Alternate Channels of Banking of Standard Chartered Bank

Alternate Channels of Banking of
Standard Chartered Bank

In the constantly changing world of today, where past is being replaced by dynamic present and the dynamic present is being replaced by more challenging future, the old ways of doing things is no longer valid. Change is permanent and a reality. Science and technology is changing the way financial institutions perform their transactions. Gone are those days of formal banking. Today’s banks are shaking by these technological changes and embracing newer ways of branchless banking or alternate channels of banking.

Alternate channel of banking commonly known as, electronic banking (E- banking) is the waves of the future. It provides enormous benefits to consumers in terms of case and cost of transactions, either through internet, telephone or other electronic delivery channels. For many consumers, electronic banking means 24-hours access to cash through an Automated Teller Machine (ATM) or Direct Deposit of pay cheques into checking or savings accounts. But electronic banking now involves many different types of transactions. E-banking is a form of banking where funds are transferred through an exchange of electronic signals between financial institution, rather than exchange of cash, cheque or other negotiable instruments. With the expansion of global Information and Communication Technology (ICT) infrastructure and the internet, e-banking is set to play a pivotal role in the national economy, proper software, infrastructure and skilled manpower are important for the implementation of e-banking in the country. In Bangladesh, several banks are offering alternate channels of banking. Having been considered Standard Chartered Bank is one of few banks which offer a comprehensive set of benefits and services to keep customers satisfied with their banking experience. The bank is not only the leading foreign bank of the country but also one of the few banks that have revolutionized the banking service industry through adoption of modern technology and process with a view to enhancing customer satisfaction. Digital banking Services is one of such technological advancements which are comprised of ATMs, CDMs, SMS banking and Online banking etc.

This paper centers on “The Alternate Channels of Banking of Standard Chartered Bank”.

Introduction

The banking system in Bangladesh has gradually adopted international standard of services for its customers. Banks have introduced a lot of new products during the last few years.

Despite burden of expenditure, most of the banks have gone online, installed core banking solution, central accounting solution, reconciliation procedure solutions etc. step by step during the last few years. They have trained their IT personnel as well as general staff/officers to cope with the technology-based modern banking procedure. Most of the banks have taken care to improve customer services for attracting more customers. Every year, many of the banks are opening new branches, installing automated teller machine (ATMs), point of sales (POS), KIOSKs etc. to enhance financial inclusion and expand business as well.

Internet banking is growing popular day by day in Bangladesh. A number of private as well as local banks are going online now considering the demand and necessity of fast banking. Internet banking not only provides banking facility round the clock but also helps a country to get attached to the international economy as well as business. People throughout the world are now getting engaged with more activity and business and hence need the fast and anytime access to his/her bank account. Internet banking also facilitates buying and selling various products which varies country to country. In Bangladesh many banks have launched Internet Banking. Some are known as online banking, some are Internet Banking, providing various range of facilities. Standard Chartered Bank(SCB)’s online banking services entail 24/7 account check, statement request ( printed statements delivered to customers address in 3 working days), cheque book request, interbank and intra bank fund transfer and bill payment ( credit card, mobile phone , internet and insurance payment). As the world economy is growing faster and banking sector is making mark each and every day, Digital banking is very important and effective to be a part of it. Bangladesh just started its journey in internet banking and banks are coming forward to make it a success. Online banking is clearly a huge benefit for the customers and saves a lot of time and things get done so easily. A developing country like Bangladesh can make the best out of Internet Banking and banks are completely into it.

The provision of financial services via mobile phones is mobile banking. It is a popular alternative delivery channel. Mobile banking supports payment transactions including money transfers and in some cases utility bill payments. Because in Bangladesh mobile penetration is growing faster than the penetration of financial services, mobile banking is a way to decrease location gap and increase financial inclusion. SCBs SMS Banking is a service which provides the customers with 24-hour access to their key financial information of their Standard Chartered Credit Card and Account through Push and Pull services to ascertain better security and enjoy greater convenience .

Other branchless banking services comprise of ATM & CDM and point of sale (POS) terminals serve to deliver a set of banking services and are part of the banks distribution channels. SCB has 87 ATMs and 7 KIOSKs all over Bangladesh catering the customers banking needs (cash withdrawal, deposits fund transfer and etc).

