Mobile, Internet Banking Culture Taking Root
Individuals and businesses, including startups, are benefiting from online banking, but the doors to new opportunities have yet to fully open.
Internet and
cell phone banking help companies and businesses get instant access to bank
accounts, conduct business-to-business (B2B) and online transactions.
From airlines,
utilities, mutual funds, super food outlets, insurance companies and fertilizer
and steel and chemical manufacturing facilities, there is hardly any corporate
segment that remains untouched by mobile and internet banking.
The potential
of online banking in revolutionizing corporate and business culture has only
partially been tapped
From retail
superstores to distributors’ networks to tech-start-ups selling services online
to on-call cab companies, there is a long list of businesses that routinely
conduct bank transactions through internet and smartphones.
Starts-ups are
also using online banking for reaching out to new customers, making online
payments to individual and group suppliers of goods or services and
transferring funds to and from partners’-employees’ accounts.
A large part of
this entire scenario has developed in less than a decade following penetration
of the internet and cell phone culture and backed by banks’ willingness to make
technology work for them and their clients.
However, the
potential of online banking in revolutionizing corporate and business culture
has only partially been tapped, corporate executives and businessmen say.
Key challenges
like cyber security, banks’ ability to measure up to changing business
expectations using online banking, poor performance of government-to-business
(G2B) transactions, and a lack of trained bankers to handle online banking
complaints and regulatory bottlenecks, need immediate attention.
Regulatory
complexities affecting payment system operators are also cited as one of the
impediments to faster growth of the online payment system. But central bankers
say that as the regulations related to payment card security come into force
from January 1, 2017 all such complexities, real or perceived, would come to an
end.
As financial
integration under the China-Pakistan Economic Corridor has started emerging,
online banking has assumed additional importance and the sooner we resolve the
issues related to it the better it is, bankers admit.
In private
talks, most of them agree to businesses’ concerns regarding the quality of
online banking and hold a structural flaw in harnessing and maintaining a
talent pool of sufficiently qualified IT experts as one major source of many
these concerns.
“Our IT
workforce in the country is scattered, with the best part of it inclined to
find jobs overseas or to run their own businesses with the average and
below-average part actually available for employment, not only in banks but
elsewhere in the corporate sector,” laments head of IT operations of a large
local bank.
Most issues in
online banking, from attempted breach of cyber security of businesses’ accounts
to failures in ensuring real-time online transactions in the exact sense of the
word keep popping up due to compromised handling by not-so-fit IT professionals
and their supervising bankers.
“Besides, banks’
guidance and facilitation services to clients of online banking are not
well-integrated,” complains a local textile miller. Young boys and girls hired
by many banks for this purpose are not their regular employees and are
low-paid. They are also not empowered enough to locate the origin of the
problems that a client faces and then tell them exactly when or how his
complaint could be addressed.
“This lack of
first class customer facilitation is also acting as a dampener to horizontal
growth of online banking. It might not affect the growth numbers (of online
banking) but it flashes in the minds of those as yet-another-reason to not
avail online banking services.”
In FY16,
internet banking transactions grew to 1.9m the value of which was Rs880bn, up
from1.8m transactions with a value of Rs798bn in FY15. Banking transaction made
via cell phone banking (excluding branchless banking) reached 6.6m in FY16 with
their value at Rs112bn. In FY15, the number of such transactions was 6.1m
valuing Rs107bn.
Whereas growth
in internet banking is attributable to a wider range of movements in
businesses’ and individuals’ accounts, increase in cell phone transactions is
more due to the growing trend of utility bills’ payments via smart phones,
bankers say.
They say tech
start-ups in particular and small and medium businesses being set up by younger
people in general have a greater reliance on the internet both for running
their businesses as well as for meeting their banking needs.
Among
individuals, the trend to make domestic remittances through internet and cell
phone transactions is growing and a number of university students also pay
their fees and transfer money to friends and relatives on-line.
“The growth rate
(of internet and mobile phone banking) can easily be accelerated if the
feedback from customers is given due weight and banks modify and improve their
systems accordingly,” says the director of an IT firm that also exports its
software and applications.
“Based on my
experience I can say that banks focus less on market research and rely more on
marketing skills,” he says pointing out that most banks don’t make realistic
projections of how internet and cell phone banking would shape up in next few
years.
“Such
projections can give them a fair idea of which areas of online banking they
must focus on now and what kind of exact IT professionals’ expertise they might
need in near future.”
Reference: Published
in The Daily Dawn,, December 26th, 2016.
