Online Banking in Third World Countries
A large number of banks in Pakistan are now migrating from the waiting in queues to online banking facility path for its consumers. Many banks have already joined the bandwagon of IT creativity and are providing its customers technology to facilitate customer growth and retention of current customers. The introduction of the ATM facility is one step in this particular direction. Though the strategy of utilizing the internet to create differentiators in the market is critical and detrimental to the overall growth of banks, there is a lacking of vision and timely marketed software that is not creating the rippling effect that senior bankers once anticipated.
It took multiple cycles of development and years of speculated understanding to foster and cater to the needs and requirements of the internet users. Saving time and pain in a fast paced world such as ours is mandatory. Consumers can no longer wait in line at hours at end to obtain check books or wait for bankers to conclude if they are negligible for car loans. Surfing financial statements, loan rates and comparing life insurance can now all be done by a click of the mouse.
The banking trends in the developed countries indicate that technology is now acting as a strong catalyst for improving customer retention as compared to last ten years ago. During early 1990’s, banks were primarily testing the grounds weather to introduce IT into its marketing strategy, but late 1990’s saw a completely different turn where online banks were being introduced and competing with banks that had physical presence. A revolution began incorporating services and value added features that consumers took strong response to.
Etrade corporation successfully penetrated the market by providing online trading in the initial stages with secure links and encrypted passwords. That market soon became saturated with software companies offering lower trading margins. Even AOL anticipated a growing potential and diverted into this expanding market and created moneyonline that now caters to a larger reader audience interested in the trading and finance sector.
Taking into account the blue prints of the banking industry, Pakistan has just started scratching the surface of online banking. Only MCB proclaims online banking facility but still have not been able to successfully deploy this service in the market. It takes conducive marketing research, consumer behavior, availability of internet access, avenues to place wealth and a confidence that banks will be there as time goes on for the IT to play its part.
Many ingredients of the IT equation are completely missing in Pakistan. First of all, the literacy rate of Pakistan determines how many users of internet can this nation truly have. Secondly, only recently mutual funds have started popping up in the financial sector. Thirdly, the overall environment is not ripe to introduce sophisticated software that works on data mining and customer retention. If we only get the banking processes and operations into gear and anticipate an exponential growth of education in this country, can we really work on appreciating the advantages of online banking.