Saturday, February 6, 2016

Interlinking eLounges in India-Break the Silo Mentality

          In the last year, Banks in India have been setting up eLounges across the country to encourage customers to migrate to Digital Transactions.

          Q: What is eLounge?
Ans: In layman’s language, eLounge is a self-serviced banking kiosk to enable bank customers to transact a variety of transactions at their own pace.

eLobby Banking can be understood  as the automated delivery of new and traditional banking products and services without the intervention of the bank staff and through the interactive communication channels.

          The following links show the spread of eLounge/eLobby in Banking sector in India.
State Bank Tech Learning Centre – Interactive learning session to familiarise Bank’s alternate banking channels viz Net Banking, Mobile Banking, Green Channel, ATMs, CDMs, Plastic Banking(Cards), Pass Book digital printing & more

          One of the main reasons for low adoption of eTransactions in the rural areas is the absence of safe transaction environment.

One way of reducing the fear of unsafe transaction environment is to ensure safe transaction environment.

Another challenge is the frequent disruptions due to power cuts or internet failures.
          The above links show that major banks in India have invested heavily to offer Safe eBanking environment to their customers. Please note this eLounge services is restricted to their CUSTOMERS.           Other bank customers can only access ATM services.

These eLounges’/eLobbies’ offer the following services, depending on the respective bank’s vision for increasing digital transactions:-

  • Cash Dispenser
  • Passbook Printing kiosk
  • Coin Vending Machine
  • PCs for Netbanking facility
  • Cash Deposit Kiosks
  • Cheque Deposit machines
  • Self service terminals
  • Automated Pass Book Printing
          All the above services operate in silos i.e they offer service to their respective bank customers only and no inter-operability is possible.
          This means a Bank of Baroda customer cannot access his/her account at Corporation Bank eLobby.

          Drawbacks of the Silo Mentality:

a)     Low number of transactions
b)    High maintenance  cost
c)     Low turnover of  transactions
d)    Reduction in Management interest
e)    Gradual shutdown of eLounge/eLobby

Reserve Bank of India vide its circular No RBI/2015-16/288
DBR.No.BAPD.BC.72/22.01.001/2015-16 dt.January 14, 2016 outlined the “Facilities which can be provided through ATMs”.

Broad interpretation of this circular indicates that customer of any bank should experience Safe Digital transactions environment in any ATM and should not be tied down only to his/her Bank eLounge.

ATMs should be kept free for cash transactions only and other machines in the ATM lobby may be made available for other facilities.

The average time for a cash transaction at ATM is 60 seconds and the average time for a non-cash transaction ranges from 60 seconds to 180 seconds.

The Alternates:

a)     Linkages of all banks eLounge/eLobby
b)    Customers of any bank can access basic electronic banking service at any bank eLounge/eLobby

As the basic infrastructure is already in place, linkages of eLounges’/eLobbies’ are feasible with minimal investment by the respective banks. 

Advantages of such linkages:

01)  Increase in footfalls at the eLounges’/eLobbies’
02) Increase transactions turnover at the eLounges’/eLobbies’
03)  Reduce recurring expenditure
04)  Assist in the spread of Digital India Vision

The broad contours of a typical eLounge for Safe eTransactions are as under:-

1.     Each hub to have a minimum of 3 high end computers
2.     Each hub to have broadband connection
3.     3 FA (3 Factor Authentication)
A.    1st Factor – something the user knows
B.    2nd Factor – something the user has
C.     3rd Factor – something the user has
4.     The hub to be protected from internet viruses and other threats

Bank eLounges can be set up "CSC eGov” service centres. 1,40,000 CSC eGov service centres are spread over India. The number is expected to be scaled up to 2,50,000 in the next couple of years. Difficult to believe!! Check this out.

At a single stroke, the footfalls in CSC service centres will increase and boost ancillary services too.