Aiming at the speedy financial inclusion of rural people, Bangladesh Bank (BB) intends to provide banks and other related organizations more support to expand branchless banking. The central bank is supporting banks and some other financial institutions to operate branchless services to cater to the major banking need of rural and urban people. With technological advancements, including expansion of mobile phone coverage, Bangladesh Bank Governor Atiur Rahman mentioned “effective partnerships among banks and technology service providers would make branchless banking or alternate channels of banking a great success.”

Objective of the report

The main objective of this project was to gain an insight about, the alternate channels of banking of Standard Chartered Bank (SCB) and assess the effectiveness of the ‘Digital Ambassador’ program. Following this objective the highlights of the study were as follows;

• To study – Alternate Channels of banking of SCB.
• To study about the program ‘Digital Ambassador’.
• To study the banking services catered by the Alternate channels of banking of SCB.
• To determine the limitations of alternate channels of banking through the Digital Ambassador program.
• To suggest possible ways to overcome the limitations and make it a success.

Methodology

In order to prepare this report, information was collected from both primary and secondary sources.

Primary Sources: Employee of Standard Chartered Bank who work in Remote banking division, provided with the information about Standard Chartered Digital banking service. Furthermore being in attachment with two branches and working closely with the customers gave me the clear understanding about their opinion and outlook about SCBs Digital banking and ways for its improvement.

Secondary Sources: Some data was collected from various manuals, articles, annual reports and SCB’s website.

E- Banking products and services

E-Banking products and services can include wholesale products for corporate customers as well as retail for individual customers. Ultimately, the products and services obtained through internet banking may mirror products and services offered through other bank delivery channels. A brief description of the products and services is given below:

 Automated Teller Machine (ATM)

An ATM machine is a cash machine, cash point, cash line is a computerized telecommunications device that enables the clients of a financial institution to perform financial transaction without the need for a cashier, human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic strip or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date. Authentication is provided by the customer entering a personal identification number (PIN). Using an ATM, customers can access their bank accounts in order to make cash withdrawals, debit card cash advances, and check their account balances.

 Debit Card

An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This removes the need for bank clients to go to the bank to remove cash from their account as they can now just go to an ATM or pay electronically at merchant locations. This type of card, as a form of payment, also removes the need for checks as the debit card immediately transfers money from the client’s account to the business account.

 Credit Card

A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user’s account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user). It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to ‘revolve’ their balance, at the cost of having interest charged.

 Point of sale (POS)

POS is an abbreviation for point of sale (or point-of-sale, or point of service). This can mean a retail shop, a checkout counter in a shop, or a variable location where a transaction occurs in this type of environment. Additionally, point of sale sometimes refers to the electronic cash register system being used in an establishment. Point of sale systems are used in restaurants, hotels, stadiums, casinos, as well as retail environments in short, if something can be sold, it can be sold where a point of sale system is in use and further facilitate financial transaction.

 Phone Banking

Telephone banking is a service provided by a bank or other financial institution that enables customers to perform financial transaction over the telephone, without the need to visit a ban branch or automated teller machine. Telephone banking times can be longer than branch opening times, and some financial institutions offer the service on a 24 hour basis. From the bank’s point of view, telephone banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions.

 Corporate Automated Clearing House

The Automated Clearing House (ACH) is an electronic network for financial transactions. ACH processes large volumes of both credit and debit transactions which are originated in batches. Other retail products and services may include Balance inquiry, Funds transfer, Downloading transaction information, Bill presentment and payment, and other value-added services.

Online banking

Online banking allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution. To access a financial institution’s online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password for customer verification. The password for online banking is normally not the same as for telephone banking. The customer can link all accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts under one online banking id. To access online banking, the customer would go to the financial institution’s website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted.

SMS banking

SMS banking is a type of mobile banking, a technology-enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging.

