Many Bangladeshi companies currently distribute their images through the Internet to clients all over the world, but the monetary transactions take place through conventional means.  Some companies put messages on bulletin board, on ' internet yellow pages' with email links, and sometimes web pages, but there never is a place to submit a credit card.  This is because currently the government does not permit credit card charges over the internet.  However, the ISPs in Bangladesh do have the technology for e-commerce, and are anticipating governmental approval within the next year.

Prime Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.

Six categories of new products-Prime Bank’s looking for an Addition
In New Product Development process usually the possible product developments are:

a. New-to-the-world products
b. New product lines
c. Additions to existing service lines
d. Improvements and revisions of existing products
e. Repositioning
f. Cost reductions

Prime Bank has followed the Addition to their existing product lines. They have followed the responsiveness of the “In House Online Banking” to bring to the customers in this regard.  Also changing the motive of the innovation in their existing banking services could bring them a meaningful fruit to their operation.

Challenges in New - Product Development
Prime Bank has failed to get the market leading position for its delayed performance in the activities to get it to the highest possible position in the market. Elaborately meaningful contributions in the consumer mind can change the position of Prime Bank into a new place where it can show the consumers a new way to minimize the risk of their finance residing in the bank. The challenges Prime Bank could face are:

a. The product fails to gain sufficient distribution coverage or support.
b. Development costs are higher than expected.
c. Competitors fight back harder than expected.

New concept could lead the consumers to an unseen experience that they may not find comfortable. But for Prime Bank the introduction of new service will definitely bring benefit for both the customers and the bank itself. The experienced management has overcome all those issues in advance to avoid the failure of their possible new concept.

Managing the Development Process: Ideas
Step One: Idea Generation-Customers and Competitors have played the ‘Role’
One of our initiatives is to continuously upgrade the system with technological developments and industry standards. The Bank believes that technology will greatly help us to serve the customers better and streamline our cost of operation. Possible Idea generation boxes are as follows:

a. Customers
b. Scientists
c. Competitors
d. Employees
e. Channel members and
f. Top Management

The bank was being motivated by Customers and Competitors greatly. But the employees were playing a supportive role to implement a new banking system where they will have to use only single software to run their daily operations rather than multiple ones. This will definitely ease their operational complications they face daily.

Step Two: Idea Screening-IT got the highest priority
Maintaining the standard banking operations all banks are keen to receive IT as a helping entity to enhance their process of service. Prime Bank was not different in this case for resolving their burning issues to be solved professionally. The local banking system providers are now under process to develop centralized real time banking system. The Bank has observed that with previous system it is not possible to offer modern delivery channel like SWIFT, ATM and POS network, SMS banking, Internet Banking. Creating a banking system where the customers will be able to use any branch for their banking was the core concept. Also the issues the bank has followed to ease the operational complicacies were in frontier too.

Managing the Development Process:  Idea to Concept
Step Three: Concept Development and Testing-Customer Choice Dominated Mostly
The product idea for Prime Bank was to initiate a process where the consumers will be able to do transactions in most possible ways for their easy operational services. For that purpose the bank has got the idea as follows: “To allow consumers to do banking activities in most possible roaming way.”

Concept Development
Concepts have been developed to make a better deal with the consumers to serve them in a better way. Initially the bank generated two concepts which could make the journey possible and easygoing. The concepts are:
a. Concept 1: Allowing customers to receive all banking information in any branch along with the integrated service to use ATM over most possible outlets.
b. Concept 2: The banking service provided with online facilities to meet the clients’ requirements over online Internet kiosks or home.
Earlier concept sounded logical to the management to implement in the banking services along with the meaningful advanced services for the consumers.

Concept Testing
To test the possible services in the market Prime Bank was involved in dealing with two concepts. The concepts were logical and also very prosperous for the bank but it is not always possible to get the concepts to become true always. Initial concept was succeeded in the incubator to reach the process of generating goodwill in the banking service market. When the consumers were asked some possible benefits they want from the bank and the respondent were very frequent to indicate the online banking system to which the bank is heading to.

Rapid Prototyping
For initiating a service in a bank it is quiet impossible to build a prototype as does not have any existence of a product.

Virtual Reality
The bank was keen to establish a sample issue where the consumers were given chance to get the facilities of an online banking. They were happy to receive the instructions and chose the idea of staying in queue for less time.

Managing the Development Process:  Concept to Strategy
Step Four: Marketing Strategy Development-Was less focused issue

Availing a healthy marketing status has put Prime Bank to avoid this process to their new product development to enhance the customer relationship in this process. The essentiality of developing marketing strategy is not extremely necessary for this bank. Meaning the indication to meet the results of existing marketing practice in house could save them from spending excessive time in this regard. Constant response from these non-interest benefits have been motivated the management not to invest money and time in refining the existing marketing strategy for online banking. Putting full effort to the newly adopted IT services was more important to Prime Bank to establish their existing concept of ‘Customer service at an ease’. This has helped the bank to think about the location benefits of its branches in different localities in regional dividing of Bangladesh to provide their utmost service to the customers. Formulizing the customer beneficial steps could help the bank to think twice not to spend time in this step for their newly developed product supported by IT enabled services.

