Business And Markets

Call for Integrated E-Banking Roadmap

Call for Integrated E-Banking RoadmapCall for Integrated E-Banking Roadmap

It is necessary to prepare an integrated roadmap for the qualitative and quantitative development of e-banking in Iran, according to a senior Iranian banker.

Underlining the necessity of involvement of banking and IT professionals in the process of devising the Sixth Five-Year Economic Development Plan, the CEO of Bank Tejarat, Ebrahim Moqaddam, said that, “It is necessary to diagnose the problems of previous measures and development strategies.”

The banker made the remarks at the first specialized conference on the situation of banking and information technology in Iran, which was held in Tehran on Sunday.

The role of banks and IT companies in devising the Sixth Economic Development Plan was discussed by officials attending the meeting.

CEOs and board members of public and private banks and the managers and experts from major IT companies attended the event, which was held at IRIB International Conference Center.

A banking roadmap should take all technical, legal, security, and cultural considerations into account, asserted Moqaddam, adding that at the same time, it is necessary to conduct precise need assessment surveys among customers, in line with the economic preferences of the nation.

“The sixth plan can and should include precise and functional goal-setting as to establish effective online communication among economic agencies like banks, insurance companies, tax organizations, customs, stock markets, etc. the CEO.

 Challenges Outlined

Speaking on behalf of the private banks, CEO of Pasargad Bank Majid Ghasemi outlined the challenges faced by banks in IT-related fields, and specifically in developing an effective banking system, while at the same time proposing a number of solutions to overcome the challenges, ISNA reported.

The first biggest challenge in the field of e-banking is how to attract and more importantly how to preserve expert human resources (EHR) in the field, said Ghasemi.

To overcome this problem, all the banks and IT companies must create a favorable atmosphere for meeting the needs of their employees, he proposed.  

The second challenge faced by banking, according to Ghasemi, is one related to engineering and security management.

“One way for dealing with this problem is that banks and IT firms increase the amount of money they allocate to training human resources in the field of IT security management,” he added.

 The CEO of Pasargad Bank also called for enhancing public awareness of e-banking advantages, the lack of which is another challenge in the way of e-banking development.

Ghasemi asked the media, schools and universities as well as academics to work together with banks in order to enhance public awareness in the field of banking IT services.

Another obstacle to the development of e-banking is the lack of appropriate investment in software engineering.

To deal with the problem, Ghasemi said that it is necessary to attract investments from all the possible sources.

“In line with our e-banking development objectives, we need to allocate more financial resources to buying the products and services produced by domestic IT companies,” said the banker.

 E-Banking Security

To enhance the performance of e-banking in Iran, it is necessary to establish an auditory organization for ensuring e-banking security, according to an official from the office of vice president for strategic planning and supervision.

“The mechanism for the new organization would be similar to that of the national audit organization,” said Hamid Pourmohammadi, who believes that the new E-Banking Security Auditory Agency can be run by the private sector, while working at the same time under the supervision of the Central Bank of Iran.

“The recent tide of distrust in e-banking services among the public must be reversed,” said Pourmohammadi.

Referring to establishment of an electronic council in the ministry of economic affairs and finance in 2004, Pourmohammadi said that the council was tasked with introducing IT services to the banking industry.

At the time the council was established, said Pourmohammadi, electronic transactions comprised only 0.3 percent of all banking transactions, adding that “this amount was set to reach 4 percent in the course of 10 years.”

Now, 10 years after the decision was made by the council, e-banking transactions make up for 70 percent of the total banking transactions, which is by far greater than the planned target, according to Pourmohammadi.

He also underlined the importance of e-banking in enhancing productivity, saying that in the Fifth Five-Year Economic Development Plan and Iran’s 20-Year Vision Plan, the productivity growth rate is projected to reach 2.5 percent by 2021, while the rate is going downward now.

The lowest rates are recorded for capital investment factors – those affecting the decisions surrounding capital investment projects, such as cost of capital or duration of investment, which must be weighed in order to determine whether an investment should be made, and if so, in what manner the investment is best made in order to maximize utility for the investor.

These negative rates indicate that resources are being wasted, said the official, who believes “electronic banking can play a significant role in filling the productivity gap.”

He said that the prevailing idea in formulating the Sixth Five-Year Economic Development Plan has been moving towards economic growth that is characterized by competitiveness, of which e-banking is a major component.

 Bounced Checks

The governor of the CBI said that by the end of current Iranian year (March 2015), a system will be accomplished for processing the bounced checks.

He said that at the moment between 17,000 to 20,000 checks bounce every day across the country.

Once the system comes into operation, however, the drawee can ensure whether the drawer of the check has issued bad checks before.

He said that the checks that are put in Chekavak checking system are convertible into money in all of bank branches.

Chekavak – literally meaning Lark, the name of a songbird — in Persian alliterates with the word check.