Open Access Research Article
RECENT TRENDS OF BANKING SYSTEM IN INFORMATION TECHNOLOGY
Published Paper
Article Details
“RECENT TRENDS OF BANKING SYSTEM IN
INFORMATION TECHNOLOGY”
AUTHORED BY
- MISS. DIPIKA SATISH GUPTA
LL.M. 2ND,
Sem-4
Roll No. 11,
2023-2024
P.E.
SOCIETY’S, MODERN LAW COLLEGE
Abstract-
In the last few decades, the banking sector has witnessed
a series of important transformations. These days, the Indian banking system is
regarded as a well-developed and well regulated banking system throughout the
world. Today the banking industry is stronger and capable of withstanding the
pressures of competition. Internationally accepted prudential norms have been
adopted, with higher disclosures and transparency, Indian banking industry is
gradually moving towards adopting the best practices in accounting, corporate
governance and risk management. The
paper examines the new trends in the banking sector in India. The various
opportunities for banking sector have also been discussed. The paper also
discusses the Information Technology (IT) with regards to banking sector, as it
plays an important role in the banking sector. Further, the future prospects of
banking sector have been stressed upon.
CHAPTER 1 INTRODUCTION
Banks are the oldest, biggest and fastest growing
financial sector in India. Banks meets the needs of farmers, businessman,
entrepreneurs, Government and other segments of the society. Banks provide the
contribution to the economic growth of a country by mobilizing the financial
resources for productive purposes. Banking is the process or activity used by
the banks for providing services to the customers. The banking industry in
India has a huge canvas of history. Bank accepts the deposits for the purpose
of lending or investment, withdrawal either by cheque, draft or otherwise. Now a day, Banks are using electronic mode
for providing better, efficient, frequent,
transparent, speedy services to customers. E-Banking or Internet banking is a
form of electronic bank that provides financial services for the individual
client by the means of internet. E-Banking provides benefits to consumers in
terms of ease and cost of transaction through internet, telephone or electronic
delivery.
With the reforms in 1991, the Indian banking sector has
witnessed an unprecedented growth. The major factors contributing to growth
are, increase in retail credit demand, proliferation of ATMs and debit cards,
decreasing NPAs due to Securitization, improved macroeconomic conditions,
diversification, interest rate spreads, and regulatory and policy changes. Certain trends like growing competition,
product innovation and branding, focus on strengthening risk management systems,
emphasis on technology have emerged in the recent past. The Banking sector has been immensely
benefited from the implementation of superior technology during the recent
past, almost in every nation in the world. Productivity enhancement, innovative
products, speedy transactions. and transfer of
funds, real time information system and efficient risk management are some of
the advantage derived through the technology.
India’s banking sector has made rapid strides in reforming itself to the
new competitive business environment. Technological infrastructure has become
an indispensable part of the reforms process in the banking system.
1.1 REVIEW
OF LITERATURE
Klinkerman (2000) Facing extremely intensive competition
from non-banking sector, the banking industry has adopted a more aggressive
approach to fight competitors for the financial services market share. For
example, a number of banks, especially some community banks, decided to provide
Internet access to their customers and becoming the dominant provider of local
Internet connection services for the local community, thus hoping to lock in
customers to their financial institution. Avasthi & Sharma (2001) have
analyzed in their study that advances in technology are set to change the face
of banking business. Technology has transformed the delivery channels by banks
in retail banking. It has also impacted the markets of banks. The study also
explored the challenges that banking industry and its regulator face. Arora
(2003) highlighted the significance of bank transformation. Technology has a
definitive role in facilitating transactions in the banking sector and the
impact of technology implementation has resulted in the introduction of new
products and services by various banks in India. Agboola (2006) observed that
payments are automated and absolute volume of cash transactions have declined under
the impact of electronic transaction brought about by the adoption of ICT to
the payment system particularly in the developed economies. Sobol and Cron
(2006) in the article named “Impact of information Technology on Indian banks”, conducted the study to find the
relationship between computerization and several measures of overall firm
performance. Three performance comparisons are presented: users versus
non-users of computers, three levels of usage, and class of computer usage.
Results indicate that computerization is related to overall performance.
Non-users tend to be small firms with about average overall performance. Shetty
(2006) in his study found that globalization in banking is based on four important
pillars viz. trade in goods and services; flow of capital and movement of human
beings across boundaries; harmonization of regulatory framework in different
countries; and developments in technology, particularly those in information technology.
1.2 OBJECTIVES OF THE STUDY
1.
To study the
recent trends in Indian Banking Industry.
2.
To highlight
various challenges faced by banks in the changing scenario.
3.
To study the
opportunities available for Indian Banking Industry.
4.
To study the role
of Information Technology in Indian Banking Industry.
1.3 RESEARCH METHODOLOGY
This study is based on the analysis of the changing
banking scenario in the India with the help of secondary data collection.
Sources of secondary data are banking books, annual reports of RBI, various
websites and research papers etc.
CHAPTER 2 FEATURES OF BANKINGINDUSTRY
These features have left the Indian banking sec- tor with
weaknesses and strengths. A big challenge facing Indian banks is how, under the
current own-ership structure, to attain operational efficiency suit- able for
modern financial intermediation. On the other hand, it has been relatively easy
for the public sector banks to recapitalize, given the increases in
nonperforming assets (NPAs), as their Government- dominated ownership structure
has reduced the con- flicts of interest that private banks would face. Public
sector banks are the backbone of the Indian economy, and now more than ever,
private players are entering the fray. This is good news for customers, who
will be offered a widening menu of savings and loan products and innovative
services like online banking: an introduction to easy transaction methods.
However, it is also good news for banks, as they will be forced to improve
their services and compete more aggressively to retain customers. The banking
sector in India has been undergoing transformation, driven by public sector
banks (PSBs). Banking is the process of storing money for future use, either in
cash or by investing it. Banks are where people get money from when they need
it to make payments or buy goods and services. Businesses can also borrow money
to grow or expand. Banks must have a wide network of branches across the country
and overseas to perform these functions effectively They must also be able to
keep their records safe in computerized databases that cannot be easily hacked.
Banks handle money and valuable items such as gold, silver, diamonds, and other
precious items. They accept deposits and make loans and payments to their
customers. They also provide credit cards, debit cards, checkbooks, etc.Banking
institutions are divided into three categories: Commercial Banks also referred
to as deposit banks - Mutual Funds, Central/State Governments Various Aspect of
Banking.
·
Public sector banks-
Public sector banks are the backbone of the Indian
economy, and now more than ever, private players are entering the fray. This is
good news for customers, who will be offered a widening menu of savings and
loan products and innovative services like online banking: an introduction to
easy transaction methods. However, it is also good news for banks, as they will
be forced to improve their services and compete more aggressively to retain
customers. The banking sector in India has been undergoing transformation,
driven by public sector banks (PSBs).
