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Overview of Transaction Banking and the role of Transaction Banking in the global economy

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Improving banking efficacy depends on the order in which the different business banking processes are streamlined.  Notwithstanding the introduction of policies for reduced costs in the application of administrative processes which in turn, results into improved customer services.
All the successful banks aim towards providing their customers with free-flowing transaction banking solutions. This includes the customers’ cash flow and working capital requirements.

  • Receivables –  this type of cash flow offers ones’  business a selection of payment channels for their  customers, that includes; EFTPOS (Electronic Funds Transferred at Point Of Sale), BPAY (Payment system in Australia), Direct Debit.
  • Payables – this option provides ones’  business with solutions that in turn, helps manage the customers’ payments to creditors and other internal processes, such as payroll
  • Making Staff Superannuation Payments – Offering solutions for staff’s superannuation payments through QuickSuper.
  • Electronic Solutions – with the advancement in technology assisting the customers’ with their financial reporting through electronic banking facilities.
  • St.George 360 Cash Management Solutions – this offers the investors with complete cash solutions.

With the spread of globalisation throughout the different corners of the world, banks are looking for avenues to survive and excel as compared to their competitors. The best approaches taken by the various banks in order to improve their cash flow, is to lower the cost to business and simultaneously increasing the availability & quality of products and services. And to fulfil this approach most of the banks have introduced the system of Transactional Banking with the provision of online banking services accessible 24 hours a day, 365 days a year to the customers worldwide. As the world reeled from the financial crisis brought on by the reckless behavior of Wall Street, and a profusion of toxic investment instruments in the market, one area of finance was on the rise – Transaction Banking. This low risk, high profit business has gained even more attention in recent years as banks have been forced to look for capital sources outside of traditional markets.

Among the various functions adhered to by Transaction banking, the main operations are its presence behind the scenes and offering solutions to treasury. In the broadest definition, transaction banking allows for the safe and efficient movement of cash and securities around the global financial system. This includes institutional cash management services, facilitating trade finance deals and providing securities processing and agency services for both public and private entities.

When credit availability dried up, institutions realized that they could tap into their internal liquidity structures as a potential capital source. Focusing on finding internally trapped liquidity also forced these entities to examine existing corporate structures and weed out inefficiencies. This introspection was a key driver of bringing about organizational changes. These internal transformations in turn lead to immediate cost savings and put companies on track for long-term sustainable changes. Companies also quickly to realized that the treasury departments were ideally positioned to drive these initiatives.

Banking

Banks talk a good game, but are bankrupt when it comes to change and innovation

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Banks talk a good game, but are bankrupt when it comes to change and innovation 1

By Erich Gerber, SVP EMEA & APJ, TIBCO Software

You hear all the time about the incredible pace of change in technology and the way that it affects business, but sometimes we kid ourselves about the real speed of that change and the depth of its effects. Retail banking is a perfect example to illustrate the yawning chasm between the illusion and the less attractive reality. In this article, I want to provide a critique of the banking sector and its failure to change fundamentally and to modernise.

Banking is an old sector: the Banca Monte dei Paschi di Siena has its roots in the 15th century and the oldest UK banks go back to the 17th century. We often talk about legacy holding companies back, restricting their speed of operations and hampering their ability to adapt. Well, established banks have legacy in spades.

They also have cultural challenges. The old saying has it that something is “safe as the Bank of England” and that is a standard for security. But today we need banks to be more dynamic and represent something more than being a deposit box for our wealth. Consumers are accustomed to the superb customer experiences in entertainment (Spotify), devices (Apple), retail (Amazon), travel (Uber) and much else. Surveys show that they want their banks to be responsive, easy to use and available across multiple channels. They’d like banks to be secure but also to be advisors, enable flexible movement of assets between accounts, provide useful data analytics, be cloud- and mobile-friendly and offer deals that are specifically targeted at their interests.

S-l-o-w progress

At their core, banks now must become digital enterprises but, frankly, it has been slow going. As Deloitte observed: “While many banks are experimenting with digital, most have yet to make consistent, sustained and bold moves toward thorough, technology-enabled transformation.”

