Retail Banking channels

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.

Extension Counters:

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.