Modern Day Banking Systems

Modern Day Banking Systems

In modern day banking systems are technological advanced, innovative and user friendly compare to last five years ago situation. To expand their market share, to attract more business banks compete each other with continuous technological advancement and improvement of their staff.

These innovative banking operations have reduced the importance of Branch Banking operations further due to the customers’ acceptability of the internet banking concept.

Banking industry as a whole is being undergo immense changes with the adoption of high tech delivery channels as it would focus more on self-services.

Branchless banking is fast replacing the brick and motor branch due to the advancement of technology. The future of retail banking will depend on electronic banking and it is pro poor system, which will reduce cost to deliver the banking products and services.

Since the business of banking is about financial services, efficient and effective combination of people and systems will lead to the success of the business.

In service marketing sector people are the most important and expensive business system component. People play a vital role in most operational systems and processes. Knowledge, skills and attitudes often determine the quality and quantity of the system output. High performance business system requires right fit of people to jobs.

Jim Collins, in his book "Good to Great," said, "Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.

Good systems and processes can leverage ordinary people to produce extraordinary results. They also reduce the company's dependence on people that come and go—especially the superstars. A systemized work environment increases job satisfaction and boosts productivity. People stay longer and become more valuable to the organization.

Recently banks introduced cash deposit machines apart from cash withdrawal machines (ATM). Customers are not more reluctant to use these machines since they feel curious whether the transaction carried out successfully or not.

To encourage the same banks initiate fee on over the counter withdrawals.

Eg.Commercial Bank

Sampath Bank

Survival of the banking industry depends on the confidence and interest of the public towards banks. Accordingly, modern day banking concept is about relationship management, building profitable, reliable and professional relationships with the customers.

To mitigate the default/credit risk Know Your Customer (KYC) concept is played crucial role in the soundness in banking sector.

To provide better service to satisfy their clients banks must have reliable, updated, sophisticated information and supportive system. But for the customer relationship management (CRM), customer interaction is very important. Without direct interaction bank will lost cross selling and upselling opportunities too. It will affect the growth of the business. 

The combination of good people and good systems produces great results. To get top results, banks have to turn their systems more aware and user friendly to their staff. This translates to increased creativity, productivity, and superior customer service.

The overall performance of a quality management system and its processes ultimately depends on the involvement of competent people and whether they are properly introduced and integrated into the organization. The involvement of people is important in order for an organization’s quality management system to achieve outcomes which are consistent and aligned with their strategies and values. It is critical to identify, develop and evaluate the knowledge, skills, behavior and work environment required for the effective involvement of people with the necessary competence.

Further banks must provide guidelines for human factors which influence people involvement and competence, and creates value that helps to achieve the organization’s objectives.

It is critical to identify, develop and evaluate the knowledge, skills, behavior and work environment required for the effective involvement of people with the necessary competence.

On the other hand, when growing a business, it’s important to define, implement, and establish systems early on. A business system is a working combination of people and automated applications organized to meet a certain set of business objectives.

Every aspect of the business should have a system in place to gauge productivity, effectiveness, and growth.

Systems are put into place to leverage resources: time, capital, and assets. With established systems, banks ensuring that every part of the business is being used to its full potential and is available, on call, when need it.

However, when the all banking activities fully automated, collapse of the system will lead to crucial damage to their clientele.Eg. Recent ransomware cyber-attack.

Since the new generation is more technologically advanced than the previous gen and they are more interested on internet banking and related systems.

But the matured generation still intends to walk to the bank and have a chat with bank staff and maintain cordial relationship. This relationship spread positive word of mouth about the bank and it is important for the banking point of view.

It is experienced that pensioners love to walk to the bank on pension date and chat with bank staff and stay in the bank for a while.

Commercial bank introduces applying loans (personal and cash margin) through online. However, to evaluate the credibility of the client, staff has to contact or ask the customer to visit the branch. For the credit decisions interviewing of the customer is very important.

Further the accepting of security documents should be done in front of a bank officer too.

It is experienced that in a day bank have to reply lots of over the phone queries of customers. Fully automated system will not able to facilitate those unsystematic operational requirements.

According to the Commercial Banks of Ceylon PLC annual report 60% of their staff consist with the bankers with more than 10 years’ experience and the management consider its employees are the most valuable asset to them.

Accordingly, discussion concludes with that both people factor and the system factor act a vital role in the banking industry and they are inter dependable on each other.