·
The Indian banking sector –
The Indian banking sector has been experiencing a wave of
change over the past decade. The growth in mobile banking and biometrics have,
to an extent, affected the traditional business models of banks. However, most
banks have shown tremendous resilience to these changes through adaptability
and innovation.the banking sector has become most relevant for everyone.
Through online banking, we can do our transactions from anywhere and at any
time. The Internet has made sending money and transferring funds from one
account to another at no cost. The government’s extensive recapitalisation
exercise of public banks over the years has also helped these lenders become
more self-sufficient. As public banks still dominate the Indian banking
landscape, the good health of these banks is of utmost importance for credit
and GDP growth. Banking sector’s outlook
·
The banking sector’s outlook
The banking sector’s outlook has improved, with asset
quality and growth metrics possibly looking at their best over the last decade.
The Reserve Bank of India (RBI), in its Financial Stability Report for June,
showed India’s gross net performing assets' ratio falling to a six-year low of
5.9% in March, highlighting the banking system’s rising ability to support economic growth.
CHAPTER 3 RECENT TRENDS IN BANKING
IN INDIA
The Indian banking industry has transformed itself in a
big way. The various new trends witnessed by banking sector are as follows:
Electronic Payment Services: Now-a-days
we witness some concepts like e-governance, e-mail, e-commerce, e-tail etc. In
the same manner, a new technology is being developed in US for introduction of
e-cheque, which will eventually replace the conventional paper cheque. India,
as harbinger to the introduction of e-cheque, the Negotiable Instruments Act
has already been amended to include; Truncated cheque and E-cheque instruments. Real Time Gross Settlement (RTGS): Real Time Gross Settlement system was
introduced in India since March 2004, through which electronics instructions
can be given by banks to transfer funds from their account to the account of
another bank. The RTGS system is maintained and operated by the RBI and
provides a means of efficient and faster funds transfer among banks
facilitating their financial operations. As the name suggests, funds transfer
between banks takes place on a „Real Time? basis. Therefore, money can reach the
beneficiary instantly. Electronic Funds Transfer (EFT): Electronic Funds
Transfer (EFT) is a system whereby anyone who wants to make payment to another
person/company etc. can approach his
bank and make cash payment or give instructions/authorization to transfer funds
directly from his own account to the bank account of the
receiver/beneficiary. Complete details
such as the receiver’s name, bank account number, account type, bank name,
city, branch name etc. should be furnished to the bank at the time of
requesting for such transfers so that the amount reaches the beneficiaries?
account correctly and faster. Electronic Clearing Service (ECS): Electronic
Clearing Service is a retail payment system that can be used to make bulk
payments/receipts of a similar nature especially where each individual payment
is of a repetitive nature and of relatively smaller amount. This facility is
meant for companies and government epartments to make/receive large volumes of
payments. Automatic Teller Machine (ATM):
Automatic Teller Machine is the most popular device in India, which enables the
customers to withdraw their money 24 hours a day 7 days a week. It is a device
that allows customer who has an ATM card to perform routine banking
transactions without interacting with a human teller. In addition to cash
withdrawal, ATMs can be used for payment of utility bills, funds transfer between
accounts, deposit of cheques and cash into accounts, balance enquiry etc. Point of Sale Terminal: Point of Sale Terminal
is a computer terminal that is linked online to the computerized customer
information files in a bank and magnetically encoded plastic transaction card
that identifies the customer to the computer.
During a transaction, the customer’s account is debited and the re tailor’s
account is credited by the computer for the amount of purchase. Tele Banking:
Tele Banking facilitates the customer to do entire non-cash related banking on
telephone. Under this device Automatic Voice Recorder is used for simpler
queries and transactions. For complicated queries and transactions, manned
phone terminals are used. Mobile Van
Banking: along with technological advancement, a whole bank side can compress
right laptop, which can be carried anytime by a method, there by developing a
many selections in cellular banking. Many banks
also have started mobile/motorbike banking. Lobby Banking:
Reception banking provides the a world-wide web banking kiosk, cell
phone banking, examine drop capability and ATM, all in a tailor created lobby,
such as premises. Pretty much, it implies machine, primarily based, staff- much
less banking where in every transactions are generally executed simply by self-managed
machines. Electronic Data Interchange (EDI):
Electronic Data Interchange is the electronic exchange of business
documents like purchase order, invoices, shipping notices, receiving advices etc.
in a standard, computer processed, universally accepted format between
trading partners. EDI can also be used to transmit financial information and
payments in electronic form. The banks
were quickly responded to the changes in the industry; especially the new generation
banks. The continuance of the trend has
re-defined and re-engineered the banking operations as whole with more customization through leveraging
technology. As technology makes banking convenient, customers can access
banking services and do banking transactions any time and from any ware. The
importance of physical branches is going down.
(1.) Internet:
Internet
is a networking of computers. In this marketing message can be transferred and
received worldwide. The data can be sent and received in any part of the world.
In no time, internet facility can do many a job for us.
It
includes the following:
·
This
net can work as electronic mailing system.
·
It
can have access to the distant database, which may be a newspaper of foreign
country.
·
We
can exchange our ideas through Internet. We can make contact with anyone who is
a linked with internet.
(2.) Society for Worldwide Inter-bank
Financial Telecommunications (SWIFT):
SWIFT, as a co-operative society was formed in May 1973 with 239
participating banks from 15 countries with its headquarters at Brussels. It
started functioning in May 1977. RBI and 27 other public sector banks as well
as 8 foreign banks in India have obtained the membership of the SWIFT. SWIFT
provides have rapid, secure, reliable and cost effective mode of transmitting
the financial messages worldwide. SWIFT is a method of the sophisticated
message transmission of international repute. This is highly cost effective,
reliable and safe means of fund transfer.
(3.) Automated Teller Machine (ATM):
ATM is an electronic machine, which is operated by the customer himself
to make deposits, withdrawals and other financial transactions. ATM is a step
in improvement in customer service. ATM facility is available to the customer
24 hours a day. The customer is issued an ATM card. This is a plastic card,
which bears the customer?s name. This card is magnetically coded and can be
read by this machine. Each cardholder is provided with a secret personal
identification number (PIN). When the customer wants to use the card, he has to
insert his plastic card in the slot of the machine. After the card is a
recognized by the machine, the customer enters his personal identification
number. After establishing the authentication of the customers, the ATM follows
the customer to enter the amount to be withdrawn by him. After processing that
transaction and finding sufficient balances in his account, the output lot of
ATM give the required cash to him. When the transaction is completed, the ATM
ejects the customer?s card.
(4.) Bank net:
Bank net is a first national level network in India, which was
commissioned in February 1991. It is communication network established by RBI
on the basis of recommendation of the committee appointed by it under the
chairmanship of the executive director T.N.A. Lyre. Bank net has two phases:
Bank net-I and Bank net-
3.1 Areas of Operation and
Application of Bank net:
·
The
message of banking transaction can be transferred in the form of codes from the
city to the other.
