08 April 2010
MUSCAT -- During the year 2009, the number of transactions handled by Automated Clearing House (ACH) system grew by 79 per cent compared to the previous year.
"We expect that a similar pace of growth will be witnessed during 2010", said Hamoud bin Sangoor al Zadjali (pictured), Chief Executive, Central Bank of Oman, in comments to the Observer. The potential users have started realising the benefits that ACH system offers.
The number of transactions handled by ACH started modestly but had been growing steadily.
Automated Clearing House (ACH) system, introduced in September 2006, has resulted in several benefits for the banks and their customers such as: operations cost saving in mailing, banking and reconciliation; economic way to process payments. Saves times and resources; reduced use of cash and cheques; reduced clearing time for retail payment; save trip between sender and destination customers; and more safe and efficient National Payment System to retail customers.
Electronic Cheque Clearing (ECC) service introduced by the CBO in January 2009 also offers ample scope for the banks to improve their operational efficiencies and customer services.
High value and urgent cheques can be cleared and settled within a few hours. The ultimate goal is to clear the cheques within the same day (when all the branches in the country are rolled out completely) irrespective of any location in Oman.
The Real Time Gross Settlement System (RTGS), introduced in September 2005, now forms the core of National Payment Systems being implemented by the CBO and contributes to the efficient operation of the financial system in the Sultanate.
Al Zadjali said it has enabled the banks to effect risk-free, electronic, credit-push fund transfers on their own behalf and on behalf of their customers, speedily and efficiently on a real-time basis and with finality.
With RTGS banks are able to continuously settle and view their balances through out the day, and are in a better position to manage their funds and cash flows.
The introduction of RTGS has resulted in compliance with the Bank for International Settlements (BIS) Core Principles for Systemically Important Payment Systems.
Both RTGS and ACH work as the backbone of the financial industry and facilitate electronic transfer of funds, adding safety, security and efficiency in the operations. There is potential for the banks to implement Straight Through Processing (STP) in their activities involving larger volumes as it results in quick processing, fewer errors in the absence of human intervention and reduced transactional cost.
STP could be interlaced with facilities such as ATM, on-line banking, phone banking, and mobile banking.
Commenting on how digital technology has changed banking sector operations at the national and individual levels in Oman, Al Zadjali said, "No other sector has benefited from IT to such a large extent as the banking sector in particular with the adoption of digital technology.
Overall, technological innovation has brought about the speedy processing and transmission of information, wider networking and enhancement of customer access and awareness. IT development has changed the product range, product development, service channels and type of banking services with significant efficiencies in the banks.
The adoption of digital technology has enabled banks to provide more diversified and convenient financial services, even without adding physical branches.
The development of Internet services has facilitated banking services to customers, anywhere at anytime.
The reliability of the products and services are assured to a large extent by the implementation of robust systems with adequate redundancies and dependable business continuity plans by banks.
There's "Anywhere Banking" through Core Banking Systems, "Anytime Banking" through new 24/7/365 delivery channels such as ATMs, Net and Mobile Banking.
In addition, IT has enabled the efficient, accurate and timely management of the increased transaction volume that comes with a larger customer base.
The CBO chief said, "Information technologies and the innovations they enable are strategic tools for enhancing the value of customer relationship.
They reduce the costs of financial transactions, improve the allocation of financial resources and increase the competitiveness and efficiency of financial institutions".
It has been widely accepted that technology holds the key towards operational efficiency of any organisation today.
It has been observed that many new processes, products and services offered by banks are centred on large scale technology implementation.
However, the technology needs to be properly integrated with sound business processes, and that requires some levels of Business Process Re-engineering.
Banks should strive for business excellence with optimum use of technology adoption.
By doing Business Process Re-engineering and implementing Straight Through Processing (STP) wherever possible, the banks can enhance operational efficiencies and increase productivity.
The banks can innovate and offer value added services (innovation) and earn significant non-interest income through various fees and other charges.