Growth in E- banking in Bangladesh

Numerous factors including competitive cost, customer service, and demographic considerations are motivating banks to evaluate their technology and assess their electronic commerce and Internet banking strategies. Many researchers expect rapid growth in customers using online banking products and services. Studies show that competitive pressure is the chief driving force behind increasing use of Internet banking technology, ranking ahead of cost reduction and revenue enhancement, adding more to it. Banks see Internet banking as a way to keep existing customers and attract new ones to the bank. Banks can deliver banking services on the Internet at transaction costs far lower than traditional brick-and-mortar branches. Banks have significant reasons to develop the technologies that will help them deliver banking products and services by the most cost-effective channels which is depicted by the increased level of participation by both the local and foreign banks currently in Bangladesh.

Standard chartered Bank in Bangladesh

The Chartered Bank opened its operation in Chittagong in 1947 that was, at that time the eastern region of the newly created Pakistan. The branch opened mainly to facilitate the post war re-establishment and expansion in South East Asia. The bank opened its first branch in Dhaka in 1966 and shifted its headquarter from Chittagong to Dhaka after the birth of the Republic of Bangladesh in 1971 the bank increasingly invested in people, technology and premises as its business grew in relation to the country’s thriving economy.

As of today Standard Chartered Bank is the oldest and largest foreign bank in Bangladesh with its 26 Branches, 57 ATMs and 7 Financial Kiosks; employing over 1,300 people. It has its presence in 6 cities – Dhaka, Chittagong, Khulna, Sylhet, Bogra and Narayanganj; including the country’s only offshore banking units inside Dhaka Export Processing Zone (DEPZ) at Savar and Chittagong Export Processing Zone (CEPZ). Its brand promise is ‘Here for good’, and is the essence of who they are. It’s about sticking to their clients and customers through good times and bad times and always trying to do the right thing.

The acquisitions of Grindlays bank (in 2000) and the commercial banking business of American Express Bank in Bangladesh (in 2006) are reflections of the Bank’s increasing commitment to this country. The countries Chief Executive Officer is Jim McCabe. The bank increasingly invested in people, technology and premises as its business grew in relation to the country’s thriving economy. Standard Chartered Bank currently provides both Consumer Banking and Wholesale Banking Services, ranging from Personal & Corporate Banking to Institutional Banking, Treasury and Custodial services. It is a leading price player in treasury instruments and foreign currencies and pioneer in Consumer Banking.

Its extensive knowledge of the market and essential expertise in a wide range of financial services underline its strength to build business opportunities for corporate and institutional clients in Bangladesh. Continuous upgrading of technology and control systems has enabled the bank to offer new and improved services such as Phone banking, I-banking, e-Lending and etc.

The consumers banking experience is taken to another level with the following banking service.

• Personal Banking entails Savings account, loans, Mortgages, credit Cards, Insurance, Investments and employee banking cater the consumer’s changing financial needs.
• Wholesale Banking include Transaction banking, Financial Markets, Corporate finance and Principle Finance which provide solutions to corporate and institutional clients to give them access to some of the fastest growing markets and trade corridors.
• Saadiq Banking comprises a range of Shariah-compliant services and rewards that are tailored to meet different values of consumers and comply to Islamic Banking.
• SME Banking offer solutions that address your specific business needs such as managing your working capital, aiding business expansion, business protection or increasing your yield.
• Remote Banking (Digital banking) entails Online Banking, SMS Banking , e Statement , ATM and CDM which increases the consumers convenience and makes banking possible anywhere at every time. In addition to contributing to economic growth through Standard Chartered, Bank’s core business activities, have a broader positive impact on the communities in our markets; the bank is committed globally to uphold high standards of Corporate Social Responsibility. There are numerous ways they are striving to be a force for good; globally as well as in Bangladesh.
• With the project ‘Seeing is Believing’, Standard Chartered helps restore eyesight of the underprivileged.
• With the program ‘Living with HIV’ they help educate not only their staff but the youth in their communities about HIV and its prevention.
• Programs such as ‘Governor Scholarship’ and ‘Standard Chartered School Chess Tournament ‘centers on development of youth through education scholarships and sports sponsorships.
• Paperless eBPC launched in Bangladesh June 2012 Standard Chartered Group’s eBCP system went live in Bangladesh on World Environment Day. Designed and developed with the help of user experience and feedback from our key international markets, this system minimizes the need for paper based Business Continuity Planning approvals through digitization and automation – archival and repository services included– and saving paper globally.

