Now a days, banking is much different than it was in pre-pandemic times. Many banks allow their employees to work from home with fourth generation ITC support through core banking software and well established IT networking, ensuring most of the services through technology based products and services. Some Banks also take advantage during current 'New Normal' situation of their well-established centralised banking model. However, some banks are facing challenges due to lack of implementation of modern technologies. So, the way people bank during the new normal will largely determine the future of banking operations. Banks should focus on some areas to meet customer demand during and after new normal to retain their customer base and also increase brand value.
CENTRALISED BANKING OPERATION: Under centralised banking operating all banking activities including general banking operation, account opening, cash management, fund transfer, issuance of check books, remittance, loan processing/ approval, loan documentation, loan disbursement & adjustment, trade transaction (import, export and bank guarantee) are managed through a centralised professional team after receiving formal or e-mail request (from pre-registered email ID) from the customer directly or from the point of contract endorsed by the dedicated Relationship Managers (RM).
During new normal, most of the centralised banks allow their back office/ operational teams to work from home with Virtual Privet Network (VPN) support to access the operating systems and to manage all day to day activities. As a result, they are ensuring all customer service with proper maintenance of social distancing.
Now it's time for all other banks to change their mode of operation from traditional system to centralised operation system to fulfil customer's baking need during new normal and after the pandemic.
CENTRALISED BUSINESS RELATIONSHIP TEAM/ RELATIONSHIP BANKING: Under centralised relationship banking system, all the corporate/ commercial/ MSME/ Retail (segment wise) customers of the banks are managed through highly professional dedicated relationship teams and their branches are used as sales and service centre.
During new normal, the dedicated Relationship Managers (RM) are well connected with their customers and try to ensure all business support with the help of modern technology and well functional back office teams. No matter whether they are working from home or from office, the dedicated RMs are always ready to support their portfolio customers.
After new normal, non-centralised banks are likely to face threat in retaining their customers and may need to re-structure/ re-design their banking model.
TECHNOLOGY BASED BANKING PRODUCTS/ SERVICES: For those Banks who are not prepared, their new business opportunities will be lost, customer satisfaction will suffer and employees will be inefficient.
In the new normal period, we are experiencing an environment where customers change their transaction patterns. People are more comfortable with digital banking services and alternative delivery channels (ADC) to meet their banking needs like ATM, Mobile Banking, Phone Banking and Internet Banking. Bangladesh Bank is also supportive for promoting digital banking platforms by introducing Electronic Fund Transfer Network (EFTN), Real Time Gross Settlement (RTGS), National Payment Switch Bangladesh (NPSB) for ATM booth sharing / Point of Sales (POS) sharing. BB also allows some international payment gateway operators to support alternative delivery channels in the banking sector of our country like VISA, Master, JCB etc. Some Banks already integrated all those digital platforms into their alternative delivery channels like ATM, Internet Banking and Mobile Banking platforms. Banks like Prime Bank (Altitude), The City Bank (City Touch), EBL, BRAC Bank, MTBL etc., have very well diversified and effective internet banking service. On the other hand, some banks like BRAC Bank (Bkash), DBBL (Rocket), UCB (U-cash), Trust Bank (T-Cash) etc., have well diversified mobile banking services all over the country. Apart from these, some banks are also offering deposit account services by using digital platforms, and others are transforming all internal approval/ operational process into digital platform by developing internal communication platform, e-mail platform and core banking system. Phone banking is also becoming popular and effective to ensure smooth banking service with minimum effort. Many banks have already established their call centres.
BANKING SERVICE PARTNERS : 'Agent baking' may be one of the best way to provide baking services to many people maintaining social distancing during the current pandemic. Some banks like Bank Asia, UCBL and MTB are doing very well in this sector and taking advantages for small deposit mobilisation.
Banks may also think about "Micro Agent" concept like mobile banking agents. Under this concept, 'Micro Agents" may be allowed for a limited cash transaction from the 'Agent Account' on behalf of the bank to their account holders by using digital platform (internet banking) against minimum charge/ commission. Bangladesh Bank may issue licence favoring specialised cash management companies to establish nationwide vast ATM networks (up to union level) to support banking transaction for their partner banks by using 'National Payment Switch Bangladesh (NPSB)' against certain fees/ commissions.
PROMOTING SELF- BANKING: It's time to encourage self-banking among bank customers by ensuring availability of all digital platforms of the banks. Now a days, a customer can manage all the day to day banking needs through self-service by using different digital platform like ATM, Debit/ Credit Cards, Internet Banking, Phone Banking and Mobile Banking services. In post 'New Normal' situation, banks with more self-service customers will take competitive advances than others in the industry.
IT SECURITY FOR DIGITAL BANKING: Banks should invest more to ensure IT security to protect their digital platforms from any type of fraudulent activity to protect their customer's interest as well as reputation of the banks.
BALANCING BETWEEN DIGITAL BANKING SERVICE AND COMPLIANCE : It's very challenging for banks to ensure all digital banking services while maintaining proper compliance. Banks should develop automated scanning system for identification of any suspicious transaction to prevent any type of money laundering and terrorism financing activities by using digital platform or self-banking services.
Now it's time to take initiatives to meet future banking needs:
* Offer more digital products to the individual customers and educate them for Self-banking
* Offer digital banking service to the corporate/ MSME/ Retail customers to meet their day to day transaction and MIS requirement
* Develop fully automated platform to process all internal and external process flows of the bank.
* Pursue all the service providers including govt./ semi-govt./ autonomous/ private organisations to use digital banking channels for efficient cash management.
Md. Rashaduzzaman is Team Head, Commercial Banking Division Prime Bank Limited & DBA Researcher, Faculty of Business Administration, University of Dhaka.