MUSCAT -- During the year 2009, the number of transactions handled by Automated Clearing House (ACH) system grew by 79 per cent compared to the previous year.
"We expect that a similar pace of growth will be witnessed during 2010", said Hamoud bin Sangoor al Zadjali (pictured), Chief Executive, Central Bank of Oman, in comments to the Observer. The potential users have started realising the benefits that ACH system offers.
The number of transactions handled by ACH started modestly but had been growing steadily.
Automated Clearing House (ACH) system, introduced in September 2006, has resulted in several benefits for the banks and their customers such as: operations cost saving in mailing, banking and reconciliation; economic way to process payments. Saves times and resources; reduced use of cash and cheques; reduced clearing time for retail payment; save trip between sender and destination customers; and more safe and efficient National Payment System to retail customers.
Electronic Cheque Clearing (ECC) service introduced by the CBO in January 2009 also offers ample scope for the banks to improve their operational efficiencies and customer services.
High value and urgent cheques can be cleared and settled within a few hours. The ultimate goal is to clear the cheques within the same day (when all the branches in the country are rolled out completely) irrespective of any location in Oman.
The Real Time Gross Settlement System (RTGS), introduced in September 2005, now forms the core of National Payment Systems being implemented by the CBO and contributes to the efficient operation of the financial system in the Sultanate.
Al Zadjali said it has enabled the banks to effect risk-free, electronic, credit-push fund transfers on their own behalf and on behalf of their customers, speedily and efficiently on a real-time basis and with finality.
With RTGS banks are able to continuously settle and view their balances through out the day, and are in a better position to manage their funds and cash flows.
The introduction of RTGS has resulted in compliance with the Bank for International Settlements (BIS) Core Principles for Systemically Important Payment Systems.
Both RTGS and ACH work as the backbone of the financial industry and facilitate electronic transfer of funds, adding safety, security and efficiency in the operations. There is potential for the banks to implement Straight Through Processing (STP) in their activities involving larger volumes as it results in quick processing, fewer errors in the absence of human intervention and reduced transactional cost.
STP could be interlaced with facilities such as ATM, on-line banking, phone banking, and mobile banking.
Commenting on how digital technology has changed banking sector operations at the national and individual levels in Oman, Al Zadjali said, "No other sector has benefited from IT to such a large extent as the banking sector in particular with the adoption of digital technology.
Overall, technological innovation has brought about the speedy processing and transmission of information, wider networking and enhancement of customer access and awareness. IT development has changed the product range, product development, service channels and type of banking services with significant efficiencies in the banks.
The adoption of digital technology has enabled banks to provide more diversified and convenient financial services, even without adding physical branches.
The development of Internet services has facilitated banking services to customers, anywhere at anytime.
The reliability of the products and services are assured to a large extent by the implementation of robust systems with adequate redundancies and dependable business continuity plans by banks.
There's "Anywhere Banking" through Core Banking Systems, "Anytime Banking" through new 24/7/365 delivery channels such as ATMs, Net and Mobile Banking.
In addition, IT has enabled the efficient, accurate and timely management of the increased transaction volume that comes with a larger customer base.
The CBO chief said, "Information technologies and the innovations they enable are strategic tools for enhancing the value of customer relationship.
They reduce the costs of financial transactions, improve the allocation of financial resources and increase the competitiveness and efficiency of financial institutions".
It has been widely accepted that technology holds the key towards operational efficiency of any organisation today.
It has been observed that many new processes, products and services offered by banks are centred on large scale technology implementation.
However, the technology needs to be properly integrated with sound business processes, and that requires some levels of Business Process Re-engineering.
Banks should strive for business excellence with optimum use of technology adoption.
By doing Business Process Re-engineering and implementing Straight Through Processing (STP) wherever possible, the banks can enhance operational efficiencies and increase productivity.
The banks can innovate and offer value added services (innovation) and earn significant non-interest income through various fees and other charges.
By Hasan Kamoonpuri
© Oman Daily Observer 2010
