TECHNOLOGICAL DEVELOPMENTS IN

BANKING SECTOR

SUDHAKARASUNIL KUMAR.VSUHAS..MSURESH.ASURESH.SSWATHI

INTRODUCTION

E-BANKING

CORE BANKING

MOBILE BANKING

AUTOMATED TELLER MACHINE(ATM’S)

The technological development of modern banking can be traced, in some ways, back to 1960, when Charles Sanford joined Bankers Trust. He rose up the ranks to become chairman and chief executive in the late 1980s. During his tenure, which lasted until 1996, the bank pioneered a number of practices that would later become common in the industry, including the development of new ways of banking practices including check encoders, check scanners, currency counters, currency discriminators, check strippers.

After post 80's,banking sector witnessed many other technological developments such as use of computers, ATM's and cellphone and cloud computing.

Combination of the two terms

1.Electronic technology and 2.BankingProcess by which a customer performs banking transaction electronically.

To provide services in users own environment for convenience and accessibility.

To reduce risk of handling cash.To provide a system that delivers an efficient financial services at low-cost to the customers.

Electronic Funds Transfer (EFT) Automated Teller Machines (ATM) Point of Sales (PoS) Electronic Data Interchange (EDI) Credit Cards Debit Cards Smart Cards Digital Cash

BENEFITS TO BANK1.Unlimited

Network.2.Lesser chance of

fraud and misappropriation.

3.Better profitability.

4.Better Customer Relationship.

BENEFITS TO CUSTOMERS

1.Any where Banking.

2.Any time banking.

3.Saves cost and time.

Connectivity problems.

Cyber crime.Computer Literacy is Essential.High cost of technology.Personal contact not possible.

Finland was the first country in the world to have taken in E-banking. In India, it was ICICI Bank which E-banking as early as 1997 under the brand name ‘Infinity’

ICICI ‘s profit to equity holders registered a growth of 21% percent in 2001.

Citibank claims that its project Suvidha, which started off in Bangalore in early in 1998, has encouraged customers to interact with electronically, using telephones, the Internet, and ATMs.

The Vice President of Global Trust Bank, P.C. Narayan says,

“An electronic transaction costs as much as 65% less than a physical one. ATMs have definitely emerged as the new business model for the banks and the way banking has been conducted. I think it is one of the remarkable things that has happened to Indian Banking Industry”.

A Reserve Bank of India (RBI) committee has come out with the road map for electronic banking and has sought legislation on EFT systems to facilitate multiple payment systems for banks and financial institutions.

The RBI has been gearing up to upgrading itself as a regulator and supervisor of the technologically dominated financial system

Several initiatives taken by the Government of India as well as the RBI have facilitated the development of E-banking in India. The Govt. of India enacted the IT Act, 2000 with effect from Oct.17,2000, which provides recognition to electronic transactions and other means of electronic commerce.

“The potential of “E-banking is huge. With the increase in connectivity, the number of users will explode”, says K.V. Kamat, the CEO of ICICI Bank.

The strategy for banks is to provide value-added services to products to customers utilizing the Internet extensively.

Web based banking service or E-Banking, the latest generation of banking transactions, has opened up new window of opportunity to the banks and existing financial institutions.

Since its evolution in 90th decade, it is having unprecedented growth.

Core banking is a general term used to describe the services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. CORE stands for "centralized online real-time environment". Core Banking Solution (CBS) is networking of branches, which enables Customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes the Bank’s Customer. Thus CBS is a step towards enhancing customer convenience through Anywhere and Anytime Banking.

Finacle core banking solution offers an unlimited palette of features for banks to design and deploy products for varying market segments. The product bundling capabilities of the solution offer a wide range of possibilities for banks to create products with innovative features. The facilities provided for differential pricing, channel rules and customization through Finacle Studio – the scripting engine, empower banks to continuously innovate and extend their suite of products, across segments.

Finacle core banking solution supports business event automation and process orchestration, thus eliminating manual tasks and reducing process time. The elimination of error and data redundancies also results in increased branch productivity. Straight Through Processing (STP) abilities enhance reduction in turnaround and processing time, increasing output and enabling speedy completion of tasks.