Erich Gerber

Erich Gerber

We all know that retail banking has changed significantly: you can see that in the proliferation of apps and the fact that, in pre-pandemic times, the morning and evening commute are peak times for transactions as people arrange their finances while sitting in trains, buses and subways. Banking has become a virtual, often mobile business, thanks to new tech-literate consumers pushing banks in that direction. But my fear is that the banks aren’t moving even nearly fast enough and that’s bad for us as consumers and bad for the banks themselves.

Banks are under pressure to change because challengers don’t have the legacy constraints of incumbents and because PSD2 and open banking regulations are having the intended effect of promoting banking as a service, delivering transparency and greater competition.

Attend any business technology conference and banks will talk about their digital transformations and customer experience breakthroughs, but it’s my contention that a lot of this work is more window-dressing than platform building. Or, to put it another way, banks are injecting Botox, rather than undergoing the open-heart surgery that they really need. It’s a case of ‘look: fluffy kittens and shiny baubles’ in the form of apps and websites, but the underlying platforms remain old and creaking and that means that the banking incumbents are hampered.

To be fair, I have lots of sympathy here. They simply can’t move as fast as the challenger banks that have had the luxury of starting their infrastructure from scratch and sooner or later that will come back and bite them. Look, for example, at cloud platforms where only 10 or 20 percent of infrastructure has been migrated despite promises of cloud-first strategies and the banking data centres where monolithic on-prem hardware still reigns.

You feel that slowness of action in your interactions with banks that communicate only via issued statements, letters notifying you of changes to Ts and Cs, and threats when you go into the red. Inertia is nothing new in banking either: we like to think that technology change happens in the blink of an eye but in banking contactless NFC took the best part of 20 years to go mainstream.

This is the dirty secret of banks. They see the need to change but remain shackled. Why are the banks so slow? Historically, because it was hard for competitors to gain banking licences and the capital to really challenge so there was no catalyst or mandate for change. Also, because change is tough and fear of downtime or a security compromise to critical systems is very real. More recently, because internal wars in organisations set roundheads against cavaliers, the risk-averse against the bold, resulting in impasse and frustration.

I said change is tough and that’s why banks need to power through on the basis of Winston Churchill’s wisdom that ‘if you’re going through hell, keep going.” How? By a combination of maniacal focus on expunging legacy systems, placing maximum emphasis on superb customer interaction experiences and digitally enabling anything that moves.

Right now, the banks are surviving, not thriving; they’re rabbits blinking into the headlights of approaching traffic, frozen in the moment. But they need to disrupt themselves before others do it to them: change is painful but not as painful as the alternative. They have to do much more or they will see a decline in their fortunes due to their bankrupt capacity for innovation and their inflexible infrastructures.

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Banking

Vietnamese National Citizen Bank Rises to Excellence with Three Global Financial Awards

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Hanoi, Vietnam – Global Banking & Finance Review is proud to announce the sweeping victory of National Citizen Bank in the 2020 Global Banking & Finance Awards®. The bank was recently presented with three prestigious global financial awards: Best Place to Work Vietnam 2020, Fastest Growing Retail Bank Vietnam 2020, and Best Investor Relations Bank Vietnam 2020. The Global Banking & Finance Awards® recognize the innovation, enterprise, method, progressive and influential transformations that transpire every year within the global finance community. National Citizen Bank would like to extend their thanks and appreciation to the community and their customers for their continuous loyalty and support throughout the last 25 years.

Vietnamese National Citizen Bank Rises to Excellence with Three Global Financial Awards 2

 

The National Citizen Bank was recognized for its all-inclusive professional working environment and ongoing staff development that enhances its internal communications and employee relations. Throughout the last 25 years, National Citizen Bank has focused on the core fundamentals of regulatory modifications with the underlying goal of dividing the volume of both business and administrative tasks. As a result of this, the bank has successfully strengthened its staff’s capacity to obtain, manage outstanding liabilities, and acquire assets to negotiate and retrieve capital efficiently and reliably.

When asked what allowed the bank to triumph against the fierce competition, Wanda Rich, Editor for Global Banking & Finance vocalized, “one of the key factors that stood out to the committee is that National Citizen Bank strives to maintain and maximize profit to shareholders through the implementation of stable, sustainable business operations and advanced production methods. The bank has also remained stable, positive, and had a high growth rate in all of its activities, which is not often seen; however, it clearly indicates how prestigious and overall accomplished they are. They should be exceptionally proud of all three awards.”

