Alternate Delivery Channels for Banks – Banking Awareness Notes

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Alternate Delivery Channels for Banks – Banking Awareness Notes
Introduction:
Due to various changes in the economy such as competition, technology, social/ economic environment, changes in needs/ outlook of customers, etc. the expectations of the customers have also increased much fold. Customers need anytime, anywhere, any mode banking which is very convenient and time saving for them. It resulted in banks slowly replacing the services provided by brick and mortar branches to alternative delivery channels.
The Need for Alternate Channels
The bank can increase business and profits depends upon their ability to retain the existing customers and increase the clients base steadily. The banks should have the policy to provide safe, secure, cost-effective and customer friendly products/ services so that the customer is delighted with the service of the bank.
Due to various changes in the economy such as competition, technology, social/ economic environment, changes in needs/ outlook of customers, etc. the expectations of the customers have also increased much fold. Customers need anytime, anywhere, any mode banking which is very convenient and time saving for them.
It has resulted in banks slowly replacing the services provided by brick and mortar branches to alternative delivery channels such as ATM, Internet Banking, Mobile Banking, Cash Deposit Machines, Pass book printing machines, etc.
The benefits to customers and banks from various alternate delivery channels are elaborate hereafter.
Benefits of Alternate Channels
The benefits to customers and banks from various alternate delivery channels are:
For Customers
(i) A very convenient, anytime, anywhere, any mode banking.
(ii) Saves time and cost.
For Banks
(i) The cost of operations of the transaction is reduced. The Cost of operations for the bank is lower in ATM banking when compared to manual banking, and it is still lower in Internet Banking when compared to ATM banking, and it is the lowest in Mobile Banking when compared to Internet Banking.
(ii)The footfall of the customers is reduced at the branches substantially thereby enabling the banks to attend to various business development issues.


Automated Teller Machine (ATM)
It is a computerised machine used for various purposes such as
(i) Withdrawal of cash
(ii) Balance enquiry
(iii) Mini statement
(iv) Card to card transfer
(v) Value added services like payment of insurance premium, payment for credit cards, utility bills, fee payment, mobile top up, etc.
It is operated by a magnetic plastic card with a personal identification Number (PIN). ATM services are provided by banks at their branch premises as also offsite for the convenience of the customers.
There are more than 1 lac ATMs in the country for the service of customers. Facility of withdrawal of cash is permitted from any bank ATM subject to the limit for the convenience of customers. ATM complaints are attended to promptly by banks. Thus ATMs play a major role in enhancing convenience to customers. Installation of ATM at rural centres helps in achievement of faster financial inclusion in rural areas.

Internet Banking (INB)
Internet Banking (INB) is a self-service channel through which customers can interact with the bank for transacting business andseeking information. It is a virtual bank in the hands of the customer through which he/she can perform most of the nostandard banking transactions at his/ her convenience without the need to visit the branch. Internet Banking removes the geographical and time restrictions for performing business transactions. This channel is available for individuals as also for corporates.
Internet Banking-Learners FundaCorporate internet banking has different models to suit the requirement of various corporates. While Bank has provided safety and security of the site, the customers are responsible for the transactions put through in their account as the ID and Passwords are known to them only, and there is no intervention of bank in these operations carried out by customers.

Mobile Banking Services (MBS)
It is a safe, secure and convenient banking, especially for young customers. It can use for
(i) Balance enquiry
(ii) Mini statement
(iii) Cheque book request
(iv) Fund transfer
(v) Bill payment
(vi) Mobile top up, etc.
It is a cost effective and a convenient mode of banking. It is a bank in the pocket of the customer. Bank offered Mobile Banking Service under GPRS, WAP, USSD and SMS channel.
To increase the adoption of Mobile Banking by customers, RBI has suggested banks that all new clients should registered for Mobile Banking Service at the time of opening Savings Bank/ Current Accounts. Banks have fixed transactions limits to the client for various Mobile Banking Service facility viz secured mode/ other mode based on RBI guidelines.

Mobi Cash
State Bank of India (SBI) has launched a new mobile based prepaid product to cater to the requirements of both customers and non-customers called Mobi Cash. Bank will issue mobile wallet to both clients and non-customers which are a virtual prepaid account accessible over mobile phones.
It can used for cash deposits, cash withdrawals, funds transfer, enquiry services, etc.

Other Delivery Channels and Complaint Management
Banks have also introduced
(i) Cash Deposit Machines
(ii) POS machines
(iii) Bar code Passbook
(iv) Printing machines
(v) Drop box, etc., for the convenience of customers.
‘Complaint Management System’ (CMS) has also been put in place to redress the complaints relating to various alternate channels received from customers swiftly and to their satisfaction. In fact, banks have developed standardized templates (for the convenience of the customers) for different types of complaints. These will enable the banks to deal with the complaints much faster and resolve them quickly to the satisfaction of the customers.