The Bankwatch

Interesting goings on in Tokyo this week. I know people in Roppongi, and the traffic is completely snarled by the effect of this visit which is for several days it turns out. Locally it is out of the ordinary.

Its a dramatic shift from the days of Mr Koizumi, and has consequences for international trade and banking given the combined size of these two economies relative to US or Eurozone.

FT.com / Asia-Pacific / China – Japan and China cement relations

The leaders of Japan and China agreed on Wednesday on measures, including annual summit meetings and stepped-up civil and military exchanges, to cement a recent improvement of relations after talks in Tokyo that Japanese officials described as “extremely productive and meaningful”.

Hu Jintao, China’s president, the first head of state to visit Japan in a decade and only the second ever, said: “Prime Minister (Yasuo) Fukuda and I believe that Sino-Japanese relations are at a new historic starting point.”

 Some interesting stats about Indian banking, that surprised me at first.

SURBHI GOEL TIMES NEWS NETWORK[ FRIDAY, NOVEMBER 24, 2006 02:31:25 AM]

Standing in a queue, waiting for the teller to give your withdrawal money or moving from one counter to another to deposit cash is a tale of the good old days. Now ‘Your Bank’ has reached you at your fingertip. Core banking systems and e-banking have enabled customers to interact and transact with banks seamlessly. Globally, about 10% of the customers regularly do online banking. In India, less than 1% of the millions of customers are using Internet banking and the trend is catching up, albeit slowly.

Source: Banks on people.connect via Net route- The Economic Times

This is just a dump of useful information for reference.

At present, there are more than 15,000 ATMs in India that give customers the comfort of anytime money. According to sources, the overall IT spend of a bank is around Rs 300-500 crore. “Within the next 10 years, we foresee 15-20% cost saving in transactions because of the advancement and IT adoption,” says Kalyan Sunder, general manager, IT, Bank of India.
He further adds that within 5-6 years, Bank of India would increase its customers from 25 million to 40 million. Though the number of people, using Internet banking may appear to be small yet it holds good potential.
“At present, 1.3 million users are connected through online banking. About 12-13% of our daily transactions are online,” says Pravir Vohra, general manager, IT, ICICI Bank, the largest private sector bank in
the country.

The benefits of IT in banking are going to the villages and small towns as well. As more and more technology is penetrating rural areas, rural banking is taking a new turn. “We have tied-up with BSNL and VSNL to provide better connectivity via phone banking. We also give special Kissan debit cards”, says SK Sharma, deputy general manager, Oriental Bank of Commerce.

There are other services like rural mobile ATMs and kiosks that are helping villagers. Moreover, with the help new tools like biometrics, voice activation and thumb impression technology, banks are optimistic about providing better facilities to farmers. “We are coming up with the concept of smart cards for farmers. We are also in line to devise services that are both offline and online to make the process of e-banking more farmer-friendly,” adds Mr Vohra of ICICI Bank.

And last point, cheque truncation is coming too.

Soon the Reserve Bank of India will come up with the pilot project — Cheque Truncation solution — that would replace paper-based cheque clearing enabling seamless transition to a secure image based cheque clearing system. Get ready for even more tech savvy banking in the coming months.

Good stats on international payments trends, courtesy of American Banker.

Technorati Tags: payments

If you need to know where this is all going, then look to Japan & South Korea.

Japan, South Korea lead world in contactless payments : Contactless News

In Japan, FeliCa has created innovative businesses such as Suica (East Japan Railways’ transit card) and Edy (BitWallet’s e-money service), through which credit card and financial services, transportation and mobile service companies have aggressively adopted FeliCa-based smartcard payment solutions.

Furthermore, FeliCa has been installed in mobile handsets, so called ‘Osaifu-Keitai’ and ‘Mobile FeliCa’, allowing them to be used in a wide variety of contexts: as credit card, pre-paid e-money, transit card, and as identification for entrance management.

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In a study, designed to provide banks, payment processors and retailers with a road map for the next decade to help plan their payments business strategies, its indicated payments will double worldwide by 2010, but the details are more interesting.

Finextra: Global electronic payment volumes to double by 2010

The annual number of electronic payment transactions, currently at approximately 210 billion worldwide, are expected to double by the end of the decade, according to research released by ACI Worldwide.

The individual markets of different growth profiles:

The Eastern Europe and Asia/Pacific regions are forecast to lead the world in electronic payment transaction growth, predicted at 21.6% and 19.2% respectively, for the period of 2004 to 2009.Other regions including the Middle East, are forecast to increase 15.9% and NAFTA (North American Free Trade Alliance) expected to grow 12.3%.

During the five-year period from 2004 to 2009, forecast volumes are expected to double across the world, with China and India doubling more quickly at a rate of every three and four years, respectively. 

Relevance to Bankwatch: Background for development of payments strategy.ACIStudy.pdf

Technorati Tags: payments bankwatch_relevance_strategy

Something we take for granted in the West hit Shanghai as their debit card system collapsed.

City's bank card system collapses

SHANGHAI'S major department stores, restaurants and some automatic teller machines failed to accept bank cards since noon today because of a network breakdown at China Unionpay, the country's integrated system for bank cards transactions.

While the card base is enormous, the ATM base is smaller than I'd expect.

China has issued more than 920 million bank cards, including debit
cards and credit cards since the end of last year, up 142 percent from
2002, the year when China Unionpay was set up.There are 86,000 automatic teller machines and 406,000 point of sales machines in the country so far.

Technorati Tags: debit_card, china