·
Quick
settlement of transactions and advices.
·
Improvement
in customer service-withdrawal of funds is possible from any member branch.
·
Easy
transfer of data and other statements to RBI.
(5) Phone Banking:
Customers
can now dial up the bank?s designed telephone number and he by dialing his ID
number will be able to get connectivity to bank?s designated computer. The
software provided in the machine interactive with the computer asking him to
dial the code number of service required by him and suitably answers him. By
using Automatic voice recorder (AVR) for simple queries and transactions and
manned phone terminals for complicated queries and transactions, the customer
can actually do entire non-cash relating banking on telephone: Anywhere,
Anytime.
(5.) Tele-banking:
Tele banking is another innovation, which provided the facility of 24
hour banking to the customer. Tele-banking is based on the voice processing
facility available on bank computers. The caller usually a customer calls the
bank anytime and can enquire balance in his account or other transaction
history. In this system, the computers at bank are connected to a telephone
link with the help of a modem. Voice processing facility provided in the
software. This software identifies the voice of caller and provides him
suitable reply. Some banks also use telephonic answering machine but this is
limited to some brief functions. This is only telephone answering system and
now Tele-banking. Tele banking is becoming popular since queries at ATM?s are now
becoming too long
(6.) Internet Banking:
Internet banking enables a customer to do banking transactions through
the bank?s website on the Internet. It is a system of accessing accounts and
general information on bank products and services through a computer while
sitting in its office or home. This is also called virtual banking. It is more
or less bringing the bank to your computer. In traditional banking one has to
approach the branch in person, to withdraw cash or deposit a cheque or request
a statement of accounts etc. but internet banking has changed the way of
banking. At present one can operate all these type of transactions on his
computer through website of bank. All such transactions are encrypted; using
sophisticated multilayered security architecture, including firewalls and
filters. One can be rest assured that one?s transactions are secure and
confidential.
(7.) Mobile Banking:
Mobile banking facility is an extension of internet banking. The bank is
in association with the cellular service providers offers this service. For
this service, mobile phone should either be SMS or WAP enabled. These
facilities are available even to those customers with only credit card accounts
with the bank.
(8.) NRI Banking Services:
This technology has been embraced in countries like India, USA, UAE, just
to mention but a few. Since many people go abroad to work, they have a need of
supporting their families. So technology has made it simple for them to send
money to their loved ones easily.
(9.) Anywhere Banking:
With expansion of technology, it is now possible to obtain financial
details from the bank from remote locations. Automated Teller Machines are
playing an important role in providing remote services to the customers.
Withdrawals from other stations have been possible due to inter-station
connectivity of ATM?s. The Rangarajan committee had also suggested the
installation of ATM at non-branch locations, airports, hotels, Railway
stations, Office Computers, Remote Banking is being further extended to the
customer?s office and home[1]
CHAPTER 4 CHALLENGES
Customer Satisfaction:
Today in sector customers are more value oriented in their services because
they have alternative choices in it. So that each and every bank have to take
care about fulfill of our customer’s satisfaction. To provide several personnel
services: The present times demands that banks to provide several services for which
they have to expanse in service, social banking with financial possibilities,
selective upgradation, computerization and innovative mechanization, better
customer services, effective managerial culture, internal supervision and
control, adequate profitability, strong organization culture etc. Therefore, banks
must be able to provide complete personal service to the customers who come
with expectations. Retail Lending:
Recently banks have adopted customer segmentation which has helped in
customizing their product folios well. Thus retail lending has become a focus
area particularly in respect of financing of consumer durables, housing, automobiles
etc., Retail lending has also helped in risks dispersal and in enhancing the
earnings of banks with better recovery rates. Indian Customers: The biggest
opportunity for the Indian banking sector today is the Indian customers. The
Indian customers now see to fulfil his lifestyle aspirations at a younger age
with an optimal combination of equity and debt to finance consumption and asset
creation. He represents across cities, towns and villages i.e. in rural areas.
Consumer goods companies are already tapping this potential is for the banks to
make the most of the opportunity to deliver solutions to this mark.
Technological challenges: It is due to lack of awareness regarding technology
that customers are not gaining momentum in its used. There is lack of proper
infrastructure for the installation of E-delivery channels.
Security problem: The main disadvantage of e-banking is the
security problems that surround it. It’s
fact that making transactions online possess a much bigger risk compared to
making transactions in a physical branch. This is due to hacking problems and
identity theft.
CHAPTER 5 OPPORTUNITIES
The various opportunities that the new trends bring for
the development of banking sector are mentioned below: Internet Banking: It is clear that online
finance will pick up and there will be increasing convergence in terms of
product offerings banking services, share trading, insurance, loans, based on
the data warehousing and data mining technologies. Anytime anywhere banking will become common
and will have to upscale, such up scaling could include banks launching
separate internet banking services apart from traditional banking
services. Retail Lending: Recently banks have adopted customer segmentation
which has helped in customizing their product folios well. Thus retail lending
has become a focus area particularly in respect of financing of consumer durables,
housing, automobiles etc., Retail lending has also helped in risks dispersal and
in enhancing the earnings of banks with better recovery rates. Rural area customers: Contributing to 70% of
the total population in India is a largely untapped market for banking sector.
In all urban areas banking services entered but only few big villages have the banks
entered. So that the banks should tap the rural market in the years to come.
Offering various Channels: Banks can offer so many channels to access their
banking and other services such as
ATM, Local branches, Telephone banking, mobile banking, video banking etc. to increase the banking business.
·
Other
Opportunities:
There are many
other opportunities in future in the field of Indian banking sector e.g. to enter
new business and new markets, to improve efficiency, to deliver high level of
customer services.
CHAPTER 6 INFORMATION TECHNOLOGY IN BANKING
Indian banking industry is going through IT revolution. A
combination of regulatory and competitive reason has led to increasing importance
of total banking automation in the Indian Banking Industry. Infrmation
Technology is basically used in two different ways in banking, firstly
in Communication and Connectivity and secondly in Business Process Reengineering.
Information technology enables sophisticated
product development, better market infrastructure, implementation of reliable
techniques for control of risks and helps the financial intermediaries to reach
geographically distant and diversified markets.
To compete in today’s economic environment, it is imperative for the
Indian Banks to adopt the latest technology. Banks not only need greatly
enhanced use of technology to the customer friendly, efficient and competitive
business, but they also need technology for providing newer products and newer forms
of services in an increasingly dynamic and globalize environment. Information
technology offers a chance for banks to build new systems that address a wide
range of customer needs including many that may not be imaginable today.
·
It is becoming
increasingly imperative for banks to assess and ascertain the benefits of
technology implementation. Banks should use technology with precautions and the
safety nets
·
The increasing use
of technology in banks has also brought up „security? concerns. To avoid any
pitfalls or mishaps on this account, banks ought to have in place a
well-documented security policy including network security and internal
security. The passing of the Information Technology Act has come as a boon to
the banking sector, and banks should abide such rules and regulations. An
effort should also be made to cover e-business in the country’s consumer
laws.
