Banking
PastPast
PresentPresent
FutureFuture
Simple Simple BrochureBrochure
InterfacedInterfacedServicesServices
AdvancedAdvancedCyberbankCyberbank
IntermediateIntermediateCyberbankCyberbank
InteractiveInteractiveBankBank
AdvancedAdvancedBrochureBrochure
[[A] Services OfferedA] Services Offered
Services Presently AvailableServices Presently AvailableThe Future of Online BankingThe Future of Online Banking
Product / FunctionProduct / FunctionProduct / FunctionProduct / Function Standard ServicesStandard ServicesStandard ServicesStandard Services Advanced ServicesAdvanced ServicesAdvanced ServicesAdvanced Services
ATMsATMs
CheckingChecking
Credit CardsCredit Cards
Customer ServicesCustomer Services
Home Equity LoansHome Equity Loans
ATM locator with addresses Locator, Mapping and Pricing
Balance & transaction historyDownload to OFX enabled software
Animated report generationArchival searchesBill payment & presentment
Available credit & Tn. History Tn. History reportsSkip-pay & balance transfer Bill payment and cash adv.
FAQs and Emails/contacts Customer query formsReal time chat with CSRImmediate mail response
Rates & pay. CalculatorsBalance & Trans. History
Balance Transfer & LoanAdvance formsRate History
Investments Investments (non FDIC)(non FDIC)Yields, Prospectus & Sign-upForms
Portfolio trackingNews Alerts
Services Presently AvailableServices Presently AvailableThe Future of Online BankingThe Future of Online Banking
Product / FunctionProduct / FunctionProduct / FunctionProduct / Function Standard ServicesStandard ServicesStandard ServicesStandard Services Advanced ServicesAdvanced ServicesAdvanced ServicesAdvanced Services
Loan ApplicationsLoan Applications
MortgagesMortgages
Privacy/Security Privacy/Security
SalesSales
Savings/ CDsSavings/ CDs
Standard Online application Interactive Loan applicationInstant approvalApplication status tracking
Rates & Calculators Extra Principle payment formQuick home equity loanEscrow account analysisRefinance analysisHome value reports
Info. On how to order credit reports
Credit Report accessBank branded cybercash walletsZero liability for e-commerce
Online applications Remembered data inputs
Rates; Savings/Retirement calculators
Automatic savings plans that can be fine-tuned on the Web
Services of the FutureServices of the Future
•PUSHPUSH services -services -alerts, emails, webcasting, outbound alerts, emails, webcasting, outbound
messagingmessaging
»BILL Presentment & AUTOMATED PAYMENT PROCESSINGAUTOMATED PAYMENT PROCESSING
– Privacy ProtectionPrivacy Protection
&& Fraud-prevention servicesFraud-prevention services
The Future of Online BankingThe Future of Online Banking
Services of the FutureServices of the Future
•WebTVWebTV
set-top boxes & built-in capabilitiesset-top boxes & built-in capabilities
» Email Phones, Voice recognition for the web & Out - of - home UsersOut - of - home Users
– Cellular Financial ProcessorsCellular Financial Processors LinkingLinking Banking with GSMBanking with GSM
The Future of Online BankingThe Future of Online Banking
Past, Present & FuturePast, Present & Future[[b]b] On-line Banking Penetration in U.S HouseholdsOn-line Banking Penetration in U.S Households
The Future of Online BankingThe Future of Online Banking
5 5 MMMM
199719979 9 MMMM
19981998
15 15 MMMM
19991999
22 22 MMMM
20002000
28 28 MMMM
20012001
Past, Present & FuturePast, Present & Future
[b][b] Usage Rates in EuropeUsage Rates in Europe
Europe’s Top Web MarketsCountryCountry Internet PopulationInternet PopulationGermany 7.6 million
U.K. 5.5 million
France 2.3 million
Netherlands 1.5 million
Spain 1.1 million
Italy 1.0 million
Belgium 660, 908
The Future of Online BankingThe Future of Online Banking
•52% 52% of the 863 European Bank Internet sites are “Advanced Cyberbanks”of the 863 European Bank Internet sites are “Advanced Cyberbanks”•16% of the 1, 676 US sites are “Advanced”16% of the 1, 676 US sites are “Advanced”
Past, Present & FuturePast, Present & Future[[c] On-line Banking Problemsc] On-line Banking Problems
The Future of Online BankingThe Future of Online Banking
On-line bankers need & want the following 5 features:
[a] A sophisticated security system[a] A sophisticated security system• Security is probably one thing that holds potential customers from signing
up• It is also the main concern of current e-bank customers
[b] Low fees[b] Low fees• Generally speaking, Internet Banking is cheap, with an average fee of $5• When it comes to PC banking, its FEES GALORE!!
[c] Real-time information & detailed account info.[c] Real-time information & detailed account info.• E-Banking customers expect transactions to happen instantly, but with most
banks a transaction would take a full day to clear
[d] 24 Hour customer service features & duplicated branch banking[d] 24 Hour customer service features & duplicated branch banking• Quick responses to e-mail/ chats with CRS & FAQ’s are a challenge
[e] Wide array of products[e] Wide array of products• Many banking products can’t be bought online without having to pick up
the phone, walk to the nearest branch, or wait for a sales associate to call.
Past, Present & FuturePast, Present & Future[[c] Problem Solutionsc] Problem Solutions
The Future of Online BankingThe Future of Online Banking
[[a] A sophisticated security systema] A sophisticated security system• A password to log in; A Firewall; 75 or 128-bit encryption technology
[b] Low fees[b] Low fees• Removal of monthly/ subscription fees, and shrinking transaction fees
[c] Real-time information & detailed account info.[c] Real-time information & detailed account info.• Real time update of account balances and transaction logs• Unlimited number of preset bill payments - automatic at specific day of
every month• Automatic transfers on preset dates, instant cheque book balancing
[d] Wide array of products[d] Wide array of products• Instant on-line approvals to applications• Fully automating internal fulfillment processes to further allow additions of
online products
Citibank on Online BankingCitibank on Online BankingCASE STUDYCASE STUDY
The Future of Online BankingThe Future of Online Banking
• Started e-banking in 1984• It was a PC banking service offered by dial-ins to Bank server• Started Internet banking 2 years ago• Major Project “Direct Access”• Internet sites for 33 countries, 11 of which have Internet Banking• 5 - 7% of all US customers are using the Internet Banking
service• Maintain higher balances• Higher Loyalty• Better overall relationship with the bank
• By September ‘98, Asia region acquired 7000 new customers through the Internet
• Within a couple of months of the launch of “Direct Access” in the UK, 15000 new customers acquired through the new service.
Egypt’s ReverieEgypt’s ReverieThe Future of Online BankingThe Future of Online Banking
• Dramatic reduction in access costs should attract more peopleonline
• The service will be surprisingly welcomed…
A quote from John L. Campbell, CEO of First Community Bank of East Tennessee, and his reaction of the town’s 4,800 residents banking habits:
“ “ I thought in rural Tennessee we would not be confronted with Internet banking in my lifetime. I was wrong.”
The Future of Online BankingThe Future of Online Banking
On-Line Banking is the kind of On-Line Banking is the kind of breakthrough service, like ATMs, breakthrough service, like ATMs,
that will have the users that will have the users reminiscing in the Year 2005…reminiscing in the Year 2005…
““Wow, how did I ever Wow, how did I ever manage manage
without it?”without it?”