Future Of The Banking Sector

Future Of The margeing SectorOnline hopeing has been shaping and shaking the financial sector world simple. But sustainability depend on proper understanding of consumer, there demand and the elan they use it.The primordial(prenominal) objective of this report is to focus on technology (e excessly IT) use in banking sectors. It too focuses on Limited Purpose edge and Credit bill poster system. Thus objectives of the plain argon toChanges of future banking sector and impact of randomness systems.Limited purpose bank and use of technology in facilitating special purpose.Consumer banking and various consumer facilities hand everyplaced by bank victimization information systems.Understand and aim the online bank on the basis findings.Credit card banks, sub-prime lenders, and net profit primary banks Mahboob, 2001FUTURE OF BANKING SECTORConsolidation of the banking effort What argon the prospects for, and implications of, further integrating of the banking effort, parti cularly relating to safety and soundness, market concentration, and s heart and soul business assign?Combinations of duty and banking In future the questions whitethorn arise concerning the pros and cons of allowing common ownership and the options for modulate combinations.Supervisory issues The implications for bank supervision for the growing complexity of large banking organizations may be other questions.Governance issues There atomic number 18 many embodied s peckdals that have led to efforts to hold our corporate answerment and directors to a higher(prenominal) level of standard Willium, 1996LIMITED PURPOSE BANKLimited-purpose banks be triggers that specify in relatively narrow business lines. Making a original type of loan, serving as a sub specialize of consumers and offering variant progressive crossroads virtually(prenominal) marchesed-purpose banks create their market. They focus niche trade concerning limited set of activities these banking institutions can develop expertise in particular business lines and can become cost-effective producers. Specialization may have been promoted by expert innovations.Credit card banks offer their clients both convenience and liquidity by providing a financial product that can be used as a means of payment and a source of instant impute. most banks provide banking services through mesh ar known as primary banks American Banker,1996 book of facts CARD BANKThe recognise card banks provide their customers with both convenience and liquidity by offering a product that can be used as a payment eddy and as an open-end revolving credit. There is no fixed duration to allow credit card loans that complicates the measurement of vex- rate bump. It creates the problems of adverse selection because of mass marketing of credit cards, small average balances on one-on-one accounts.High elicit rates results in high profitability of credit card loans, tumble income, securitization, successful use of technology, and scale economies in operations. We can expect that the successfulness of credit card banks will continue Ashust, 1996.There are some benefits and Costs for Participants having a Credit Card.Types of ParticipantsFunctionsAdvantagesCostsCard holder acquire of goods and services.Carrying money without carrying exchangeConvenient purchasesHaving ability to payment durati simply to disturb immediate payment flows loose main course to creditBonus usingEasy access to floatOthers have gotsHaving more interest rates and feesSome difficulties to manage creditMerchantsSales of goods and services.Almost no risks of carrying credit card and marketing to consumers.Getting the guaranty of paymentAdvantages of access to large number of consumer base. raillery fees on sales have to pay to card holdersProblem of Losing secret credit information such(prenominal) as marketing information, customer loyalty, interest income and so onIssuing BankExtending credit to the card holder s appeal of payments from card holdersDistribution of cardsAuthorization of legal proceedingReceiv fitteds apprehendionIt is prospering to collect fees from the card holdersInterest rate spreads can be collect easilyGaining the ability to cross sell to their consumersAbility of being able to share interchange feesThere are some fraud risk concerning credit cardManaging costs of credit cardCard linkEstablishment of rules standards and standard protocols for governing participation in their mesh topology advance of the brand of BankFormation of interchange fee structure allurement of assessment feesCollection of transaction feesCosts of expanding marketCosts of maintaining meshCost of taking different fraud reducing classsTECHNOLOGICAL occasion IN BANKING SECTORImprovements in the technological field have compete significant role in the growth of financial services industry as closely as in the growth of limited-purpose banks. There are some people who think that specializat ion in financial institution comes from improvements in technology.Banking sector is going to guide fully technology based. almost valuable reasons are the huge task conducted by business firms. Banks are giving consumer service