·
Some are investing
in it to drive the business growth, while others are having no option but to
invest, to stay in business. The choice of
right channel, justification of IT investment on ROI, e-governance, customer relationship
management, security concerns, technological obsolescence, mergers and
acquisitions, penetration of IT in
rural areas, and outsourcing of IT operations are the major challenges and
issues in the use of IT in banking operations.
The main challenge, however, remains to motivate the customers to
increasingly make use of IT while transacting with banks. For small banks,
heavy investment requirement is the compressing need in addition to their
capital requirements.
·
The banks may
have to reorient
their resources in the form
of reorganized branch networks, reduced manpower, dramatic
reduction in establishment cost, increasing the skills of the staff and
innovative ways of attracting talented managerial pool. The Government of India
and the Reserve Bank of India (RBI) on their part would strengthen the existing
norms in terms of governing and directing the functioning of these banks. Banks
needs to strengthen their audit function. They would be evaluated based on
their performance in the market place
6.1 The
impact of technology in banking
As technology continues to advance at a rapid pace, the
banking industry has been quick to adopt new tools and techniques to enhance
the customer experience, increase efficiency, and improve security. From mobile
banking to blockchain, technology is changing the way we interact with
financial institutions and manage our money.
One of the most significant impacts of technology in
banking is the rise of digital banking. With the widespread use of smartphones
and the internet, banks have developed mobile apps and online platforms that
allow customers to perform a range of financial transactions from the comfort
of their own homes. This has made banking more convenient and accessible than
ever before, enabling customers to check their account balances, transfer
funds, and pay bills with just a few clicks.
Another area where technology is making a big impact is
in the fight against fraud and cybercrime. Banks are investing heavily in
cybersecurity measures to protect against cyberattacks and data breaches, and
are using advanced analytics and machine learning to identify and prevent
fraudulent activity. This not only protects customers' money and personal information
but also helps to maintain the integrity of the financial system as a whole.
Blockchain is another technology that is starting to have
a major impact on banking. By providing a secure, decentralized ledger of
transactions, blockchain has the potential to reduce costs, increase
transparency, and improve the speed and efficiency of financial transactions.
This is particularly relevant for international transactions, where blockchain
can eliminate the need for intermediaries and reduce settlement times from days
to just minutes.
Overall, technology is transforming the banking industry in
a multitude of ways, from improving customer experiences to increasing security
and reducing costs. As new technologies continue to emerge, we can expect to
see even more innovation in the financial sector in the years to come[2]
CHAPTER 7
ROLE OF IT IN BANKING SECTOR
As
Information Technology (IT) advances, the banking industry continues to change.
In recent years, the incorporation of IT has fundamentally changed the way
banks run, converting conventional banking procedures into highly effective and
client-focused platforms. This abstract seeks to give a thorough overview of
the important role information technology plays in the banking industry.
Information Technology has significantly increased the
operational effectiveness of banks. Automation has greatly decreased manual
labour, minimised errors, and increased overall productivity for regular jobs
including account administration, transaction processing, and document
verification.
Secondly, information technology has revolutionized
customer interactions and experiences in the banking sector. Internet banking,
mobile banking applications, and digital payment solutions have empowered
customers with round-the-clock access to their accounts, enabling transactions,
bill payments, and fund transfers at their convenience. Furthermore, IT has
facilitated the development of personalized services by analyzing customer
data, allowing banks to offer tailored products and recommendations, thereby
strengthening customer relationships and satisfaction.
Moreover, IT has contributed to enhancing the security
and risk management practices in the banking sector. Advanced security measures,
including encryption, biometric authentication, and real-time fraud detection
systems, have been integrated into banking systems to protect customer data and
prevent unauthorized access. IT-driven analytics and predictive models enable
banks to assess credit risks, detect potential fraudulent activities, and
ensure compliance with regulatory frameworks, thereby safeguarding the
financial interests of customers and the stability of the banking industry.
Finally, the adoption of emerging technologies, such as
artificial intelligence, blockchain, and big data analytics, presents immense
opportunities for the banking sector. AI-powered chatbots and virtual
assistants offer personalized customer support, while blockchain technology
ensures secure and transparent transactions. Big data analytics enables banks
to derive valuable insights from vast amounts of data, facilitating data-driven
decision-making and driving innovation.
On the whole information technology has become an
indispensable part of the banking sector, revolutionizing operations, enhancing
customer experiences, ensuring security and risk management, promoting
financial inclusion, and unlocking opportunities for further growth. As
technology continues to evolve, banks must adapt and harness the power of IT to
stay competitive and meet the ever-changing demands of customers in the digital
era.
7.1 INFORMATION
TECHNOLOGY CONSIDERATIONS -
Since the early
nineties, each Indian bank has done some IT improvement effort. The first and
foremost compulsion is the fierce competition. While deciding on the required
architecture for the IT consideration is given to following realities.
(1.) Meeting
Internal Requirement:
The
requirements of the banks are different individually depending upon their
nature and volume of business focus on a particular segment, spread of branches
and a like. Many a time?s banks do have the required information but it is
scattered. The operating units seldom know the purpose of gathering the
information by their higher authorities.
(2.) Effective
in Data Handling:
As
stated earlier the banks have most of the needed data but are distributed.
Further the cost of collection of data and putting the same to use is
prohibitively high. The accuracy and timeliness of data generation becomes the
causalities in the process. Best of the intentions on computerization are
wished away because there is no visible reduction in cost /efforts/time
required for the required data gathering.
(3.) Extending
Customer Services:
Addressing
to rising customers’ expectations is significant particularly in the background
of increased competition. In case bank A is unable to provide the required
service at a competitive price and in an accurate manner with speed. There is
always a bank IT at its next-door waiting to hire the customer. Awareness of
customers about the availability of services and their pricing as also
available options have brought into sharp focus the issue of customer
satisfaction.
(4.) Creative Support for New Product
Development:
It
has become necessary for the banks to vitalize the process of product
development. Marketing functionaries needs a lot of information not only from
the outside sources but also from within the banks. Banks are looking to retail
segment as the future market places for sales efforts. Having full-fledged
information of existing customer is the key for this purpose. The emergences of
data requirement and an appropriate architecture to support the same are
significant issues to be handled in this regard.
(5.) End-user
Development of the Non-Technical Staff:
Banking
being a service industry, it is the staffs at counters that deliver the
products. In Indian scenario, virtual banking is likely to have a few more
years to establish. The dependence on counter staff is unavoidable. The staffs
are large in number and the majority is non-technical. The customer
satisfaction levels at the counter determine the ultimate benefit of IT
offensive. Giving due consideration to this aspect in choosing architecture in
necessary.
7.2 BENEFITS
OF IT
Information
Technology enables sophisticated product development, better market
infrastructure, implementation of reliable techniques for control of risks and
helps the financial intermediaries to reach geographically distant and diversified
markets. Internet has significantly influenced delivery channels of the banks.
