Individuals and businesses, including startups, are benefiting from online banking, but the doors to new opportunities have yet to fully open.

Internet and cell phone banking help companies and businesses get instant access to bank accounts, conduct business-to-business (B2B) and online transactions.

From airlines, utilities, mutual funds, super food outlets, insurance companies and fertiliser and steel and chemical manufacturing facilities, there is hardly any corporate segment that remains untouched by mobile and internet banking.

The potential of online banking in revolutionising corporate and business culture has only partially been tapped

From retail superstores to distributors’ networks to tech-start-ups selling services online to on-call cab companies, there is a long list of businesses that routinely conduct bank transactions through internet and smartphones.

Starts-ups are also using online banking for reaching out to new customers, making online payments to individual and group suppliers of goods or services and transferring funds to and from partners’-employees’ accounts.

A large part of this entire scenario has developed in less than a decade following penetration of the internet and cell phone culture and backed by banks’ willingness to make technology work for them and their clients.

However, the potential of online banking in revolutionising corporate and business culture has only partially been tapped, corporate executives and businessmen say.

Key challenges like cyber security, banks’ ability to measure up to changing business expectations using online banking, poor performance of government-to-business (G2B) transactions, and a lack of trained bankers to handle online banking complaints and regulatory bottlenecks, need immediate attention.

Regulatory complexities affecting payment system operators are also cited as one of the impediments to faster growth of the online payment system. But central bankers say that as the regulations related to payment card security come into force from January 1, 2017 all such complexities, real or perceived, would come to an end.

As financial integration under the China-Pakistan Economic Corridor has started emerging, online banking has assumed additional importance and the sooner we resolve the issues related to it the better it is, bankers admit.

In private talks, most of them agree to businesses’ concerns regarding the quality of online banking and hold a structural flaw in harnessing and maintaining a talent pool of sufficiently qualified IT experts as one major source of many these concerns.

“Our IT workforce in the country is scattered, with the best part of it inclined to find jobs overseas or to run their own businesses with the average and below-average part actually available for employment, not only in banks but elsewhere in the corporate sector,” laments head of IT operations of a large local bank.

Most issues in online banking, from attempted breach of cyber security of businesses’ accounts to failures in ensuring real-time online transactions in the exact sense of the word keep popping up due to compromised handling by not-so-fit IT professionals and their supervising bankers.

“Besides, banks’ guidance and facilitation services to clients of online banking are not well-integrated,” complains a local textile miller. Young boys and girls hired by many banks for this purpose are not their regular employees and are low-paid. They are also not empowered enough to locate the origin of the problems that a client faces and then tell them exactly when or how his complaint could be addressed.

“This lack of first class customer facilitation is also acting as a dampener to horizontal growth of online banking. It might not affect the growth numbers (of online banking) but it flashes in the minds of those as yet-another-reason to not avail online banking services.”

In FY16, internet banking transactions grew to 1.9m the value of which was Rs880bn, up from1.8m transactions with a value of Rs798bn in FY15. Banking transaction made via cell phone banking (excluding branchless banking) reached 6.6m in FY16 with their value at Rs112bn. In FY15, the number of such transactions was 6.1m valuing Rs107bn.

Whereas growth in internet banking is attributable to a wider range of movements in businesses’ and individuals’ accounts, increase in cell phone transactions is more due to the growing trend of utility bills’ payments via smart phones, bankers say.

They say tech start-ups in particular and small and medium businesses being set up by younger people in general have a greater reliance on the internet both for running their businesses as well as for meeting their banking needs.

Among individuals, the trend to make domestic remittances through internet and cell phone transactions is growing and a number of university students also pay their fees and transfer money to friends and relatives on-line.

“The growth rate (of internet and mobile phone banking) can easily be accelerated if the feedback from customers is given due weight and banks modify and improve their systems accordingly,” says the director of an IT firm that also exports its software and applications.

“Based on my experience I can say that banks focus less on market research and rely more on marketing skills,” he says pointing out that most banks don’t make realistic projections of how internet and cell phone banking would shape up in next few years.

“Such projections can give them a fair idea of which areas of online banking they must focus on now and what kind of exact IT professionals’ expertise they might need in near future.”


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