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Corporate Authorization for Banking - PowerPoint

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					E-Banking
Agenda

Technology Commencement in Banking
Product Based Banking
Customer Based Banking
Data Warehouse
CRM
Alternative Delivery Channels
Banks Position in the New Economy
Technology Commencement
in Banking

 In 70’s, banks started to establish centralized data
  processing centers.
 Essentially the roles of these data processing centers
  are:
   collect the handwritten documents from branches
   compile the documents
   manual data entry by the operators
   generate reports for the bank staff and the central
     bank
   execute some banking transactions
Branch Automation

 In 80’s, banks started technology investments for the
  branches.
 The first step is offline branches.
 Terminals connected to local branch computer
 Second step is online branches connected centrally.
  Most of the transactions started to be performed in the
  central mainframe.
Product Based Banking
 In the mid-1980s, banks accepted product based banking and
  competed with their products.
 Banks developed new products for their customers.
   Credit card
   Credit deposit account (Super Account)
   Debit cards
 Beside branch, banks brought new channels to give better service
  to their customers.
   ATM
   POS
   IVR
Plastic Cards

 The plastic card usage grown enormously in last 2
  decade.
 Plastic card became the main media for bank customers.
 Number of credit card in Turkey:




                                            data collected from BKM
Plastic Cards

 Number of debit card in Turkey:




                                    data collected from BKM
ATM
 In the mid-1980s, that cash dispensers truly became
  a worldwide phenomenon.
 It took 16 years for the first 100,000 cash dispensers
  to be installed, but only four years more for the next
  100,000.
 Now,ATM became the electronic face of banking for
  most customers.
 Beside cash withdrawal, there exist various
  transaction options from transfer to fund
  buying/selling.
 Now there are 12.174 ATM installed in Turkey (Ref:
  BKM)
Point Of Sale

New habits in shopping
Increased the use of plastic cards
Now there are 313.140 POS installed in Turkey
 (Ref: BKM)
ATM and POS Application Architecture


                     Debit Card
                     Authorization




               Switch System




                      Credit Card
                      Authorization
IVR
 Interactive Voice Response (IVR) is a software application that
  accepts a combination of voice telephone input and touch-tone
  keypad selection and provides appropriate responses in the form of
  voice
   IVR has come into our life at the beginnings of 90’s.
   First step in Telephone Banking
   Peak transaction volume in salary payment days for balance inquiry
   Integrated with ATM system
Customer Based Banking
     Product Based             Customer Based

• Customer introduction    •One customer information
                           file
on different systems
• Difficulty in creating
                           •Product factory
new products
• Different user           •Standard graphical user
interfaces for different   interface
environments
• Product based            •Consolidated customer
Customer - Bank            data
relation
                    Banking Application Architecture
                                                         Relationship Management


                                                                                                Portfolio
                                                         CIF          Product Factory
                                                                                              Management
                          ATM
                                                                                                                                 I
                                                                                                                                 N
                                           Deposit                                           Promissory        FX                F
                          POS                                  FBS           Securities        Notes        Import / Export
                                           (TD,DD)                                                                               O

                                                                                                                                 C
                                         Loans&Credits         NBS             EFT            Cheques         Merchant




                                                                                                                                          Information Delivery
                         Teletel                                                                                                 E
Delivery Services




                                                                                                                                 N
                                                                                                                                 T
                                         Sales Support                                                                           E
                        Telerom              System            CMS           Treasury        Payments          YKB HR
                                                                                                                                 R


                      Teller (Branch)
                                                                      Corporate Tables

                                                                              DAL
                     Internet Banking
                                                                      GL / Accounting

                                                                        Settlement                                            Reporting
                      Phone Banking
                                                                      Batch Operations


                     Internet Shopping

                                                                 Campaign             Credit Risk
                                               PCM                                                          Productivity
                                                                Management           Management