Internet has emerged as an important medium for delivery of banking products
and services. The customers can view the accounts; get account statements,
transfer funds and purchase drafts by just punching on few keys. The smart
card's i.e., cards with microprocessor chip have added new dimension to the
scenario. Collection of Electricity bills and telephone bills has become easy.
No doubt banking services have undergone drastic changes and so also the
expectation of customers from the banks has increased greater.
7.3 E-BANKING
E-banking made its
debut in UK and USA 1920s. It becomes prominently popular during 1960, through
electronic funds transfer and credit cards. The concept of web-based baking
came into existence in Europe and USA in the beginning of 1980. Only in the
early 1990s has there been a start in the non-branch banking services. Many
banks have modernized their services with the facilities of computer and
electronic equipment's. The electronics revolution has made it possible to
provide ease and flexibility in banking operations to the benefit of the
customer. The e-banking has made the customer say good-bye to huge account
registers and large paper bank accounts. The e-banks, which may call as easy
bank offers the following services to its customers:
·
Credit Cards/Debit Cards
·
ATM
·
E- Cheque
·
DEMAT Accounts
·
Mobile Banking
·
EDI (Electronic Data Interchange)
7.4 BENEFITS
OF E-BANKING:
1. Customer:
·
Anywhere Banking -no matter wherever the
customer is in the world. Balance enquiry, request for services, issuing
instructions etc., from anywhere in the world is possible.
·
Anytime Banking - Managing funds in real time
and most importantly, 24 hours a day, 7days a week.
·
Convenience acts as a tremendous psychological
benefit all the time.
·
On-line purchase of goods and services including
online payment for the same.
2. Bank:
·
Innovative, scheme, addresses competition and
present the bank as technology driven in the banking sector market
·
Reduces customer visits to the branch and
thereby human intervention
·
Inter-branch reconciliation is immediate thereby
reducing chances of fraud and misappropriation
·
On-line banking is an effective medium of
promotion of various schemes of the bank, a marketing tool indeed.
·
Integrated customer data paves way for
individualized and customized services.
CHAPTER 8 TECHNOLOGY AND INNOVATIONS
IN BANKING
Technology
has opened up new markets, new products, new services and efficient delivery
channels for the banking industry. The various technological platforms provided
by the banks to its customers bring greater flexibility and operational
convenience by providing computerised banking environment. Major technology and
innovation banking sector in India are:
·
APPLICATIONS
PROGRAMMING INTERFACE(API)
·
Innovation Labs
·
UPI
·
Digital Wallets
·
Wearable
Technology
·
The 3 Big B’s
·
Real time gross
settlement(RTGS)
·
National
Electronic Funds Transfer (NEFT)
·
Electronic fund
transfer
·
Point of sale
(POS)
·
Electronic
Clearing Service (ECS)
CHAPTER 9 APPLICATIONS PROGRAMMING INTERFACE(API)
An API
(Application Programming Interface) is an interface that allows to synchronize,
link and connect the database of service with any application. Their
implementation in the banking system is basically the same: they link a bank’s
database (its customers’ information) with different applications or programs,
thus forming a network encouraging the promotion of services, payments, and
products appropriate to each person. Its benefits range from cost reduction,
optimization of services, reduction of time spent on transactions, increased
revenue and facilitation in all the needs of those who accept it.
v
Innovation Labs:
Many banks have
adopted proactive strategy by establishing their own internal innovation labs.
Innovation labs operate with the primary objective of evaluating and adopting
emerging technologies and contribute to bank?s motive of digitalization. Eg:
AXIS Bank has set up its Innovation Lab named Thought Factory
v UPI
:
National Payments
Corporation of India (NPCI) launched Unified Payments Interface (UPI) in 2016
with 21 member banks. UPI is a system that powers multiple bank accounts into a
single mobile application, merging several banking features and seamless fund
routing. UPI has been considered as the revolutionary product in payment
system. Example: BHIM app, Google Tez, Paytm,SBI Pay, BOB UPI, Axis Pay
v Digital Wallets:
Digital Wallets
allow an individual to make electronic transactions using a smartphone.
Awareness and use of e-wallets increased post demonitisation in India. It is
indeed one step towards “less cash” economy. Example: mRupee, ICICI Pockets, HDFC
PayZapp, Citi MasterPass, YONO SBI v Wearable Technology : “To wear your bank on your wrist”
is a reality today. Smart watch banking helps the customers check their balance,
get fraud alerts, carry out both financial and information transactions and
offers many more services, all on their wrist. In India, ICICI has launched an
app named iWear for all smart watches. ICICI is among few global players
allowing transactions using this app on both Apple and Android platforms. As
technology is redefining banking, wearable banking and transactions via smart
watches and smart glasses is gearing up as a key trend
·
The 3 Big B’s :
The 3 Big B?s
prominently trending today in Indian banking sector are Biometrics, Blockchain
and Big Data Analytics.
1)
Biometrics:-
Biometrics
technology makes use of biological data and behavioural characteristics that
differentiates one human being from another. Biometrics is secure and cost effective
method for authentication process of the customers of the bank. It eliminates
the burden of remembering passwords, PINs and card numbers. Biometrics
application in banking sector
2) Blockchain:-
A
blockchain is a data structure that is used to create a digital ledger of
transactions and share it among a distributed network of computers. The
underlying principle used is cryptography, wherein each participant on the
network is allowed to manipulate the ledger in a secure way without the need
for a central authority. Present day applications in India In October 2016,
ICICI Bank carried out India?s first international trade transaction and
overseas remittances using blockchain technology. ICICI partnered with Dubai?s
largest bank Emirates NBD for this project. AXIS Bank and YES Bank too are
working on blockchain technology.
3)
Big Data Analytics :-
Big
Data are said to be extremely huge data set that has to be analysed, handled,
managed and validated through typical data management tools. Indian banks have
millions of customers. The data of these customers is stored in the database.
