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Wednesday, April 30, 2008

BRAC Bank goes virtual, virtual job loss or creation?

Sajjadur Rahman writes in Daily Star.
It may sound quite alien to many in the country that a bank branch can be operated without any staff. But it's going to be true today. BRAC Bank, a growing private commercial bank, will open a branch without staff. The bank calls it a virtual bank, offering normal financial services as provided by a regular bank branch.“Virtual banking will deliver faster and real-time services to the customers and will reduce operational costs,” said Abedur Rahman Sikder, head of marketing and corporate affairs of BRAC Bank.Virtual banking provides convenient and secured banking services 24 hours a day. Initially, the bank's virtual services will include deposit and cash withdrawal, inquiries about balance, transfer of funds from one account to another, statement of account, and provision of new checkbooks. Telephone and online banking will also be available at that branch.The virtual banking will offer videoconferences within a couple of months so that clients can talk to bank officials in the event of any necessity, Sikder said.There will be four ATMs, three cash deposit machines, and three telephone lines at the virtual branch on 98 Gulshan Avenue. Many banks have gone for virtual banking with the growing commercialisation of the internet since 1990s. The system has replaced the traditional time-consuming banking in many countries in the last two decades.The world's first fully functional virtual bank was the Security First Network Bank (SFNB), which began operations on October 18, 1995 at Atlanta, Georgia in US.Some banks in India have already started virtual banking.“We are the first to start on virtual banking by opening a branch,” Sikder said. “Our objective is to push the customers to go for the new system, which is cost-effective,” he said. “We will be able to provide convenient banking for our clients,” said Sikder. (END)
Well so much so for BRAC Bank, their constant innovation seems to be paying them off pretty well. However just a paradox that pops up sometimes in my head is, how much automation is actually relevant in Bangladesh's context? I mean any sort of automation certainly implies some lay offs, some jobs dissolved...or does it not? I wonder if Bangladesh is the only country where ATMs are guarded by human agents, I don't know much about ATMs in other countries whether they have enough manpower to guard every single ATM to prevent security threats. ATMs of Bangladeshi banks have certainly created some employment opportunities for those who help us with the door while entering and coming out of an ATM booth. Now if banks start opening virtual banks such as this, does it also imply that we let go the opportunity to create a few jobs for some human beings in the process who could have otherwise been on the other side of the counters? Does automation come with a cost? Are we ready and willing to compromise it to provide superior quality to customers? May be BRAC Bank thinks 'yes'. What do you think?


Saeed Bin Rouf said...

Automation certainly helps. I won’t argue with that. Yes, there will be some lay-offs. On the other hand there will be some new jobs as well. You are right about ATMs in other countries. In Sydney, you’ll find an ATM in almost every other corner of a street, never guarded by anyone. In addition, most of them are not alike ours in Bangladesh, i.e. in a fridge-like door! They are simply open.

I doubt how far Brac Bank would stretch its virtual services. I also doubt about its target market. In the context of Bangladesh, like you’ve mentioned, I too think it’s not a good idea.

Anonymous said...

Don't you find it funny how all Sajjadur Rahman articles in The Daily Star are ALL praising Brac Bank's smallest moves? (do some research, all his articles exaggerates a small and minute Brac Bank move)

Brac does need the publicity and don't mind paying for it, after their lockers got broken into.

I work an international bank and we find it funny amongst our colleagues how Sajjadur Rahman makes the biggest news out of the most mundane thing. Everyone knows Bangladesh Bank is not going to hand out 150 branches in the banking industry, but it still gets the biggest headline. A partner bank already has 5 ATMs at one branch for 3 months... nothing. Brac attaches phones to ATMs (visited the place, that's the gist) and its news.

So to come back to your original question. No, virtual banking is something to worry about. It is unique to Brac and not even international banks can achieve it. We can't put phones next to our ATMs and only Brac has this insight and the insight to term it 'virtual banking' and pay for its newsworthy placement.