Tech-help to track your money

Thirty years ago, Carl Sagan wrote Broca's Brain: Reflections on the Romance of Science, in which he said: "We are thinking beings... the contemplation of science and technology permits us to exercise our intellectual faculties to the limits of our capabilities." Not a Sagan fan? Well, how many dozens of Hollywood flicks have you seen, where the villain demands a million dollars to be paid by the close of the day and flips open his laptop to check if the money has been transferred to his numbered Swiss account?

That, if you will, is the result of human intellectual faculties contemplating technology. Not Hollywood, but the mere fact of anyone being able to check his account balance online at any time.

For too long, banking has been seen as a boring, terrifyingly dull industry, which consumes reams and reams of paper because bankers are fuddy-duddies who don't use computers. No longer. Banks have taken stupendous strides in convenience and speed in the form of advanced, hi-tech services. From dusty files in dingy offices, to the era of ATMs to Internet banking, you may think you've seen it all. But, as the poet said, the best is yet to be.

The advance of technology is relentless and like every other sector in any economy, banks can rely on technology to offer better, faster and safer services. There is no end to the potential. We take a look at the next level of technology usage by banks that will become widespread in the next one to three years.

Transaction alerts. For about a year now, banks have been sending SMS and e-mail messages to customers every time their account (savings or current) sees a debit or credit. ICICI Bank, HDFC Bank and ABN Amro Bank started offering these text and e-mail alerts to customers a year or so ago.

So, you receive an alert every time there is a debit in your account. This could be a cash withdrawal from an ATM or bank branch, clearance of a cheque issued by you to someone else, Internet-based transfer of money from your account to any other account, purchase on your debit card, or an automatic transfer of funds from your account to your mobile phone company, utility company, broker, depository participant or credit card-issuing bank as payment of your dues.

The bank will also send you an alert when there is a credit in your account, for instance, when a cheque you have deposited gets cleared, you deposit cash through a branch or ATM, your salary is directly credited in your account, or there is a direct electronic transfer of funds into your account from your broker, dividend-issuing company, or interest-issuing small savings government body.

Why alerts matter. Today, to find out what is happening in your account, you have to log on to your bank's website's netbanking module, call up the bank's call centre or make a trip to the branch or ATM. Knowledge of any activity - more so in the case of debits - can only be beneficial to you if you know about the debit or credit activity in your bank account as soon as it happens.

That's because there may be times when delayed information can put you through insufferable inconvenience or even a monetary loss. Milind Pendharkar, a finance professional in Vashi (Navi Mumbai), faced this predicament recently when his debit card was erroneously swiped twice at a restaurant. His bank, like a majority of banks, has not yet started offering transaction alerts. Says Pendharkar: "Had an SMS-based alert come on my mobile phone I would have been able to rectify the problem immediately."

As things turned out he discovered this mistake much later (after seeing a double entry in his card statement) and despite his attempts to get the bank or the restaurant to reverse the entry, he was not successful. He is still trying. His food bill was Rs 2,500 but he has ended up paying Rs 5,000.

It is to offer a handy tool to take quick action in such situations that banks can offer the alerts. Says C N Ram, head-information technology, HDFC Bank: "The basic use of a savings account is for transactions, but very often you don't know how much debit or credit is happening, particularly in the case of joint accounts. Through our transaction alerts, you can catch any misuse before it is too late."

Bank customers, of course, are aware of how useful these alerts can be. Says Ajit Mhatre, an architect with a construction company in Mumbai, who banks with Bank of Baroda, another bank that does not offer such alerts: "Mobile phone alerts are a good system for feedback on the transactions in my account. Today, I come to know my account details only when I update the passbook when I visit the bank, which is at the bottom of my priority list of things to do!"

Types of alerts. The three banks that offer text and e-mail alerts today have proven software development capabilities, which have enabled them to be first in offering these services. This is similar to the scenario some five or six years back when these banks were the first to offer netbanking; others followed suit only one to four years later.

While it's all very well to hail these banks as innovators and path breakers, it is also important to know what they offer, and how these offerings differ (See table: Get Alerted). While all of them provide transaction alerts, the ability to set amounts vary. Further, some provide alerts even on deposit maturity.

What is most important is how soon you get these alerts. ICICI Bank's alerts on transactions are instantaneous whereas HDFC Bank's alerts take some 12 hours to reach your mobile phone or e-mail inbox.

The technology. These differences do not take away the usefulness of the service. So, why have more banks not started taking advantage of the fact that they can send such alerts? It cannot be cost.

V Vaidyanathan, senior general manager, ICICI Bank, says, "From our point of view, through transaction alerts we can reduce the number of customers making calls to us to check balances, and every call to us is a cost." So, they are actually saving money.

In technical parlance, the technology behind the alerts feature is called push technology. Anup Bagchi, general manager, ICICI Bank, explains, "Before this, we offered - and which we still offer - pull technology features where you log in on netbanking or send an SMS to us, and you would get your transaction details. Through the new method, we are pushing the transaction information from our system to the customer's mobile or e-mail."

And that's possibly the reason why other banks might take time to offer you this benefit. Push technology is more complex and tech-intensive than pull technology. It involves continuous real-time networking of different components (central network, ATMs, web servers, cellular service providers) and there is a heavy flow of transactions.

Bagchi says, "The system has to connect to back-end on real-time basis. It has to keep triggering alerts, generating them, sending them out to customers' phones or emails and all the while it has to keep a receipt for the bank's record."

Surprisingly, the banks offering alerts on bank account transactions are yet to do the same on credit card transactions. Admits ICICI Bank's Bagchi, "The same push technology can be used for credit card transactions; we are toying with the idea of offering it on these as well."

HDFC Bank's Ram says, "The technology is advanced and there is no problem in introducing anything. If a lot of customers give us feedback that they want alerts on credit card transactions, we will offer it."

So, that's the secret behind getting your bank to offer more tech features and services. As the technology gets easier to use, we may see more customer-friendly initiatives such as these alerts. But even otherwise, nag your bank to make use of the technology available. You may be surprised at the result.