Retrieving the data in meaningful manner becomes a complex process as many
times the data collected is unorganized. Big Data Analytics helps in resolving
this problem. To achieve competitive edge in today?s modern banking era, banks
in India are using data analytics to attract new customers, retain them and
make the entire process consumer centric.
v Real
time gross settlement(RTGS):
Real time gross
settlement is a fund transfer system. Settlement in “real time” means the
transactions happen almost immediately “grosssettlement “means transaction is
settled one to one basis. This is mainly used for transaction which high in
value and need to be cleared immediately. Real Time Gross Settlement system,
introduced in India since March 2004, is a system through which electronics
instructions can be given by banks to transfer funds from their account to the
account of another bank. The RTGS system is maintained and operated by the RBI
and provides a means of efficient and faster funds transfer among banks
facilitating their financial operations.
v
National Electronic Funds Transfer (NEFT):
According to
Reserve Bank of India, National Electronic Funds Transfer (NEFT) is a
nation-wide payment system to facilitate one-to-one funds transfer. Under NEFT,
individuals, firms and corporates can electronically transfer funds from any
bank branch to any individual, firm or corporate having an account with any
other bank branch in the country participating in the Scheme. The funds under
NEFT can be transferred by individuals, firms or corporates maintaining
accounts with a bank branch. Even individuals not having a bank account can
deposit cash at the NEFT-enabled branches with instructions to transfer funds
using NEFT. However, such cash remittances will be restricted to a maximum of
Rs.50, 000/- per transaction. Such walk-in-customers have to furnish full
details including complete address, telephone number, etc. NEFT, thus, also
help in transfer of funds even without having a bank account. This is a simple,
secure, safe, fastest and cost effective way to transfer funds especially for
Retail remittances.
v
Electronic fund transfer:
It is a system of
transforming money from one bank account direct to another without any paper
money charging hands. Direct deposits are one of the most widely used EFT
program. It refers transfer of funds initiated through on electronicterminal,
including credit cards, ATM, and point of sale transactions. It used for both
credit transfer and debit transfer. Electronic fund transfer transactions are
processed through the automated clearing house network. The growing popularity
of EFT for online bill payment in paying the way for paperless universe where
checks, stamps, envelops, and paper bills are obsolete. Through EFT
administrative costs should be reduced, increase efficiency, simplified
bookkeeping and greater security.
v
Point of sale (POS):
Point of Sale
Terminal is a computer terminal that is linked online to the computerized
customer information files in a bank and magnetically encoded plastic
transaction card that identifies the customer to the computer. During a
transaction, the customer's account is debited and the retailer's account is
credited by the computer for the amount of purchase.
v Electronic
Clearing Service (ECS):
Electronic
Clearing Service is retail payment systems that can be used to make bulk
payments/receipts of a similar nature especially where each individual payment
is of repetitive nature and of relatively smaller amount. This facility is
meant for companies and government departments to make/receive large volumes of
payments rather than for funds transfers by individuals.
CHAPTER 10 IMPACT OF
FINTECH IN BANKING
10.1 What is Fintech?
Fintech is an
umbrella term for any technological
innovation in financial services. It includes various financial
services like mobile payments, online banking, and peer-to-peer lending.
Fintech companies are often startups that use technology to provide financial
services more efficiently and cost-effectively.
The term Fintech
refers to the use of technology to provide financial services to customers.
It can range
from online banking
services to mobile payment platforms and digital currencies.
Fintech companies use cutting-edge technology to provide customers with
innovative financial services that are often faster, cheaper, and more
convenient than traditional banking services.
10.2
The Rise of Fintech
The rise of
Fintech has been fueled by several factors, which include the increasing use of
mobile devices, the rise of e-commerce, and the rising demand for faster and
more convenient financial services. Fintech companies have been able to
leverage these trends to develop innovative financial products and services
that are disrupting the traditional banking industry.
Fintech has been
on the rise for several years, and its growth shows no sign of slowing down.
In 2019, global
Fintech investments reached $135.7 billion, up from $111.8 billion in 2018. The
demand for more innovative financial services and the growing adoption of digital
technology drive this growth.
10.3
How is Fintech Disrupting Traditional Banking?
Fintech is
disrupting traditional banking in several ways:
First, Fintech
companies provide consumers with alternative ways to access financial services.
It includes mobile banking,
online banking, and peer-to-peer lending.
Second, Fintech
companies use technology to provide financial services at a lower cost. It is
because Fintech companies have lower overhead costs than traditional banks.
Third, Fintech
companies are providing consumers with more personalized financial services.
They use data analytics and artificial intelligence to analyze consumer
behavior and offer customized financial products and services.
10.4 Advantages of Fintech companies
Here are
three key advantages of Fintech companies:
1. Convenience and accessibility:
Fintech
companies often use digital channels to offer financial services, making it
easier and more convenient for customers to access and manage their finances.
Customers can perform transactions, such as making
payments, transferring funds, and checking account balances, from the
convenience of their own residences using computers or mobile devices.This
level of accessibility is especially beneficial for people who live in remote
locations.
2. Lower
operating costs:
Fintech companies
have lower operating costs than traditional financial institutions because they
don’t have to maintain physical branches or large staff teams. It allows them
to offer lower fees and interest rates to their customers. In addition, fintech
companies often use algorithms and automation to streamline their operations, minimizing
the need for manual labor and the possibility of human error.
3. Innovation
and customization:
Fintech companies
are often founded by entrepreneurs with technology backgrounds, allowing them
to approach financial services in new and innovative ways.
To enhance their
products and services, they continually experiment with new technologies such
as artificial intelligence and machine learning. can benefit from personalized
financial solutions tailored to their specific needs and preferences.
10.5 Impact
of Fintech on Traditional Banking
The rise of
Fintech has had a substantial impact on traditional banking. Fintech companies
have challenged the dominance of traditional banks, offering innovative financial products and
services that are often more convenient, faster, and cheaper.
As a result, traditional banks have been forced to adapt to new technologies
and improve their services to remain competitive.
One of the ways
that traditional banks have responded to the rise of Fintech is by investing in
new technologies and developing their digital banking services. It has enabled
traditional banks to offer customers various digital banking services,
including online banking, mobile banking, and digital wallets. Traditional
banks have also embraced data and analytics to provide more personalized
financial services to customers.
Another way that
traditional banks have responded to the rise of Fintech is by partnering with
Fintech companies.
By partnering with
Fintech companies, traditional banks can offer their customers access to
innovative financial products and services without developing them in-house. It
has enabled traditional banks to remain competitive while providing customers
with a broader range of financial services.
10.6
Challenges for Fintech Companies
While Fintech
companies are disrupting traditional banking, they also face several
challenges. One of the main challenges is regulation. Fintech companies are
often subject to less regulation than traditional banks, which can lead to a
lack of consumer trust.
Fintech companies
also need help with funding. While the amount of investment in Fintech is
growing, it is still concentrated in a few large companies. It means that
smaller Fintech companies may need help securing funding.
Financial technology's
(fintech) impact on conventional banking has been nothing short of
transformative. By providing different avenues for people and businesses to
obtain financial services, fintech firms and innovations have disrupted the
banking sector. Customer experience improvement is one of the most notable
effects. Fintech businesses have brought about user-friendly interfaces,
speedier account setup procedures, and 24/7 access to financial services via
smartphones and laptops. Due to this, conventional banks have been compelled to
modernize their digital systems and services in order to meet client
expectations.
Additionally, the
efficiency of financial transactions has grown dramatically as a result of
fintech. Digital wallets, peer-to-peer lending, and blockchain technology have
all expedited payment procedures, cut down on transaction fees, and minimized
the need for middlemen. As a result, traditional banks have been obliged to
review their charge schedules and consider how to maintain their
competitiveness in the face of less expensive fintech options.
Recognizing the
difficulties that fintech presents for conventional banks is necessary, though.