The CIF and CRM capabilities in Finacle offer a unified view of the customer across the entire solution and across multiple back-end applications, enabling the bank to view the customer from a completely informed angle. This empowers banks to effectively manage customer relationships and aggressively explore cross-sell opportunities.

The Service Oriented Architecture (SOA) enables the IT team at the bank to effect changes without touching the base code, ensuring lesser vendor dependency and faster adaptability to changing business conditions.

Substantial reduction of operation costs Easier introduction of new products Faster customer service Integration of all products and services, leading

to improved risk management Mitigation of Operational Risk Real-time transaction processing Scaling up of operations Availability of e-trade options to bank

customers Efficient and easy transactions which can be

conducted 24/7

1).Excessive reliance on technology 2). Any failure in computer systems can cause entire network to go down. 3). If Data is not protected properly and if proper care is not taken , hackers can gain access to the sensitive data.

•Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices.

•Mobile banking (also known as M-Banking, mbanking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone

SMS (Short messaging service)

GPRS (General Packet Radio Service)

USSD (Unstructured Supplementary Service Data)

Account information Mini-statements and checking of account history Alerts on account activity or passing of set thresholds Mutual funds / equity statements Insurance policy management Pension plan management Status on cheque, stop payment on cheque Ordering cheque books Balance checking in the account Recent transactions Due date of payment (functionality for stop, change and deleting of payments) PIN provision, Change of PIN and reminder over the Internet Blocking of (lost, stolen) cards Payments, deposits, withdrawals, and transfers Domestic and international fund transfers Mobile recharging Commercial payment processing Bill payment processing Peer to Peer payments 

Customer Benefits• Usually Secure, Convenient and easy method of

payment• Anywhere anytime payment

Banks• Additional channel for customer payments• Use of existing Infrastructure• Value added service to customers

Risk of Illegal access by hackers.

Transaction needs signal strength. It might not work in remote geographical regions

M-Banking Is not as flexible, as done through computer means

Device used by the customer may not be compatible to the M-banking Application

It is a computerized telecommunication device that provides of a financial institution with access to financial transaction in a public space without the need for a cashier , human clerk or bank teller.

It is a card issued by a bank , credit union or building society that can be used at an ATM for deposits , withdrawals , account information or other kind of transactions , often through interbank networks.

The idea of self-service in retail banking leads to the development of an ATM machine

The simultaneous efforts in Japan , Sweden , U.K. been credited in developing the first cash dispenser machine

The first ATM called Bankograph was installed in Barkley’s bank in north London U.K. on 27th June 1967

CPU (to control the user interface and transaction

devices) Magnetic card reader (to identify the customer) DISPLAY (used by user for transactions) FUNCTION KEY OR TOUCH SCREEN (used to select various aspects of transaction) RECORD PRINTER (to provide user the record of their transactions) VAULT (to store the parts of machine requiring restricted

transaction) HOUSING (for aesthetics and to assign signage)

Today ATMs are been used globally The number of ATMs using currently are

about 1.8 million Globally they are divided into seven regions ATMS are fastly using in CANADA , USA ,

EUROPE, JAPAN But yet to reach high number in the near

east or africa

1)U have access to the cash in your bank account whenever u needed

2)For instance, u are in stores that doesn’t take checks and credit cards but it has an atm you can withdraw the money for your purpose.

3)You can travel anywhere without cash4)If you have ever faced a need of money,then you

can probably access on atm machine5) these saves time 6) they operate 24hours7) these use pin for security thus they are safe8) Checking recent or past bank statements 9) Checking how much money is remaining in the

     account.

1)they are not safe since they are located outside the bank hall

2)if one forgets the pin number he or she will not be able to withdraw money from their accounts

3) if one makes mistakes three times in entering the pin number the card will be swallowed down the machine and it takes time to retrieve it

4) If the bank card is stolen and the number ascertained, an unauthorized person can easily access the account.

5) Machine may not recognize your Credit card6) May be no ATM’s near by7) If someone watches or hacks an ATM machine your

details    May be taken

8) If problem with credit card you can not withdraw your     money