Financial Daily from THE HINDU group of publications
Monday, Jul 15, 2002
Financial Daily from THE HINDU group of publications Monday, Jul 15, 2002 |
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Banking Money & Banking - Internet Forget queues; bank online Poornima Mohandas
MUMBAI, July 14 BANKS are trying to bring on `channel migration'. They are trying to coax people vexed with crowds and queues to bank online. Value-added services are being offered by the dozen to entice them. `File your income-tax returns, pay insurance premiums, buy mutual funds, trade in Government securities, pay your MSEB, mobile phone or MTNL bills online through our online banking facility' - every private and foreign bank is screaming hoarse, in an effort to be heard in the clutter. "Our customers demand these services. Most of our value-added services are based on feedback,'' said an IDBI bank official. Besides the cost advantage involved in getting clients to bank online than managing footprints at a branch, with increasing PC penetration the customer is also demanding the comfort of banking from where he is than from where his bank is. According to the IDBI Bank official, 65-70 per cent of the bank's online customers check their balances and want account statements, 10-15 per cent request fund transfers, 10 per cent make bill payments and the remaining five per cent make requests for cheques and stop payments. The potential number of customers for Internet banking is equal to the number of Internet connections in India, says Mr Krishna Prasad T, Chief Manager, Internet Banking Group, ICICI Bank. "There will definitely be growth in Internet banking,'' says a senior Indian Banks' Association official. However, security risk which is perceived to be high acts as a deterrent, he adds. Concept acceptance, however, is yet to happen, say most bankers. Scepticism, distrust and lack of awareness reign at this point in time. "We are setting up information kiosks manned by our personnel to familiarise our existing customers with the online ways,'' said Mr Subir Mehra, E-Team Head, HSBC Bank. It is also a matter of getting the customer hooked to the comfort. "Once a customer banks online he will never go back to the branch. Reverse channel migration does not happen,'' said a private banker. Absence of inter-bank electronic funds transfer is still a handicap. Unless there is inter-bank, online settlement, Internet banking is not likely to pick up, says a banker. At the moment, only ICICI Bank offers inter-bank fund transfer through the RBI's electronic fund transfer `EFT' facility. Through `e-cheques' a customer can send money from his account to accounts in other banks. Once the Reserve Bank of India's Real Time Gross Settlement (RTGS) package is made functional, the concept will gather momentum. RTGS will introduce an instantaneous, inter-bank settlement system, says the official. Currently, banks are trying to penetrate deeper into existing account bases. With 70,000 online customers and 13 per cent penetration in its total retail client base, HSBC Bank is satisfied with its online presence in India. The bank aims to achieve a 25 per cent penetration, which is equivalent to its US market penetration levels.
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