Bangladesh is now among the few countries to adopt eBCP in the Standard Chartered Group, saving around 10,000 pages annually – equivalent to one tree each year. Standard Chartered, Bank has been renowned for its exemplary work in the field of CSR through – Financial Express Corporate Social Responsibility Award. And they encourage all corporate bodies in Bangladesh to uphold high standards of social responsibility. They believe that Standard Chartered has been a partner in progress for the nation and its people. Standard Chartered is committed to be here for people, here for progress, and here for the long run – Here for good.

SWOT Analysis of Standard Chartered Bank

Strength

1. SCB is much renowned for its banking experience which further consequence in it holding the leading position in banking sector of Bangladesh. It is their banking experience that results in SCB having strong brand equity among their wide customer base.

Following are the achievements of SCB for their Banking experience in recent past:

• ‘Best Bank’ for Corporate Social Responsibility for 2006 by Bankers’ Forum
• ‘Best Retail Bank in Bangladesh’ award in The Asian Banker Excellence in Retail Financial Services programme for its performance in 2007
• ‘National Best Corporate’ Award 2007 by Institute of Cost Management Accountants
• “Best Foreign Commercial Bank in Bangladesh” by FianaceAsia in 2009 & 2010
• Excellence in Retail Financial Services Awards 2012:Best Retail Bank in Bangladesh

2. Standard Chartered Bank is a leading foreign bank in Bangladesh bringing in the for the first time and positioned as the pioneer for launching money link ATM card, credit card and Internet banking . The first ATM brought in Bangladesh by Standard Chartered Bank in 1995 and was installed & maintained by LEADS Corporation Ltd. In the year 2004 the SCB launched internet banking for the first time in Bangladesh and was awarded World’s Best Internet Bank 2013 award this year.

By grabbing the opportunity that exists in the market SCB, as the market leader, showed the most substantial corporate strength among the foreign banks. SCB being leading multinational bank in this country was always keen to develop long-term beneficial relationship with trustworthy clients. To achieve to this end they have always upgraded their approaches to portability.

3. Standard Chartered Bank (SCB) has a bulk of qualified, experienced and dedicated human resources which acts as their major strength to help it reach the leading position in the market as multinational banks leaving others banks behind in the context of Bangladesh. In recent past SCB got awarded as the Best Employer of IBA Graduates’ in 2008 by IBA Alumni Association.
4. SCB’s dedication is supreme in providing round the clock service to their customers. In response towards their continuous effort to improve customer experience, the Bank launched its Contact Centre; The Contact Centre has lead to a change both in terms of system capabilities and customer experience. Their Contact Centre is designed to provide ‘one stop solution’ for our customer’s banking needs – any day any time! Customers are welcome to call the Contact Centre by dialing 16233 through any mobile phone and (88-02) 8957272 or (88-02) 8332272 to avail following services 24/7:

• Access IVR using Banking Account Number, Credit Card Number or Debit Card Number
• Activate your Card (Debit/Credit)
• Self-generated password for Debit Card
• Enrolment for Online Banking, SMS and e-Statement

5. In order to exude innovativeness and creativeness, SCB tries its best to come up with customers’ banking problems and solve them. They value their customer’s time, which is why they came up with solutions such as Evening Banking, Saturday Banking and Digital banking facility for their clients.

Weakness

1. Other local and foreign banks such as HSBC, City Bank, BRAC Bank and etc , are offering better prospects, resulted in the customers switching to them as SCB offers low deposit rates and has set the minimum balances too high. Furthermore, long waiting cues, moderate customer service, non-functioning ATM machines and outrageously high charges lead to SCB being noted for these weaknesses as well. As a result, a large amount of customers have ceased transactions with the bank.
2. The banking industry has become considerably monopolistic and hence SCB is starting to lose its market share to its rivals due to low barriers to entry, and the local banks’ increasing aggressiveness
3. Customers face difficulties regarding the system of collection and disbursement of cash using ATM & CDM. Many customers do not have the proper knowledge of the process of depositing and withdrawing money using ATM and CDMs. The bank does not take many steps to assist the customers either. The system of withdrawal and deposit may be new and different from the system the customers have come across at local bank. Many of these customers or people they send to the bank on their behalf are not educated and hence they face difficulty in the system of deposit or withdrawal. For instance, money being deposited to wrong account no. which consequences in further hassle.
4. The fees and charges applicable to the accounts on not being properly explained create a negative impact on customer and probe them to term SCB popular for hidden charges.

