This article throws light upon the six main channels used for the delivery of banking services. The channels are: 1. Branch Banking 2. Mobile Banking 3. ATM Channel of Banking 4. Mobile Banking or Phone Banking, Tele-Banking 5. PC Banking, y, Self Service Banking 6. Internet Banking, Online Banking, E-Banking.
Channel # 1. Branch Banking:
A branch of a bank is a place, office, unit where all banking operations are done under the single roof. People go to the branch for their banking requirements. This is the most popular and therefore most important channel of the Bank.
It is a place where customers can visit personally and can make use of different kind of services and banking products in one place. In case of any difficulty the customers are able to seek advise of the bank staff, remove their all doubts, get their all clarifications about banking operations.
Branch in fact is a place that serves as a channel of sales and services and bank employees can play vital role of customer satisfaction with smile. The branch is a channel that can boost the image of the entire bank by developing personal relations with customers and enhancing the customer relationship management of the bank.
The Extension Counter is a part of Branch Banking. Whenever any Branch deals with some huge Business House, A big Institution or Organization may be Government or Private it has to perform banking transactions in Bulk. In addition to keeping the accounts of such big houses, branch has to provide banking services to the staff of these organizations which may run in thousands in number. Other ancillary services are also required to be provided by the branch.
In case such organizations are not located very near to the branch the dealing branch opens a counter in the premises of such organization to facilitate the easy access to banking requirements and deploys some staff on such Extension Counters. The business conducted by these extension counters is always on behalf of the main branch and is taken into the account of the branch itself.
In other words the counter functions like a mini branch and provides all banking services either on the counter itself or through the main Branch. Previously banks were required to obtain license from RBI for opening extension counters now RBI has permitted all banks without obtaining its permission.
Channel # 2. Mobile Banking:
In the era of stiff competition every bank want to reach to maximum people to enhance their customer base. In this process some of the banks have started Mobile banking services. A mobile van is equipped with necessary equipment’s and a few staff members are assigned the duty on such vans.
These vans roam about the local area in order to provide door to door service to its customers. But in such a system very limited banking services are provided. The main services include receipt and payment of cash only. Some ancillary services like balance enquiry, cheque collection are also provided.
Channel # 3. ATM Channel of Banking:
In simple words The ATM is known as Automated Teller Machine. Before the introduction of ATM in 80’s the people were familiar with one teller only. A human being sitting behind the cash counter and making cash payments or receiving cash from customers. For cash transactions one was required to go to the teller physically and that too within the working hours of the bank. The invention of the ATM has changed the entire scenario.
Now you can withdraw money 24 hours a day without going to bank through an ATM installed in a nearby place. It has provided customers an option to access the banking services beyond the regular banking hours. ATM is a machine for receiving and dispensing cash round the clock. In its initial stage it was able to dispense cash only without able to perform any other function.
With advancement of technology the present time ATMs have been equipped with multitask technology and can perform following services:
i) Cash withdrawal,
ii) Cash Deposits,
iii) Balance Enquiry,
iv) Providing mini statement,
v) Deposit cheques, and
vi) Fund Transfers.
Some more advance ATMs provides services like paying utility Bills, Recharging Mobile services, Cheque Book requests. Etc.
The services from ATM can be availed only after one applies with the bank a request to issue him an ATM card. On receiving the request bank issues an ATM Card. This card carries a Personal Identification Number popularly known as (PIN). This number is generated by the computers of the bank at random. Only the customer and nobody else know this number.
This number in inscribed on a magnetic strip along with the Account number of the customer from which customer would like transact his banking transactions. This magnetic strip is in fact data storage devise about the particular customer and is secret one. While using the ATM card with magnetic strip fixed on its back works as tool to access the account to be operated.
As soon as the customer swipes the card, his account number is activated. ATM reads the information contained in the magnetic strip and finding the valid account number synchronized with PIN number, it advises the customer to enter the PIN number. After ensuring the authenticity of the user the ATM provides a field containing different services. Customer is free to choose among the list of services and proceed with the desired transactions.
Channel # 4. Mobile Banking or Phone Banking, Tele-Banking:
It is matter of surprise that many people are using mobile or phone banking without knowing that restricted services are being provided to them. Like ATM it is another electronic banking Channel which provides round the clock 24 hours banking for the customers. You deposit some amount in cash or through cheques a SMS shall flash on your mobile informing that such and such amount has been credited in your such and such account.
Likewise the moment any withdrawal is made from your account a similar message shall be sent on your mobile. This phone banking is one part that banks are doing themselves to keep their customers updated about the transactions of their respective accounts.