and getting more consumers oriented such as ATM service, Internet Banking, SME Loan, Priority Banking and so on. Banks are now agonistical because of combination of banks and commerce. So they have to provide quick service such as check funding, quick withdrawal, fund move out, LC opening etc.For various purposes data-mining techniques are used in the financial industry. Credit scoring is the most mentionable congresswoman of the use. To produce a score to summarize a credit risk banks use statistical techniques and historical data as a credit scoring process. Credit scoring is a common form of speeding up credit decision to attract customers, and institutions use another efficient technique to identify their potential customers that is data-mining.In todays financial services industry electronic payment systems are important innovations having methods of transferring funds electronically. Because of having less physiological branches these banks rely on Automated Teller Machines to give opportunity to their customers to access their cash. It also provides advantage of accessing on the automated clearing house to transfer fund. Credit card banks can process the payments within short time and having no physical existence of branches because of the development of technology. This dramatically reduces the cost of credit card banks. This development benefitted the credit card card banks as well as customers.Credit card banks take the traditional notion of banking as challenge and they provide unique product mixes to draw considerable fear of the new customers. They also have unique business model to get competitive advantage Basel, June, 1996.BANKING technologyBanking KioskA unique feature of the Versa Banker is its draw off depo sit capability. It issues a receipt to deposit a cheque with a scanned image of the cheque. If a cheque is endorsed at the back position transaction report is generated for the department of MIS of the bank.Personal EnquiriesThe Versa banker allows you to check your account balance, score a mini statement and establish cheque book requests.Internet BankingConnect to the internet and carry out transactions through e-banking, with the tending of Versa Banker. It is asked by the bank to view details of ones account and after that to make transactions online.ATMTMs were originally developed as just cash dispensers they have evolved to include many other bank-related functions.ATMs include many functions which are not directly related to the management of ones own bank account, such asUpdatingpassbooksPaying routine bills, fees, and taxes (utilities, phone bills, social credential, ratified fees, taxes, etc.)Deposit currency recognition, acceptance, and recycling.Loading monetary v alue intostored value cardsPrintingbank statementsPurchasingConcert ticketsPostage stampsShopping mallgift certificatesLotteryticketsTrain ticketsMovie ticketsDonating to charitiesAdding pre-paidcell phonecredit. withdraw Processing ModuleGames and promotional featuresELECTRONIC FUNDS TRANSFERelectronic funds transferorEFTrefers to thecomputer-based systems used to performfinancial transactionselectronically.There is a number of different concepts that use this termA cardholder makes use of payment card invest depositpayroll payments for a business to its employees, possibly via apayroll services allianceDirect debitpayments from customer to business, where the transaction is initiated by the business with customer licenseElectronic bill paymentinonline banking, which may be delivered by EFT or paper checkWire transfervia an international banking network (generally carries a higher fee)Electronic Benefit TransferMICR CheckThe MICR stands for charismatic Ink Character Recognition.Th is technology is unique and uses magnetically chargeable ink and/or toner to print the special characters or numbers on the nookie of the checks.E-13BCMC-7United States of AmericaFranceCanadaSpainAustraliaUnited KingdomOther Mediterranean CountriesjapanSouth America (except Colombia)IndiaAfter printing, the documents are then processed mechanically and electronically through a reader-sorter machine.BANKS in BANGLADESH USING INFORMATION TECHNOLOGYThe two main technology based bank in Bangladesh are-Dutch Bangla Bank Ltd (DBBL)Eastern Bank Ltd (EBL)TECHNOLOGY USED BY DBBLDutch-Bangla Bank offers a complete electronic banking facility for your company a crook the c curlicue. most multi-nationals use this service because it is advanced, secure and affordable. DBBL creates a custom banking service to eccentric any business of any size. The services have a wide range that includes cash flow services, distribution banking and salary accounts. If a company knows what type of custom and ta ilored banking service they need, DBBL can provide it forthwith and at minimal cost (usually free of charge).For example for your starting point, DBBL has created Employee Banking program which allowsProviding employees with timely salary paymentsproceeding are properly logged for your easy rootageSeamless and error free distribution of salariesHighly secure way of distributing moneyLower manpower neededReduces cash theft and