Given that fintech operations are increasingly worldwide, these institutions
must traverse a complicated regulatory environment to maintain compliance with
financial regulations and protect customer data. As more financial transactions
take place online, worries about cybersecurity and data privacy have also
increased.
Fintech has also boosted
competition, which could reduce traditional banks' profit margins. Traditional
banks are increasingly collaborating with or investing in fintech firms in
order to take advantage of their innovations and remain relevant in this
rapidly changing market.
In conclusion, fintech
has significantly improved traditional banking's accessibility, effectiveness,
and innovation, which has benefited customers. However, it has also brought
about issues with regulation, cybersecurity, and competition. The banking
sector's future performance in the fintech era will depend on how well it can
adjust to these changes.[3]
CHAPTER 11
AI: AN AID TO BANKING SECTOR
India's financial
sector relies heavily on technology. The Indian banking sector is testing with
AI to enhance client experience. The banking industry has embraced cutting-edge
technology in a variety of ways, from basic banking and payment systems to risk
management and, more recently, digital efforts. Artificial intelligence (AI),
as described by John McCarthy as "the science and engineering of making
intelligent machines," has been around for decades. Because of its vast
potential, its adoption has been dubbed the fourth industrial revolution. The
banking industry, in particular, is undergoing a digital change. The banking
business in India has evolved from a people-driven one to a machine-driven
model in recent years. Global spending on AI applications has surged from $4
billion in 2015 to 5.1 billion dollars presently, according to a 2017 PwC
Fintech India study. In the fields of business, management, operations, and
finance, the banking industry has discovered the usage of AI. If it is to keep
abreast of the competitive times and provide speedy services to its consumers,
the banking sector cannot remain unaffected by technology. AI is utilised for
personalised financial services, underwriting, smart wallets, voice aided
banking, application to assist in lending decisions, customer assistance, and
digitization, to name a few. More banks are embracing new technologies like
artificial intelligence (AI), cloud computing, and block chain to cut operating
costs and boost efficiency. The expansion and development of the AI business
will increase productivity while cutting prices. Emerging technologies such as
block chain and analytics are being eagerly anticipated by banks as a live
defence. Banks are incorporating artificial intelligence into their front, middle,
and back offices. The bank offices are a network of self-service terminals that
provide consumers with a variety of value-added e-services. AI can assist with
data structuring and sorting, as well as assisting the banking sector in
utilising data to better customer relationships. The impact of AI is
far-reaching and even individual customers profit from its use. Because of the
government's ambitions to drive India into a digital economy, AI is unavoidable
in the banking sector. This could only be realised if India's financial sector
made considerable use of AI. Artificial intelligence (AI) has emerged as a
major game changer in the Indian banking industry.
11.1 WHY IS
ARTIFICIAL INTELLIGENCE USED IN THE BANKING INDUSTRY?
Artificial
intelligence holds a lot of promise for the banking industry's advancement and
expansion.It automates and streamlines the working process. Here are some of
the most important reasons for banks to use AI:
In the banking
industry, there are numerous problems.
·
Extensive challenges in the banking sector.
·
Thrust for an activity that is based on
interaction.
·
Self-administration should be started in the
branches.
·
Reduce your workload.
·
Obtain substantial insights by collecting and analysing
relevant data.
·
Boost banking revenue
·
Systemize your risk management.
·
To lessen the odds of being a victim of fraud
·
Investing management
·
assisting consumers in making rapid and
productive decisions
·
Customers want a variety of personalised
solutions.
·
Employee productivity is increasing
·
To assist in concentrating on productivity and
efficiency.
·
With the use of modern techniques, visualisation
can be used to expand human potential.
11.2 ARTIFICIAL INTELLIGENCE IN BANKING –
This article will
be useful to bankers looking for an overview of AI practices in the banking
industry. AI in banking can be regarded as a technological advancement that
aided in the making of choices and decisions that required direct human
inclusion. The entirety of AI is supported by a series of vital and
interconnected technologies centred on machine learning and natural language.
Importantly, AI is about more than just improved innovation. It's not about
faster processing, more informational indices, or even a large number of
strictly implemented rules. These advancements have produced incredible
results; but they are now executing old tasks better. One of AI's main
strengths is its ability to respond probabilistically to legitimate sources of
input. The four main AI applications today are Analytics, Chatbots, Robotic
Process Automation (RPA), and Report Generation, which are based on the basic
breakthroughs and applied in a banking setting. The outline beneath portrays
the core AI connections between fundamental advances and banking applications,
all of which depend on huge measures of information, AI's backbone.
·
Drive-thru Banking Service -.
If you use this
service, the banking exchanges should be possible without getting out from the
vehicle. There is a way where the client can share data through a window. In
July 2018, Clinc, an Ann Arbor-based start-up that created voicecontrolled AI
platforms for banking sector in the year of 2015, volunteered to help with a
drive-through assembly. Its conversational AI development could understand
orders even if people spoke with a heavy accent or had language barriers, and
it could improve the dialogue. Bank Stations - Artificial intelligence can be
utilized at the front, centre, and administrative centres of banks. The bank
stations are a collection of self-service terminals that provide customers with
a wide range of important e-administrations, such as bill payments, government
e-administrations, and so on. Bid data is now the industry norm, and banks are
using it to revolutionise the sector. Artificial Intelligence is assisting the
organisation in coordinating the data, and the banking sector is using the data
to strengthen client relationships. To serve the e-age, AI is the fate of
banking. Passbook update kiosks – In recent years, the Indian banking sector
has advanced from a people-headed to a machine-driven model. A passbook
printing kiosk is a self-service machine that serving the clients. Banks named
State Bank of India and BOB, have done an outstanding job of introducing this
feature. They have introduced selfservice passbook counters, which allow
consumers to print their own passbooks. For example, Swayam (passbook printing
kiosk) is a service offered by Indian Bank, SBI that employs barcode technology
to allow clients to update their passbooks. Regardless of the way that banks
have been recruiting, the assortment of ranges of skill set is moving, with a
focus on front-end staff.
·
The
Intelligent Banking Assistant - Chatbots –
They
are innovative technologies that work as an answering machine and provide
constant service to customers. It is designed to make human-computer
interaction easier. They are examples of artificial intelligence in banking
that are replacing front-desk areas at banks. These Artificial Intelligence
-driven devices furnish clients with a next-generation digitised and customised
instinctive experience. SBI, an Indian bank, has created SIA (SBI Intelligent
Assistant), a chatbot that assists customers with routine financial tasks in
the same way that traditional bank staff do. It also answers NRI customers'
questions by providing answers via the SBI gateway's chat box. Chatbots aid
with basic tasks such as opening and cancelling accounts, transferring funds,
and so on. In comparison to a phone call, the chatbot gives the customer more
options by providing useful links for finishing the interaction. The chatbot
can also provide quick availability and help customer service representatives
minimise their workload. Cash Deposit Machines - Cash Deposit Machines are
self-aid terminals that permit you to put aside a cash deposit at any time.