Opportunity

1. In recent past Islamic banking has emerged a prominent and potential segment of the global financial banking industry. As a moderate Muslim country, Bangladesh has become a potential market for Islamic banking. For this reason, most of the conventional banks of the country are utilizing this opportunity and launched Islamic banking services in their product line. Standard Chartered, the leading multinational bank of the world, has also utilized this opportunity. With the objective to grow market share and to cater the Islamic minded customers’ shariah based Islamic banking was launched at Standard Chartered Bangladesh in December 2004.
2. SCB has rigorous credit screening policy and to some extent it is over conservative. By freeing their credit screening policy a little, they may be able to pursue many opportunist business ventures. SCB also has a good consumer base that maintains several accounts at once. SCB has the opportunity to keep these customers by reducing its current fees and charges and positioning attractively in middle class segment.
3. More Branches around Dhaka specially and all over Bangladesh will enable SCB to capture more market share, and hold a stronger competition against local banks. There is whole lot of potential customers with the continuously increasing population of Bangladesh who are continuously leaning to adaptation of consumer finance. As the bulk population is middle class, different type of products has large and pregnable market.
4. By offering more attractive interest rates, and lowering the minimum balances eligible for interest, the bank can attract a lot of the old customers who have strewn away to other banks as well as new customers.
5. Digital banking prove to be an efficient way to tap into new markets and prove to be more economical complying to click and brick system (Bricks and clicks is a business model by which a company integrates both offline and online presences) other than brick and mortar system (Bricks and mortar is a business model which a only has a physical presences) of ecommerce.

Threats

1. Increased competition by other foreign banks is a threat to SCB. At present HSBC and CITI Corp are posing significant threats to SCB regarding retail and business banking respectively. Furthermore, the new comers in private sector such as Prime Bank, Dutch Bangla Bank, EXIM Bank, BRAC Bank, Southeast Bank, Mercantile Bank, Social Investment Bank, Islami Bank and Bank Asia are also coming up with very competitive products. With customers shifting to these banks, SCB’s profits, as well as market share is posed to threats from these local banks in respect to consumer banking.
2. In today’s economy, substantial amount of savings is remaining idle. Currently foreign direct investment in the country is high despite of disrupted political situation adding almost nothing good to the current economic situations of the country which further indicate political threats.

Security measures of Standard Chartered Online Banking

Standard Chartered has adopted comprehensive security measures to safeguard your use of Standard Chartered Online Banking which is known as 2 factor authentication which comprises the Customer self generated password and electronic authorization code (e-tac) generation. The etac has to be generated which would be delivered in the customer mobile via an SMS which need to confirmed in that point of time to complete any transaction. Customers account can only be accessed with their self generated unique Username and Login Password.

All information transmitted through the Internet, including customer’s Username, Password, account information and transaction details, from the moment of logging-in to the moment logging-out, are protected by strong end-to-end encryption. Furthermore to prevent unauthorized access at the PC while it is not attended, the bank has implemented an automatic time-out feature. The system automatically will time-out if there are no screen page changes for 15 minutes. Customer’s Username and password must therefore be re-entered should you wish to continue using Standard Chartered Online Banking.

SMS Banking

SMS Banking is a service which provides the customers with 24-hour access to their key financial information of their Standard Chartered Credit Card or Account through Push and Pull services to ascertain better security.

• SMS banking push services entails SMS alerts on financial transactions (ATM withdrawal: BDT 20,000 and above | POS: BDT 3000 and above | Branch withdrawal: BDT 100000 and above | Deposits Machine: Any amount).
• SMS alert (push service) on Salary deposit in the Employee Banking account.
• SMS banking pull services include the customer’s request for account information, balance enquiry and transaction history for their banking account or outstanding balance and mini statement for their credit card just via a SMS.

Eligibility criteria:

To register for online banking the customer has to be

• Individual account holder
• Accounts having operational authority ( singly or either or survivor
• Credit card holders
• Only one mobile number can be tagged with one customer for all the products.
• Mobile number needs to be stored/ updated in the core banking system in MOB field.