About National Citizen Bank

The National Citizen Bank was initially established as a rural bank in 1995 under the name Bank of Kien River. The bank optimized its competitive standing within the global financial industry, later transforming into an urban banking institution where they reinstated their name as the National Citizens Bank. With a team of highly professional financial experts and customer service representatives, the bank embraces each customer’s diverse needs to ensure customary, efficient, and trustworthy experiences from start to finish. Over the years, the bank has prided itself on its continued emphasis on risk management and global business relations with investors, customers, and partners. For more information, please visit the National Citizen Bank.

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Banking

Why ID verification is no longer a barrier to global growth in banking

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Why ID verification is no longer a barrier to global growth in banking 3

By Barley Laing, UK Managing Director at Melissa

Issues related to effective identity (ID) verification have restricted the global growth of both large banks and smaller challenger fintechs. With its plethora of internationally recognised IDs and verifiable private addresses, the western world is far different from much of the rest of the world, where this type of information does not exist. For example, many people in Africa and Asia lack recognised addresses. This anomaly prevents financial institutions from carrying out vital ID checks as they normally would, meaning they risk missing out on possible expansion into new and often burgeoning markets.

Proliferation of mobile

Smartphone usage is increasing in all corners of the world. Africa is no exception as the continent is  set to see another 300 million new mobile internet subscribers in the next few years. This rise offers an opportunity to financial services organisations based in the west who have been concerned about the ID verification process in countries where ID, as they know it, can be hard to obtain.

While there’s no magic bullet approach to ID verification in these countries, it’s essential to use all the sources of information the mobile device provides to inform the identity of prospective and existing customers. For example, mobile telephone numbers offer a form of digital identity as people rarely change them. These numbers can be used for dual stage verification, such as an SMS sent to the registered user’s mobile number with a unique code to complete the login to a secure website or transfer funds.

Technology is driving secure customer onboarding and ID verification via mobile. Today, prospective customers can use a merchant’s app on their smartphone to scan their identity documents – such as a driver’s licence. The scan can extract the prospect’s data from the Machine Readable Zone (MRZ), saving time while securing the correct data electronically for the financial institution. Checks can then be carried out in real time to verify the document.

The IP address of the mobile device can play a vital role in fraud prevention. It’s possible to match the location of the phone’s IP address with that of the registered owner – where they are known to live or work. If this information matches up, it’s likely the registered user is using the phone. However, suppose the device’s registered owner is based in a country different from the information provided by the phone’s current IP address. In that case, there could be fraudulent activity taking place.

But it’s not just mobile; other new technologies play significant roles in the ID process.

  • Biometrics

Biometrics, which are human physical and behavioural characteristics that can be used to digitally identify a person, are becoming a vital part of the ID verification process. Once a customer has passed the ID checks at the onboarding stage, biometrics – which can operate across all devices – may help confirm the customer’s identity with facial comparison technology. However, basic biometric services can be hackable. For example, fraudsters could obtain the photo of a customer that might enable them to gain access to that person’s account. That is why it is crucial for organisations to use a biometric algorithm that checks for eye movement as part of their ID verification process. This ensures they engage with a real live person, not a static image or avatar, to prevent fraud. Just as important is how biometrics quickly and straightforwardly enable customers to access their account or service without responding to time-consuming security questions or remembering various passwords, thereby shaping a positive experience.

  • Real-time access powers real-time decision making

When onboarding a new customer anywhere in the world, be sure to source a global dataset of billions of records. For real-time ID verification, fraud prevention, and data accuracy purposes, it should allow you to perform sufficient cross checks of the contact information provided by the prospective customers – their name, telephone number, email address, or home address. This dataset must leverage government agency, credit agency, and utility records, where possible, and access politically exposed person (PEP) watch lists.

  • Social media tells a story

Don’t forget that social media such as Facebook and Instagram provide a wealth of knowledge on those who use them. Accessing this data within the parameters of best practice data protection for ID verification purposes helps organisations identify users’ location and transactional behaviour to support the ID verification process and prevent fraud.

Evolving technology – mainly related to mobile – makes fast, accurate, and secure ID verification anywhere in the world a reality. By combining this technology with access to accurate contact data from billions of global consumers in real time, the door is open for forward-thinking financial institutions to move into new global markets and drive strong growth securely.

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