HANDLING MASS RECORDS IN CONSUMER BANKING

ATIF HASSAN, Lecturer,
Defence Authority College of Business,
Karachi. (atif.hassan@dacb.edu.pk)
June 1 - 7, 2009

Over the last decade, Pakistan experienced an exponential growth of consumer banking. This unprecedented development has followed privatization of nationalized banks, banking reforms brought about by the State Bank of Pakistan and an increasingly marketing-oriented approach primarily targeted a large urban consumer base.

Consumer banking plays a vital role in economic growth of any country. The housing schemes create job opportunities not only for banks itself but almost 20 industries including cement, steel, paints, and most importantly unskilled labor employment. Because of rising numbers of consumer banking products and expanding clientele base, it becomes almost impossible for financial institutions to manage the gigantic data without proper information technology support.

The developing rivalry and increasing customer requirements have led to increased awareness amongst banks on the prospective and significance of information technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology based services has pushed Pakistani Banking fraternity to adopt the latest technological advances so as to meet the threat of competition and customer expectations. Pakistani banking industry is in the center of an Information Technology revolution. A combination of regulatory and market forces has supported the implementation of technology and automation in the Pakistani banking industry.

Majority of these information technology proposals require an active banking interface for their success. It is only when the banking and financial system is completely information technology enabled and effective that these financial transactions can be undertaken. Information technology is a strong enabler for all these initiatives and banks must play the vital position of a facilitator.

The banking sector has developed exclusive product plans expanding the entire benefit of the advancements in the e-Payments settings to the customer's desktop with the introduction of the electronic payments. Through the net banking facilities, banks have extended all services to their customers in an attempt to make banking easier and more accessible to a wider customer base.

Nowadays Information Technology is no doubt plays a significant role in the growth of other industries. Its need in consumer banking can be justified by the following key considerations where only IT infrastructure can help to handle these issues.

By using information technology, the application processing of the customer can be made fast. Electronic transactions take less time to process the application than manual because all the information is available online and relevant application processing persons just have to take the decision on the data available online.

In this era of high competition, it is the better service which attracts the customers toward doorstep. In consumer banking, this can be done by solving all the hurdles that come in front of the customers to avail the product. In this perspective, the information technology seems to be quite useful such as easy accessibility of resources online, fast and easy availability of the product by fast application processing described above.

Mass consumer client record handling: This problem is a big concern for CBSP. In consumer banking, the number of clients is very high and to keep the record of all customers manually is not only hard to maintain but also time consuming and resource intensive. By using any good consumer banking software solves this problem with an ease.

Using a good consumer banking software makes the tiring and time taken calculations faster and error free. Because the number of consumer banking clients is large and everyone is not innocent and responsible enough to make repayments, there is always a need to recover the loan amount from defaulter. Any efficient collection or repayment software is very useful in this context to support the collectors as they need to trace the defaulters frequently to take appropriate action against them for recovery.

With IT framework, banks can closely monitor accounts for risk analysis. They are better equipped to determine patterns of fraudulent activity and identify fraud in time to prevent it, saving their money.

Banks and financial institutions have recognized Information Technology as an enabler of sophisticated product development, better market infrastructure, and implementation of reliable techniques for control of risks. This helps the financial intermediaries to reach geographically distant and diversified markets. With continuous and rapid advances in technology, the banking sector has seen a revolutionary wave. Technology has changed the contours of three major functions performed by banks, i.e. access to liquidity, transformation of assets and monitoring of risks. Further, IT and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. The most important impact of IT in banking however has been the manner in which it has facilitated financial transactions across an entire spectrum of economic activities thus resulting in a sort of Economic Revolution. By introducing the possibility of online payments and other financial transactions, IT in banking has scaled up immensely the level of activity across sectors by making services and products easily available and accessible to an ever increasing net of people.