Registration and activation

Customers may register for Standard Chartered SMS banking by filling up forms that are provided in the branches or calling to our contact centre at the following numbers for placing the request.

• 16233 (from your mobile phone)
• (+88) 09666777111
• (+88) 8957272
• (+88) 8332272

After enrollment the customers would receive two SMS the first one saying “Welcome to Standard Chartered SMS Banking system” and the second one would request the customer to type RGBD space customer’s self generated desired 4 digit pin and send to 2727. This would complete their registration procedure and onwards this 4 digit pin can be used to request for following pull services.

eStatements

eStatements are electronic statements made available on Online to be viewed/downloaded. eStatement consists the same information as the paper statements and complies to Green Banking concept. The eStatement is delivered to customers via an email as per their email address in the banks record and to ensure their financial confidentiality the statement is password protected. The hint about the password is provided in the email and it is a combination of the customers known information.

Eligibility criteria

Account holders who can provide email address where the statement can be sent. Customers who have not enrolled for e statements can apply through branch (forms) r by calling at the contact centers in the following numbers

• 16233 (from your mobile phone)
• (+88) 09666777111
• (+88) 8957272
• (+88) 8332272

On successful registration customers would receive a welcome email in their recorded email address. This service is offered for free. eStatement service is available for banking account and credit card. The statements can be viewed or downloaded in word and PDF format. Email Alert is a service that will notify the customers by an email via their registered email address when their eStatement is delivered.

SWOT analysis of Digital banking

Strength:

• Physical resources such as locations of ATM & CDM and financial kiosk. SCB has 90 and 40 ATM and CDM respectively located in major areas of the cities provides coverage to a large sphere of customer base to cater their banking needs.
• Replacing paper statements with eStatements or electronic statements is an eco friendly concept of digital banking complying with green banking further more acting as a cost saving measure. Standard Chartered Group’s eBCP system went live in Bangladesh on World Environment Day. Designed and developed with the help of user experience and feedback from our key international markets, this system minimizes the need for paper based Business Continuity Planning approvals through digitization and automation – archival and repository services included– and saving paper globally. Bangladesh is now among the few countries to adopt eBCP in the Standard Chartered Group, saving around 10,000 pages annually – equivalent to one tree each year.
• Convenience is the main reason why majority people set out to incorporate online banking into their lifestyle. Electronic banking not only allows one to move money around with ease, but also makes it possible to check one’s balance on the fly. Financial transactions and account checking are just clicks away with internet and SMS banking. And time and location act no more as boundaries with the ATMs and CDMs located at wide a span.
• This revolutionary change in banking industry of moving out from the conventional ways of branch banking and adapting to new ways of branch less banking. The popularity of electronic banking can actually be seen as just one more reason to embrace it even faster. SCBs Digital banking complies with the concept of digital Bangladesh and them being the pioneer in launching ATMs and credit card shows its effort to place strong foot prints incase of alternate channels of banking as well.
• Digital bnking offers a customer more than one method of retrieving financial information about their banking accounts and cards.
• Diversity helps to capture different types of market. Host of services provided by various E- banking products such s ATM ,ACD Online banking and SMS Banking
• Digital banking results in cost saving. Online banking is the practice of making bank transactions or paying bills via the Internet on a secure website. And machines such as ATM and CDM further more allows the customers to make deposits, withdrawals and pay bills. SCB emphasized to make the easiest way to help environment by eliminating paper waste, saving gas and carbon emission, reducing printing costs and postage expenses.
• Increased speed and efficiency centering transactions due to automation. Sometimes you need to move your money in a quick and efficient manner. Depending upon the situation, transactions can actually take up to few working days. With electronic banking services, however, transactions can be completed on the fly and in real-time.
• Increased accuracy and security of banking transaction. Online banking: Online banking provides secured and easy, real-time transfers, online bill payment and other convenient features. One can bank anywhere, anytime with greater financial confidentiality and security. In case of transfer or bill payment one has to generate an etac (electronic transaction authentication code) which would have to confirm then and there by the user himself to complete the transaction. Furthermore there is two factor authorizations of which the first is the customers self generated pass word and the second is the etac. SMS banking: get an SMS confirmation on your banking transaction. eStaements: receive password protected statements.
• SCB has most recently launched a smart phone application Breeze Balance. In today’s digital age, there are customers who want to check their accounts in a flash. Breeze Balance provides the exact solution. Breeze Balance is designed with simplicity and convenience of customers in mind. There is no need of having to remember complex SMS messaging or logging into Online/Mobile banking, all that is required is a onetime setup and customers can perform a balance enquiry anywhere, anytime