                                                                Management & Control
Data Warehouse

 Electronic repositories of summarized historical data
 The main idea behind data warehouse is get all
  company data working together so users can see
  more,learn more, and make the organization work
  better
 Data Warehouse helps users to identify trends, find
  answers to business questions and derive meaning from
  historical and operational data.
 Data access is easier and less costly
 Decision support solutions run faster and are more
  accurate.
    Data Warehouse Process
Life Cycle     Design         Transform        Extract        Deliver


             Transaction      Data               Load,        Publish
             Data             Scrubbing and                   and
                                                 index and
             Extraction       Cleansing                       Subscribe
                                                 Aggregate
Partial
Solutions
             Data          Data           Data Histories     Data
             Mapping       Replication    and                Access
                                          Summaries          Tools


Complete
Integrated   Integrated Data Warehouse Infrastructure
Solution
CRM

 CRM is an integrated sales, marketing and service
  strategy
 CRM goals are :
   Use existing relationships to grow revenue
   Use integrated information for excellent service
   Introduce more repeatable sales processes and
     procedures
   Create new value and loyalty
   Implement a more proactive solution strategy
The Three Phases of CRM
                              Acquire
                               New
                             Customer
                            Differentiation
                            •Innovation
                            •Convenience

Enhance The Bundling                          Adaptibility     Retain
Profitability •Reduce Cost                                    Profitable
                                              •Listening
 of Existing                                                  Customer
              •Customer service               •New products
 Customer
  Integrated CRM
  Applications
Life Cycle       Acquire            Enhance          Retain

              Direct             Cross Sell       Proactive
              Marketing          and Up Sell      Service
Partial
Functional
Solutions          Sales Force
                   Automation              Customer Support



 Complete
 Integrated          Integrated CRM Applications
 Solution
Alternative Delivery
Channels

     Anytime, anywhere banking
      –   Telephone Banking
      –   Internet Banking
      –   Mobile Banking
      –   Television banking
      –   Next ???
Telephone Banking
 7x24 banking through the phone
 Main components
   Switch
   IVR
   CTI(Computer Telephony Integration)
       Manage each call using the computer
       Pop up the user information while transferring the call
   Agent Desktop Application
       Win32,ActiveX, HTML
   Host Application
Telephone Banking
Infrastructure



    Telecom




              IVR   CTI   HOST
Internet Banking
• More and more banks are coming to realize that internet is a part of banks'
alternative delivery channel strategies activities concentrated in the business-to-
consumer segment, focused on retaining clients
• In Internet banking, security is a primary concern. Security concerns have been
addressed from every angle within the architecture of the Internet banking
application.
            Sample Internet Banking Architecture
Mobile Banking

Current Mobile Banking Applications:
  SMS Banking
  WAP Banking
  STK (Sim Toolkit) Banking
SMS Banking
 Basic banking inquiry transactions(balance inquiry, funds, exchange
  rate inquiry…) are performed by the cooperation of bank and the
  GSM operator
 Security is the main problem


                                      Leased line
                       GSM Operator                 Bank SMS
         GSM            Application
         Network          Server
                                                     Gateway



                        GSM                          Bank
                       Operator
                       SMS DB
                                                     SMS
                                                      DB       Bank Host
WAP Banking

 Wireless application protocol (WAP) is an application
  environment and set of communication protocols for
  wireless devices designed to enable manufacturer-,
  vendor-, and technology-independent access to the
  Internet and advanced telephony services.
 WAP is a global standard and is not controlled by any
  single company
 Various banking transactions offered in WAP
  environment by banks.
 Similar architecture with SMS banking
SIM Toolkit