This help takes out the need to stand by in huge lines at banks to deposit
cash. Each completed transaction generates a receipt for the customer. This
machine can also be used to make payments to various accounts.
·
ATM
Machine Helpline –
These
aid customers in contacting their banking firm in the event of a crisis, and
client services are also available at ATMs. In addition, AI has been shown in
ATMs. The following are the fragments that have been offered. Machine learning
in action includes AI for ATM security, machine vision ATM cameras, facial recognition
for security and improved client experience, ATM machine care, and analysing
ATM cash requests.
·
Mobile Banking –
Mobile
phones are becoming smarter all over the world. A major number of individuals
are dedicated to mobile banking services, and that implies that versatile
applications of banking appeal to them. Clients have promptly progressed to
phone banking services. Having a personal attendant, regardless of whether it's
Siri (Apple) or Alexa (Amazon) is delightful. Clients all across the world have
praised it and expressed their delight with it.
·
Banking
and Block chain Technology –
A
block chain is a distributed, decentralised, and sophisticated record. It is a
database of digital data that is open to the public. AI is the cerebrum or
motor that enables decisionmaking and aids in data analysis. Block chain
includes encoded information, and Artificial Intelligence is the intellect that
enables directing and controlling and assists in data analysis. Block chain
technology is beneficial to the digital currency sector; however this is not
the case. Data security, fraud prevention, and other challenges associated with
computerised transactions are addressed with block chain technology.
·
Algorithms based on AI and Fraud Detection
–
Algorithms
in light of artificial intelligence and Fraud Detection - Artificial
intelligence is based on problem solving operations. AI includes an assortment
of rules, guidelines, critical thinking activities that computers must obey. AI
uses behavioural indicators to make risk-reduction recommendations. Feedzai, a
data science start-up, for example, utilises algorithms to detect fraud. Algorithms
are used in artificial intelligence and machine learning systems to analyse
patterns and avoid financial fraud. Fraud detection has advanced and will
continue in the coming years.
11.3
BANKING SECTOR OVERVIEW AND ARTIFICIAL INTELLIGENCE APPLICATION IN STRATEGY
IMPLEMENTATION-
Significant recent
developments, such as demonetization and government supported efforts aimed at
establishing digital India, have pushed economy in India to go cashless, but
have also amassed a big amount of data in banks, needing quick, precise, and predictable
record upkeep. Automation has been the backbone of modern banking since the
1990s, and the banking industry has long considered computers to be a vital
part of its operations. Cash withdrawals, fund transfers, check book requests,
and so on are examples. Because of critical changes in the economy, like
expanded work volume, changes in purchaser inclinations, client mentalities,
destinations, populace development, contenders, managerial essentials, and the
need to have strong admittance to the executives and a safe financial climate
for trades, the financial area has started to utilize AI to digitise the dreary
labour-intensive operations. As a result, traditional branch banking has been
changed into internet banking. The objective of 'Advanced India' is to change
India into a carefully empowered and informed economy. Technological
advancements in computing, storage, mobile phones, and widespread usage of
social media are assisting and supporting this movement. 'Digital India' aims
to transform India into a digitally enabled and informed economy. Organizations
are heavily reliant on interconnection, computerization, machine learning, and
continuing data processing in this era of change to combine actual
creation/administrations with advanced innovations. This shift is alluded to as
Industry 4.0, or the fourth modern revolution. It is a perfect platform for
integrating digitalized advancements, such as artificial intelligence, with
banking duties, which provides Banks with significant opportunities for profit
while also reducing reaction time for their customers. As a result, both
customers and banks will become increasingly interested in using AI to enable
more productive, rapid, and unbroken processes. Whenever innovation is
appropriately made due, it advances an adjustment of status, progress, and a
greater for conveying services.[5]
CHAPTER 12
CONCLUSION
The banking today is
re-defined and re-engineered with the use of Information Technology and it is
sure that the future of banking
will offer more
sophisticated services to the
customers with the continuous product . An upgradation of
technology banks are playing vital role in economic development. Banking sector
in India is resulting with increased growth in customers. By providing
innovative facilities of banks. The changes made by banks are mostly focused on
financial inclusion for expansion into rural areas and bringing stability by
boosting credit growth making banking services near to the customer directly
and reducing customer valuable time. The current trends in banking are building
blocks of the “Cashless Economy”. Though there are few challenges, technology
will keep evolving and with collaborative efforts of Banks, Government and end
users, overcoming these challenges will certainly be possible. The initiative
of Government of India will very soon achieve its mission and rural India too would
be “digitally literate”. Banks will have to develop a strategy to bridge the
gap of technology in rural banks and urban banks. Today, Indian banking
industry is on the threshold of “next generation banking”. ICT innovation
clubbed with dream of “cashless economy” will certainly bring about
metamorphosis in the banking sector.
process innovations.
Thus, there is a paradigm shift from the seller?s market
to buyer?s market
in the industry and finally it affected at the
bankers level to change their approach from “conventional banking to
convenience banking” and “mass banking to class
banking”. The shift has also
increased the degree of
accessibility of a common man.
CHAPTER 13 BIBILOGAPGY
1.
Dhanwani, S.K.
(2014), “Recent Trends in Indian
Banking Industry”, Abhinav, Volume
02, Issue 03,
pp. 60-63
2.
Avasthi G P M (2000-01), “Information Technology in
Banking: Challenges for Regulators”, Prajnan, Vol. XXIX, No. 4, pp. 3 – 17
3.
impact-financial-technology-fintech-traditional-banking-ravneet-singh?
utm_source=share&utm_medium=member_android&utm_campaign=share_via
4.
https://www.datavsn.com/the-rise-of-fintech-and-its-impact-on-traditional-banking/
5.
Bellman, R. (1978). An Introduction to Artificial
Intelligence: Can Computers Think? San Francisco: Boyd & Fraser Pub. Co.
[1] Dhanwani, S.K. (2014),
“Recent Trends in
Indian Banking Industry”,
Abhinav, Volume 02, Issue
03, pp.
60-63
[2] Avasthi G P M (2000-01),
“Information Technology in Banking: Challenges for Regulators”, Prajnan, Vol.
XXIX, No. 4, pp. 3 – 17
[3] impact-financial-technology-fintech-traditional-banking-ravneet-singh?utm_source=share&utm_medium=member_android&utm_campaign=share_via
[4] https://www.datavsn.com/the-rise-of-fintech-and-its-impact-on-traditional-banking/
[5] Bellman, R. (1978). An Introduction
to Artificial Intelligence: Can Computers Think? San Francisco: Boyd &
Fraser Pub. Co.
Article Information
RECENT TRENDS OF BANKING SYSTEM IN INFORMATION TECHNOLOGY
Authors: MISS. DIPIKA SATISH GUPTA
- Journal IJLRA
- ISSN 2582-6433
- Published 2024/03/06
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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