Weakness:

• In case of online banking customers need to have internet access and be computer literate. In the context of Bangladesh only minor range access to the internet at home – that leaves majority people without access.
• Customers are much worried about security issues, e.g. what if someone gets their bank details and withdraws their money?
• Certain consumers have a high resistance to change. Doing things at a branch, face to face with an expert bank teller to help, seem less stressful to them in comparison to the following :

Having to enter some long numbers and complicated details to make a payment,

Concerned whether the payment would end up going to the right place.

Concerned whether the transaction is performed in a right manner e.g. did I enter the right details?

• Customers are comfortable in seeing the person who they are dealing with. When you go the bank they will be greeted by friendly, well-trained staff. There is no such personal contact if they have used the online service. Example: If the customer encounters problems to sort them out, then it is much easier for them to explain the problem face to face rather than having to use email or telephone.
• Cost issues for the bank: it cost 800,000 and 350,000 for the implementation of the ATM and CDM respectively so setting a kiosk is expensive for the bank. Furthermore these sophisticated machines a high maintenance charge as well and in addition to this the maintenance needs to be done with people specialized in that field these stand as a limitation to the bank.
• Though Breeze Balance is a onetime setup and customers can perform a SMS banking request anywhere, anytime. It is a Smartphone application which can either be downloaded from app store for Apple users or android market for android phone users. In Bangladesh the percentage of Smartphone users are still very low.

Opportunity:

• Consumer needs are readily changing and every change would pose SCB with a new opportunity which if fulfilled would lead to greater popularity and customer satisfaction for its Digital Banking services. Example: customer mentioned that it would have been easier for them if bill payment (utility) was possible using credit through online banking.
• SCB s online banking transaction is only limited to fund transfer and bill payment if they can incorporate e-shopping or internet shopping it would help them gain more customer acceptance. Through e-shopping the customer s can be provided with a convenient and cost effective way of making transaction and buying products and services online.
• Vendor acquisition can provide an opportunity to SCB to provide their customers with greater convenience. For example using SCB online banking customer can pay fees for Scholastica School so they can provide their customer with a other options if they incorporate other schools like Mastermind, Aga khan, Sunbeams and etc.

Threats:

• Increased competition by other foreign and local banks poses a threat to SCB. At present HSBC, Prime Bank, Dutch Bangla Bank, EXIM Bank, BRAC Bank, and etc are all coming up with very competitive digital banking products. SCB’s in order to sustain their popularity have to work hard to always stay one step ahead of others.
• Continual changing technology stands as a constant threat. Coping with the changing technology is expensive but if they are not par with the technological advancement their product would be obsolete to the customers. It is essential to update technologies and remain cost effective and customer friendly.
• Hacking, a pose a threat to internet banking. Electronic banking is considered by most banks and individuals to be safe. But nothing is absolute when it comes to fraud; especially when the Internet is involved. Thus, those who are looking for a safe and secure banking environment may want to avoid electronic banking, as there is always the chance that fraud might occur. At times customers are much worried that what if somebody gain access to their account and leave damage behind.
• Certain no. of customers avoid using plastic money such as debit cards and credit cards despite of its benefits and convenience as they are more concerned about the fraudulent activities occurring with ATMs and POS. Which consequences in lower customer acceptance of digital banking.
• Online banking pose reputational risks for the banks. In case the bank fails to provide secured and trouble free-banking services, this will cause a bad reputation on the customers mind and may result in the bank losing some of its customers.

