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Consumer as co-creator of value:
Crossing the technology hurdle
COMMITTEES ON COMPUTERISATION OF BANKS
IN INDIA - 1982-1995
Working Group to consider feasibility of introducing MICR /
OCR Technology for Cheque processing (1982), Convenor : Dr
Y B Damle, Advisor, Management Services Department, RBI
Committee on Mechanisation in the Banking Industry (1984),
Chairman : Dr C Rangarajan, Deputy Governor, Reserve Bank
of India
Committees on Communication Network for Banks and SWIFT
implementation (1987), Chairman : Shri TNA Iyer, Executive
Director, RBI
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Consumer as co-creator of value:
Crossing the technology hurdle
COMMITTEES ON COMPUTERISATION OF BANKS
IN INDIA - 1982-1995 continued…
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Consumer as co-creator of value:
Crossing the technology hurdle
LITERATURE REVIEW
Ostlund (1974)extended Rogers’(1971) seminal work on diffusion in
identifying risk as influential to the adoption process. Diffusion studies found
that adopters are more innovative, less risk averse, perceive an innovation
Parasuraman (2000) - optimism and innovativeness are drivers of
technology readiness, while discomfort and insecurity are inhibitors. If
consumers are not “ready” to be an internet banking user, they are likely to
express discomfort and insecurity
Mary Modahl(2001), Forrester Research, impact of the Internet on business,
developed a concept called "Technographics," Ranked computer users by their
comfort level with technology and how likely they are to use the Internet:
Early Adopters, Mainstream Users and Laggards
Financial services' researchers, such as Black et al(2002). and Gerrard and
Cunningham(2003), Theory of diffusion and internet banking, Internet
banking is perceived: More convenient and more compatible with the
adopter's lifestyle or more complex and requiring a higher level of PC skills
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Consumer as co-creator of value:
Crossing the technology hurdle
ADVANTAGES OF INTERNET BANKING
Improve customer access, convenience
Facilitate the offering of more services
Increase customer satisfaction and loyalty
Attract new customers easily
Provide services offered by competitors
Reduce customer attrition
Reduces the time, cost and effort in the interaction
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Consumer as co-creator of value:
Crossing the technology hurdle
ADVANTAGES OF INTERNET BANKING
Conti…
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Consumer as co-creator of value:
Crossing the technology hurdle
INDIAN SCENARIO – Banks & IT
Price Water Coopers report on Indian Banks: use of IT
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Consumer as co-creator of value:
Crossing the technology hurdle
INDIAN SCENARIO – IDRBT, Hyderabad-1996
V-SAT based Financial Network for banks
Data warehousing & Datamining
Publishes a Journal on IT in Banking
Web based training for executives
INdian FInancial NETwork(INFINET)
Financial Networks and Applications
Electronic Payments and Settlement Systems
Security Technologies for the Financial Sector
Technology Based Education, Training and Development
Financial Information Systems and Business Intelligence
http://www.bulletin.rbi.org.in
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Consumer as co-creator of value:
Crossing the technology hurdle
INDIAN SCENARIO: STATISTICS - 2009
http://www.bulletin.rbi.org.in
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Consumer as co-creator of value:
Crossing the technology hurdle
INDIAN SCENARIO – IT Penetration
Year Population Users % penetration
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Consumer as co-creator of value:
Crossing the technology hurdle
HURDLES FOR ADOPTION
The Technology Readiness Index (TRI) of Parasuraman:
Optimism: the degree to which people with a positive view of
technology believe it offers increased control, flexibility and
efficiency in their lives
Innovativeness: the degree to which people are technological
pioneers and thought leaders
Discomfort: the degree to which people perceive a lack of
control over technology and feel overwhelmed by it, and
Insecurity: the degree to which people distrust technology and
are skeptical of its ability to work properly
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Consumer as co-creator of value:
Crossing the technology hurdle
HURDLES FOR ADOPTION
Key components of security concerns:
Authentication: The assurance of identity of the person in
a deal
Authorization: A party doing a transaction is authorized
to do so
Privacy: The confidentiality of data and information
relating to any deal
Data integrity: Assurance that the data has not been
altered
Non-repudiation: A party to the deal cannot deny that it
originated the communication or data
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Consumer as co-creator of value:
Crossing the technology hurdle
CROSSING HURDLES FOR ADOPTION
SUGGESTIONS:
Remove lack of human interaction
Address pricing concerns – Hole-in-the-wall(Sugata Mitra)
Need to shift or perish
Cost reduction: almost 100 times cheaper
Increased customer participation
Self service 24*7, Anytime Anywhere Banking
Divide and Rule
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Consumer as co-creator of value:
Crossing the technology hurdle
“Much will depend on the capability to leap frog to the
state-of-the-art payment and settlement systems.
Given the high rate of technology absorption witnessed
in the recent past in our region, there is reason to be
optimistic that the challenges will be met successful”
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Consumer as co-creator of value:
Crossing the technology hurdle
CONCLUSION
Choice is made
Huge effort & cost
New business model Cost reduction +
Better service +
Take this to public Co-creation of
Need for push value =
Change willingly or forcible Increased
Many hurdles but not difficult Loyalty
Include customer for progress
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Consumer as co-creator of value:
Crossing the technology hurdle
Thank You
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Consumer as co-creator of value:
Crossing the technology hurdle