The back office centre of the world…
The past few years have seen India emerging as the principal hub for centralisation of processes of global majors in the banking and financial services. A few proactive players in the banking sector have already started exploiting technological advancements, networking of branches and common databases. The outcome - an emerging model of centralised operations and decentralised service which gives cutting edge advantage both in terms of reach and cost.

The need for speedy repayment handling
The past few years have seen various MNC and Indian Private Sector Banks compete with each other in the Credit Card Business. As consumer spending soars and Indian customers come to grips with the idea of purchasing on “credit”, banks are only too happy to satisfy customer needs for multiple credit cards. On the other hand, banks face the challenge of processing the repayments.

The latest trend in treasury is Straight through Processing
Today many institutions are aiming for complete end to end automation of financial transaction processing, extending from automated tools to help support the investment decision through, to the complete order and settlement cycle.By eliminating human involvement in routine transactions, the goal is for the marginal internal cost per trade to tend to zero.

Nip the NPA in the B (u) D
Every bank is rushing to get it’s share of the pie from all possible business opportunities. At the time of acquisition, the asset quality appears satisfactory. However, the worry in the mind of most bankers’ is that of consistency of the asset quality over a period of time. It is becoming increasingly clear that a risk-weighted bottom-line number that factors in the quality of the asset throughout its lifetime is the need of the hour.

How does a bank make a statement?
The myriad of choices and innovative offerings in personal financial services have put a big smile on the face of the customer. The financial organizations, on the other hand, are faced with the challenge of meeting ever-growing customer expectations, while keeping cost under control.

Cash Management Services: Riding high
Banks are always looking for opportunities to exploit their existing network and technology to enhance revenue. Now, as fee based revenue and sourcing of low cost funds become a priority for banks, Cash Management Services (CMS) offer an excellent opportunity to maximise value within existing parameters.

Focus on Fee-based Income & leveraging technology
With lower credit offtake and shrinking margins, fee-generating non-fund based facilities have acquired a new importance. This has also meant increased competition in this market.

Customers in the driving seat
The landscape of banking has been transformed by Universal banking and Merger & Acquisition led growth of new generation private sector banks. Expecting better service standards, more and more customers are switching to what they perceive as more efficient and customer friendly banks.

Dividend warrants: Fraud detection
Today the number of banks offering Payment at Par facility for Company issued warrants is many. These banks face many challenges in doing this business. Coordination across the various branches for receipt of warrants, reconciliation with the branch debits to the physical warrant receipts.

Going fast on a broken highway
Thanks to the retail thrust given by most of the banks, there has been an unprecedented growth in loans – Home finance, autos, commercial vehicles, two wheelers, consumer durables, and personal loans.The market penetration is now extending the length and breadth of the country. Added to this challenge are the product variant requiring different service requirements of the customer such as variable interest rates, foreclosure, balance transfer, etc.

There’s lots of money chasing very few cars
Auto financing is an extremely competitive business in India, particularly since it is accentuated by the underlying stagnation in auto sales. Car sales and consequently financing (70% of the cars are financed) had a low growth in 1999-2000 and was flat in 2000-2001. While there was a movement upwards, (from economy models to mid size to premium) the number of new entrants into the economy segment has dropped.

Mr. Late might well be Late Mr. !
In today’s market conditions, when wholesale credit off-take has slowed down, every business opportunity has to be grabbed, and that too quickly! The speed with which a Bank is able to appraise and disburse the money becomes the clincher in many a deal. No wonder then that almost every bank worth its name is grappling with the question, “How do we make our responses swift?”

New Rules of the game
The slowdown in the economy has lowered the credit offtake while falling interest rates only add fat to the fire. The new rules of the game make improving Operational Efficiency a critical lever for CEO’s to deliver higher returns to shareholders.

The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. These multiple changes happening one after other has a ripple effect on a bank (Refer fig. 2.1) trying to graduate from completely regulated sellers market to completed deregulated customers market.

The back office centre of the world…
The past few years have seen India emerging as the principal hub for carrying out remote processing of both voice and data. Given the significant cost advantage that this strategy offers, this business volume is poised for a massive growth. A few proactive players in the banking sector have already started exploiting technological advancements, created a remote processing centre in India and moving many transaction processes to India. It is only a matter of time before others follow suit.

Plastic Money comes of age!
“To spend is no longer a Sin!” declared the consumer pundits. The Financial World responded enthusiastically & intensified their sales efforts, trying to woo customers with their credit card offerings. Result- a market witnessing large growths in the card base & large number of players

How does a bank make a statement?
Given the low credit offtake, banks are increasingly focussing on retail assets as a growth area. The industry is witnessing stiff competition and a interest rate war among key players. This has resulted in a buyers market where the customer has a multitude of choices. Leading players have realised that interest rates are not a key source of competitive advantage. Also, the spread has been shrinking due to falling interest rates.

Banks on a caution note…
Operational Risk is one of the important arms of the risk management triangle – the other two being Credit Risk and Market (Treasury) Risk. Traditionally Operational risk has been captured in credit and market risk. Nevertheless, recent events in many countries indicate that if due attention is not paid to operational risk management, often a very large amount of loss may have to be sustained by a bank.

The new scenario…
The current trend in term loans is fast moving towards structured products and transaction intensity, each customised to cater to a unique client need.