A1256655583lvmMg - PowerPoint PPT Presentation

Title: A1256655583lvmMg


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WELCOME TO A PRESENTATION ON Business
Opportunities in implementing Cheque Truncation
Atul Kumar Chief Manager, Syndicate
Bank Corporate Office, Bangalore
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BFSI has always been the most significant
contributor to the countrys domestic IT
consumption.

• At Rs 10,453 crore, the financial sector again
  proved to be the most lucrative vertical
  accounting for nearly a quarter of the domestic
  industry.

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BFSI IT Still Banked on BFSI
Spending
DQ Top 20 2005
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More than 50 of the Top 20 IT Mega spenders were
from BFSI Segment

• Source DQ-IDC India Survey
• Mega spenders 2005

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World leading banks adjust their portfolio by
emphasizing more on payment- related revenues.
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Global Trend
Federal Reserve More than 40 of revenue of the
USs largest banks derives from payment business.
Source Fed New York , The Global Payments
System A Central Bankers Perspective
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Global Trend
Boston Consulting Group Payment revenues are up
to 40 of total bank revenues
Payment revenue Total Revenue
US 40
UK 32
Australia 24
Source Boston Consulting Group, The Global
Payments 2005
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Cheque Truncation

• Benefits
• Shortening cheque clearing cycle
• - Nationwide cheque clearing period will be
  drastically reduced.
• Saving costs of cheque management, such as
• - Transportation cost of physical cheque
• - Cheque processing costs incurred on
  both RBI (ECS) and banks.
• - Cost of storing physical cheques
  (According to existing norms,banks
• have to keep physical cheques for 8
  yr.)
• Reducing risk of losing physical cheques during
  transportation

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Cheque Truncation Business Opportunities..

• Use already created infrastructure in a
  core banking scenario. Since it shares the
  network across applications like core banking,
  RTGS etc, , the cost burden for each application
  will get reduced which in turn ensures optimum
  utilization of Infrastructure.
• Opportunity for outsourcing There can be a
  tie up with smaller banks for capturing the
  images of their outward instruments at a cost
  based on the volume of transactions. This will
  enable the banks to reduce their costs to a large
  extent.

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Cheque Truncation Business Opportunities

• Electronic images of the instruments can be given
  to the customer along with the statement of
  account to enhance the satisfaction levels of the
  customer (may be at a cost for those who are
  willing to pay).
• It facilitates speedy and accurate customer
  service resulting in customer delight.

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Cheque Truncation Business Opportunities

• By leveraging on current imaging technology,
  public key infrastructure and network
  infrastructure, the CTS provides for far greater
  efficiency and fewer errors. The use of images
  increases operational efficiency substantially
  and eases the storage and retrieval process.
• The traditional methodology of issuing a cheque
  and taking advantage of the delay before it s
  debited effectively goes away thus putting an
  end to kite flying.

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Cheque Truncation Business Opportunities

• In case of large corporate clients who present
  more number of cheques in clearing, Bank can
  think of installing a scanner at customer
  location along with the remote connectivity and
  get the captured images which can be processed
  by the system. This will save time for the
  customer and for the Bank.
• With CTS, the myth of fixed time clearing cycles
  can eventually go paving way for multiple
  (ANYTIME ONLINE CLEARING) clearing cycles.

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Benefits
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Thus, Cheque truncation is a business enabler. It
leads to higher efficiencies and better managed
operations.
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Issues Key Communications Trends

• Gilders Law Bandwidth
• Bandwidth available doubles every 6-9 months
• The Death of Distance
• Cost of bandwidth still high in India
• Bubble Bandwidth still not available

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CRITICAL SUCCESS FACTORS

• TOP MANAGEMENT COMMITMENT SUPPORT

• BUSINESS PROCESS REENGINEERING

• SUCCESSFUL MANAGEMENT OF CHANGE

• BEST-OF-THE-BREED SOLUTIONS

• TRAINING AT ALL LEVELS

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Payment Hub
Key Drivers Strategic Objectives, International
Best Practices

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Banks are loosing Business ?
Banks that focus on products instead of
relationships will lose business to
non-traditional financial companies that give
priority to managing customer relationships
Peppers Rogers Group
Study
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akumar_at_syndicatebank.net