On the other part customers can approach to their banks and request for using the Phone banking or tele-banking. The bank shall enable its customers with their computerized system of IVR. This IVR technology is known as Interactive Voice Response which automates interactions with telephone callers.
Banks are increasingly turning to IVR to reduce the cost of services, inquiries and support calls. The system is enabled with input and responses to be gathered via spoken words with voice recognition.
The IVR solutions enable users to retrieve information from banks or are send information, requests and make queries. With the invention of IVR the practice of phone banking is increasing day by day because it helps in accessing the bank services from anywhere like Home, Office, Workplace or anywhere else.
The banks computers are connected with telephone (IVR is phone technology) and the telephone is linked with the modem. The customers are identified by a code word/keyword (in case of ATM it is PIN) after due identification of the callers a suitable reply or solution is sent on phone. With the help of phone banking the customers may get reply of their enquiries or services without going to bank.
IVR system also contains pre-recorded solutions. In case of Land Line the customer after dialing to the bank receives the guided instructions to proceed further like keying his/her account number. For identification six digit date of birth is also to be dialed.
IVR system provides number for availing the service. Each number pertains to different service. The customer has to press the number of desired service. Than IVR indicates further actions and following the same a customer can get the desired service.
Services provided through Phone banking are limited like:
1. Asking for account balance,
2. Status of a cheque deposited for collection,
3. Request for cheque book or statement of account,
4. Record stop payments, and
5. Information on bank products.
Off course enquires relating to banking services are also attended.
In case of Mobile banking a set of text messages or SMS can be used. Bank balance, cheque status, status of loan applications can be obtained through this system. As already stated the banks send SMS on mobile to keep its customers informed about any type of transaction in their accounts.
It is under active consideration of RBI to provide mobile banking services for transfer of amounts also. It approved it would be within reach of everyone to transact banking business through mobile phones in near talkes.
Channel # 5. PC Banking, y, Self Service Banking:
The internet banking as known today has gone through many phases of development. In each phase it was known by different names. In its initial stage in early 80s it was known as Home Banking means the banking transactions that can be done while sitting at home. During contemporary period it was also known as Self Service banking.
Initially the customers were able to perform some routine banking functions at home For availing home banking services telephone or cable connections were required and transactions were performed with the help of a terminal, keyboard and a monitor (TV or PC).
With the help of this facility customers were able to access to bank services like inquiry of account balance, moving funds between accounts, payment of bills and buy/sell investments or securities. All this was done by the customers themselves on their own system while sitting home, office, or work place.
That is why it was also known as self service banking although everything was done online. It was than a luxury for the customers. In New York this services were started in 1981 by some banks. In the year of 1983 it was started in U.K. by Bank of stock land. But the facility at that time was limited some restricted areas and also to only some select class of customers.
But now the internet banking or online banking has changed the entire scenario of banking industry throughout the world. From luxury it has become necessity. Banks are no longer confined to branches only, it has become a world vide phenomena.
Channel # 6. Internet Banking, Online Banking, E-Banking:
In India now most of the banks have their own websites for the purpose of offering banking services on the internet. The Reserve Bank of India has also issued guidelines for internet banking which all the banks are required to follow. The multinational and private sector banks have been successful in setting up internet banking but some Public Sector banks had been lagging behind because of their inherent difficulties.
Most of the public sector banks have very large network of their branches and good number of them are located in far flung remote areas and they face lack of connectivity. These banks have very large base of customers and include illiterate customers also. Some are still following old dated and traditional type of application methods and are not flexible for change.
Providing infrastructure for starting internet banking to wide spread network of branches in one go may not be possible. But it is really credible that these banks have done much and are now near to a stage when all will be web enabled.
As per RBI planning the banks were to enabled for internet banking in three levels:
1) The basic level service in which the bank’s websites disseminate information on different products and services to customers. It may receive and reply to customers’ queries through e- mails. It is also known as Information Only Service which provides general purpose information like interest rates, branch location, bank products and their features etc.
2) Simple transactional websites which allow customers to submit their instructions, applications for different services, and queries on their account balances. They do not permit any fund based transactions on their account. It is also known as Electronic Information Transfer system which provides specific information like account balances, transaction details, statement of account etc.
3) The third level of internet banking services offered by fully – transactional websites which allow customers to operate on their accounts for transfer of funds, payments of different bills, subscribing to other products of the bank, and to transact purchase and sale of securities. It is also known as Fully Electronic Transactional System.
This system requires high degree of security controls as it comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.