Managing the Development Process:  Strategy Building Blocks
Step Five: Business Analysis-Cost Minimized by Benefits
After management develops the product concept and marketing strategy, it can evaluate the proposal’s business attractiveness. For providing better and secured customer services through introduction of modern IT-based products through all of its branches, the Bank intends to purchase a centralized branch banking software including following  banking systems and processes:

a. Customer information system
b. Any Branch Banking
c. Commercial and corporate loans.
d. SWIFT/Telex/FAX interfaces
e. Fund Transfer
f. Merchant Banking
g. Tele banking
h. Mobile banking
i. ATM interface
j. Credit Card/Debit Card interface.

The Bank has already short-listed three vendors for providing software solution after going through a rigorous selection and evaluation processes. The status is such that one of the vendors could be selected from these three vendors after completion of site visit and financial negotiation.

After selection of software the Bank selected network infrastructure. Stabilization of software and network will take around 1 to 1½ years. Then the Bank will go for ATM switching system and ATM and POS network.

Estimated Total Sales
After the inauguration of this online banking service the expected growth of the banking will start to continue in several ways:
a. Consumer Banking
b. Merchant Banking
c. Inter Bank Transactions, etc.
The bank planned to get increased sales of their service at a sum of 5 million a year. This will increase at a rate of 5% per year for introducing the new concept in this regard.

The cost has incurred at this given rate:
Software Cost (10user/Branch X 20 Branch) USD 1.5 Million
Hardware for Head Office Data Centre USD 1.0 Million
Hardware for Branches    USD 0.6 Million
Total         USD 3.1 Million (Eqv., @ 70, Tk 21,70,00,000)

Break-even Analysis
Introduction of a new service bundled with existing services will not be able to get an idea of Break-even Analysis in this case.

Risk analysis
“In House Online Banking” as with traditional banking methods, security is a primary concern. At the Bank every precaution necessary to be sure that, the information is transmitted safely and securely. The latest methods in Online banking system security are used to increase and monitor the integrity and security of the system. The security of the Bank of Online banking application is addressed at three levels. The first concern is the security of customer information as it is sent from the customer's PC to the web server. The second area concerns the security of the environment in which the Online banking server and customer information database reside. Finally, security measures are in place to prevent unauthorized users from attempting to log into the online banking section of the web site.

Step Six: Product Development-Easing the Operation
In product development phase the relational criterion are:

a. Physical Prototypes – The R & D department developed one physical version of the service concept. Service logic design has been developed in this phase for opening new systematic operation of Prime Bank Limited.
b. Customer Tests –
i. Alpha testing: The service was introduced to the in house employees to generate some feedback. The feedbacks were then tested by the developers to give a firm position of the marketing process.
ii.  Beta testing: After the alpha testing, consumers were sent to a sample branch activity to get the idea of true online branch banking. Data were collected from the usage feedback of the consumers.

Managing the Development Process: Development to Commercialization
Step Seven: Market Testing-Hindrances made it fail

In product developmental process the consumers are given chances to test the service but the service is too sensitive to give it to the consumers to test for the initial time. Though the tests are possible like these:
a. Trial
b. First repeat
c. Adoption
d. Usage frequency
The consumers were closely monitored to get the information those who where choosing the online banking system and who were choosing the traditional system of banking. Four Major Method of Consumer service market testing:
i. Simulated Test Marketing
ii. Controlled Test Marketing
iii. Test Markets
a. How many test cities?: Only one branch was in the process to test the new version of the software. That is only one location was being tested in this process.
b. Which cities?: The Motijheel Branch was in the queue to test the consumer responses.
c. Length of test?: For 30 days the bank was under surveillance to test the service.
d. What information?: A sample counter was created to get the benefit of in House Online Banking system.
A sample team has been sent to India to be trained by the experts of the software developers. After finishing the training sample team had been deployed in the Motijheel Branch to start the sample kiosk to get the responses of the consumers in the branch to do banking.

Step Eight: Commercialization-The Final Process to Ignite Service
Usually Commercialization is the process to take the final steps to reach the market in a progressive way. In this regard, Prime Bank was developing the product to refine the whole banking service in a very quick and fabricated version. The bank has succeeded to get the attention of prolonged benefits from the market. In typical commercialization process, these steps are generally followed:
a. Launch the product
b. Produce and place advertisements and other promotions
c. Fill the distribution pipeline with product
Critical path analysis is most useful at this stage

a. When: Right after the testing process has been finished the service was introduced to the consumers of Prime Bank Limited. For Prime Bank the service was First Entry. From the text possible entries are:
i.  First entry
ii.  Parallel entry
iii.  Late entry
Whereas for the marker it is a late entry for existing competitors the use of online service is very common for them.
b. Where: All branches of Prime Bank have been covered under this facility to provide the benefit to all of its consumers.
c. To Whom: Existing and prosperous consumers were in the target of PBL to introduce the online banking system inside its house.
d. How: The media coverage has done to attract the customer attention.

The most important requirement for banking applications is that of Security, particularly if the customer interactions are to happen through an insecure channel like the Internet. The primary aspects of security in Internet Banking would be Authentication and Non-Repudiation apart from Privacy. It is also well known that only using Public Key Infrastructures and the features like digital signatures they offer needs can satisfy such a gamut of security. All the other tentative measures used like passwords. The biggest inter-banking initiative till date rides on a well-defined policy. Specific rules regulation from central bank and government regulation are necessary to defend financial institutes or Banks to strengthen their ability to prevent them when any party involved in a transaction denying after it took place.


1. Mr. Ariful Haque
First Asst. Vice President
Head Office 
Prime Bank Limited

2. Mr. Md. Golam Rabbi
Executive Officer
Head Office
Prime Bank Limited