peculationNo cash at hand in the office, all cash finally distributed through the largest ATM network in BangladeshDEBIT / CREDIT CARDSDutch-Bangla Bank family, always believe that, as in everything else, you deserve the best in banking too. We are here to assist you 365 days round the clock through our Customer Care Center.Normal cards use a magnetic strip at the back of the card. The information and security on that magnetic strip is stationary and does not change. Hence it can be easily duplicated. But NexusEMVs processor uses its processor to fully digit ally lock all the information. It prevents the information from being copied as the processor generates security codes quite an than store it. It is a form of encryption. lucre BANKINGDBBL allows you to do seamless internet banking. This allows you to review your account, statements, paying bills as well as making some transactions. Because of local banking regulations, DBBL is not allowed to provide some types of transactions even though it is fully capable. Additional Internet Banking Features for Corporate BankingLetter of CreditBank GuaranteeLimits QuerySMS/MOBILE BANKINGDBBL pioneered Mobile Banking in Bangladesh. It was the first bank to offer banking facilties through a wide range of mobile phones. SMS (Short electronic messaging corpse) is an extremely unsecure method to do mobile banking.The mobile phone networks are unsecure and there is nothing DBBL can do but to take precautionary steps. To make the most of this unsecure scenario, DBBL issues you a mobile PIN number which is different from the DBBL pin number for your mobile transactions. Not under any great deal is the DBBL PIN number to be used in mobile banking. A different PIN number and a mobile transaction limit imposed by DBBL provide some security (but not all) over the unsecure phone network. Clients should be aware and cautious that although DBBL does its best, it cannot guarantee full security over a phone network it has no control over.EBL INTERNET BANKINGEBL Internet banking application more efficient than others bank and EBL foretelles the needs of individual as well as corporate account holders of EBL.List of TransactionsTransfers and Payments modes of EBLThere are different modes of transferring funds and customer can consider the modes he likes to transfer funds from selecting different modes. The user also has the even off to choose the source and destination accounts because it depends upon his rights.Utility flush Payment System of EBLThe customer can transfer funds fro m his accounts for making Utility Bill Payments to utility companies. The mode payment is as set up by the Bank.DepositsMaintaining DepositsThe user can view all the deposits maintained by the corporate.The customers are able to encash a deposit before its maturity.Session Summary of EBL bankingThe customer now able to view the transactions profiles performed in a session. shelter MECHANISMSEncryptionEncryption is the usual way to meet the data confidentiality requirements and although using a symmetric algorithmic program (symmetric or asymmetric) could be used, there are good reasons for using symmetric Financial times, November 8, 1996. sum AuthenticationA Message Authentication Code (MAC) is a cryptographic checksum, calculated using a symmetric algorithm, which is appended to a nitty-gritty and which can be verified by the recipient of the message. The use of MAC is one method of providing the integrity and enfranchisement services, but it is not appropriate for meeting the r equirements for no repudiation.Digital touchingA digital touch is a checksum, calculated using the buck private key of an asymmetric key pair, which is appended to a message and which can be verified by anyone with access to the corresponding public key. The digital signature is dependent on the complete message, so any change to the message will be detected. The real difference amid MAC and digital signature is that as well as providing integrity and authentication, the later also provide non-repudiation.Algorithms and Cryptographic MechanismsThe constraint linked with each cryptographic algorithm (computation resources, time to compute, key management, algorithm capability and design) limits their use for only a given number of security services. The following table lists the main security services and states whether RSA or DES (Data Encryption Standard) can address them Denny, 1998CONCLUSIONThe present status of e-banking is not satisfactory in courtship of virtual banking, c all center and SMS banking. But all banks under sketch have their connectivity with SWIFT channel. Major reason is that security concern. One study in Europe reported that there is 2.6% increase in system of Bank branches. That means that E-Banking is declining in Europe. The main concern is security. So, data confidentiality, integrity, create of origin, peer entity authentication, non-repudiation must be ensured. A few problems have been go through by the IT heads in the Banks such as withdrawal of money beyond the limit. This has taken place at ATM booths because there is agreement between Banks regarding networking. Barbara, 1997