 SIM card enables to keep and load different applications.
 SIM Application Toolkit has been agreed as a GSM standard
 SIM Application Toolkit is independent of phone
  manufacturers and designs.
 SIM Application Toolkit allows the flexibility to update the SIM
  to alter the services and download new services over the air
 SIM Application Toolkit is designed as a client-server
  application. On the server side, SimCard platform and the
  client side, phone that supports the SIM Application Toolkit
 In the near future, banks will start to offer banking
  transactions in this platform.
Television Banking
 Digital television (DTV) is the transmission of television signals using digital
  rather than conventional analog methods.
 Advantages of DTV over analog TV include:
               Superior image resolution (detail) for a given bandwidth
               Smaller bandwidth for a given image resolution
               Compatibility with computers and the Internet
               Interactivity
               Superior audio quality
               Consistency of reception over varying distances
   Banks offer their banking transaction in this new environment
   T-commerce in the near future.
What is the Next channel




             Microwave
               Banking
                ???
Channel Costs
Channel Integration Evolution
  Channel Integration evolution
     Reuse
      Efficiencies of Scale
      Reduction of Redundancies
The Role of Banks in the New Economy

 Internet and mobile devices have brought new rules to
  economy and shaped the way to do business
 Banks has also evolved according to the new economy
  and took their places in this new world to add value to
  their customer
 The new ways to do business are :
   e-commerce (B2C)
   m-commerce
   B2B
E-commerce - B2C
 E-commerce is the buying and selling of goods and services on the
  Internet.
 Main feature of e-commerce
    24-hour availability
     a global reach
     the ability to interact
    provide custom information and ordering
    and multimedia prospects,
 The Web is rapidly becoming a multibillion dollar source of revenue
   for the world's businesses.
 Banks provide secure payments infrastructure - virtual POS
M-commerce

 Mobile commerce applications involve using a mobile
  phone to carry out financial transactions- this usually
  means making a payment for goods or transferring
  funds electronically.
 As content delivery over wireless devices becomes
  faster, more secure, and scalable, there is wide
  speculation that m-commerce will surpass wireline e-
  commerce as the method of choice for digital commerce
  transactions.
B2B
 A housands of companies that sell products to other companies
  have discovered that the Web provides not only a 24-hour-a-day
  showcase for their products but a quick way to reach the right
  people in a company for more information.
 In the B2B, the bank role is to provide a reliable payment
  infrastructure that add value to corporate business
 This infrastructure should cover:
   Bill presentment
   Bill payment
   Different payment types(credit card, deposit account, loan)
   Information after payment
E-Security
 To improve the e-business, all the users should feel secure to perform the
  transaction this environment
 The main concepts in e-security are:
     PKI (public key infrastructure) enables users of a basically unsecure public
      network such as the Internet to securely and privately exchange data and
      money through the use of a public and a private cryptographic key pair that is
      obtained and shared through a trusted authority.
     Public key is a value provided by some designated authority as a key that,
      combined with a private key derived from the public key, can be used to
      effectively encryption messages and digital signature.
     Private or secret key is an encryption/decryption key known only to the party or
      parties that exchange secret messages. Public key is used together with a
      private key
E-Security - continued
  Digital certificate is an electronic "credit card" that establishes your credentials
   when doing business or other transactions on the Web. It is issued by a
   certification authority (CA).
  CA (certificate authority) is an authority in a network that issues and manages
   security credentials and public key for message encryption. As part of a public
   key infrastructure, a CA checks with a registration authority to verify information
   provided by the requestor of a digital certificate
  An RA (registration authority) is an authority in a network that verifies user
   requests for a digital certificate and tells the certificate authority to issue it.
Smart Cards
 About the size of a credit card, a smart card is a plastic card with an
  embedded microchip that can be loaded with data, used for telephone
  calling, electronic cash payments, and other applications, and then
   periodically "recharged" for additional use.
 smart card contains more information than a magnetic stripe card and it
  can be programmed for different applications. Some cards can contain
  programming and data to support multiple applications and some can be
  updated to add new applications after they are issued
 Benefit of smart cards:
     enhanced security
     off line transaction
     programmable card
        loyalty
        customer information
Related Links
   www.ykb.com
   www.teleweb.com.tr
   www.bkm.com.tr
   www.visa.com
   www.europay.com
   www.banktech.com
   www.bai.org
   www.mobilesimtoolkit.com
   www.itworld.com

				
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