Findings and recommendations:

The digital ambassador program is going of be run for a total of 6 month period. In the later months the customer enrollment would have a decreasing pattern as by then maximum no. of customer would have already enrolled for the digital banking services. Digital banking products being automated pose a difficulty to the consumers in using them which should be dealt with enough seriousness and the live demonstration of the products is the key issue to be focused. A person can be designated to each of the branches to provide live demonstration of the online banking products and further more assist the consumer with the ATM and CDM machine on a permanent basis. The customers who are skeptic in nature and reluctant to accept the branch less banking, live demonstration can be helpful to make them use the alternate channels of banking. With live demonstration and acknowledging customers of digital banking would definitely increase the number of customer enrollment but to increase the usage a continuous force has to be incorporated to make the customers get habituated to use the digital banking products. E.g. the customer in the branches is requested to use CDM machine for bill payment or making deposits of less than 50000 and credit card bill payment of any amount. Educating the customers about the products would add no value if they do not use it. SCB can increase both the no. of user and no. of usage by adding more vendors’ for the bill payment service of online banking. For example under bill payment service of online banking the fees for scholastic can be paid so SCB can addd more vendors like Mastermind, Sunbeams, Aga Khan and etc. More over if they can incorporate online shopping in online that would increase customer interest and participation and help SCB gain a strong foothold against its competitors. Breeze balance would take SMS banking to another level by resulting in more convenience and acceptance. It is a one stop solution once installed in a mobile phone all the banking request is at finger tip.

The Digital ambassadors have made “Digital ambassador” program a success , all its objective of creating awareness of digital channels, increasing penetration into digital channels and migrating channel/transactions are well met. If SCB always stay in balance with the technological advancement and can come up with more services in response to the customer requirements they can make most out of digital banking.

Conclusion

Banks are beginning to treat digital channels as mainstream options rather than alternative mechanisms for customer service. IT heads at banks are focusing on strengthening these channels to sell financial products and acquire customers.

For banks nowadays, expansion no longer means adding branches. The banks are stepping into the digital era where banks are investing in technologies to reach out to customers through a variety of digital channels including ATMs, kiosks, online portals and mobile apps and sites.

Digital platforms are critical for banks as a staggering volume and frequency of daily transactions are executed electronically. Digitization will lead to an overall reduction of operational costs and transactional overheads. Front-end transformation solutions ranging from customer interaction management right up to channel innovation put the customer in the driver’s seat, enabling the bank to grow its customer base and offer an enhanced portfolio of tailored services. Technology results in sustainability and continuity in the progressive amelioration of service quality, anytime and anywhere banking, focused product delivery, cross-selling and multi-channel touch points.

Services like distance banking, branch free banking, virtual banking, etc. have started to come into play. In banks of Bangladesh, across the spectrum, have also begun taking initiatives to enhance the services covering these areas.

ATMs have established themselves in Bangladesh in the since 1995. In some other parts of the world, ATMs are ready for the leap to a new form of Video Teller Machine, a remote banking system that allows bank customers to complete sophisticated transactions remotely through online consultation with an expert from the bank. These systems integrate videoconferencing technology, document scanners, card readers and printers to support rich communication between the customer and the specialist.

According to Adnan kabir, Senior manager – Digital Banking, Standard Chartered Bank, Internet banking, given that it has been there for over 7 years now, is by far the most mature among the new channels and is already an important channel for customer service with over 10% of all of SCB’s transactions being conducted though online channels on a monthly average basis. SCB  launched online banking in the year 2004. The no. of customers using online banking is amounted 55000 in 2004 which gradually increased to 110, 0000 till 2012.

The online channel had grown from an alternate channel to the largest originator of customer initiated transactions over the past few years simultaneously mobile usage has also boomed in the last few years and the bank expected that the penetration of data plans would drive usage further. Accordingly, it has put in place an app that allows customers to access a wide range of banking transactions while on-the-move. SCB lately launched a mobile offering, Breeze Balance, that allows Smartphone users to bank with SCB through a rich user interface and has a strong banking capability set.

Though the majority of banking population is engaged in formal banking, the total number of Internet Subscribers has reached 3,11,40,804 at the end of February 2012 and the total number of Mobile Phone subscribers has reached 105.051 million at the end of June 2013 in Bangladesh, indicating a strong adoption of the mobile phone and internet as a channel for communication. Instead of setting up brick and mortar branches this presents an ideal opportunity to use these alternative technology channels as a means to deliver banking services both cost-effectively and immediately. As banks are integrating channels in order to ensure the accuracy and integrity of transaction data, there is a growing demand for technology to support these channels.