“Role of Technology in Bank.”
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Apr 17, 2020
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About This Presentation
“Role of Technology in Bank.”
Slide Content
N. R. Institute of Business Management (NRIBM-PGDM)
Project
On
“Role of Technology in Bank.”
Banking & Insurance
Submitted To
Prof. Devarshi Upadhyay
Submitted By
Shail Rami P 1849
Term: VI Batch -2018-20
Project
On
“Role of Technology in Bank.”
Banking & Insurance
Submitted To
Prof. Devarshi Upadhyay
Submitted By
Shail Rami P 1849
Term: VI Batch -2018-20
CHAPTER 1
INDUSTRY OVERVIEW
INDUSTRY OVERVIEW
1.1 Overview of industry
Bank is a financial institution with the prime function of accepting money from its customers
for lending purpose. Bank provides financial services such as wealth management, currency
exchange, and safe deposit boxes. Banking can be defined as the business activity of accepting
and safeguarding money of individuals and lending this money in order to earn profit. Before
the establishment of banks, banking activities were performed by unorganized sector like
money lenders. They used to charge very high rate of interest. Even public deposits were not
very safe. To overcome this issue, organised banking sector was established. After 20th century
many joint stock banks and cooperative banks have established and played significant role in
providing finance especially to agricultural and small industries sector. Tremendous changes
have been taken place in financial market and banking industries after nationalization of banks.
Rapid advancement of technology has contributed to significant reduction in transaction costs
and improves the loan delivering facilities of banks.
Indian Banking Sector Overview Banking Services
Services offered by the banks can be broadly classified into 4 types: Payment services,
Financial Intermediary, Financial Services and Ancillary Services.
1. Payment services: This is the most important service performed by the banks. Previously
the payment system was supported by cheques, demand drafts etc., which have now been
replaced with direct online money transfer with the evolution of technology.
2. Financial intermediary: This is one of the oldest functions of the bank which specifies
accepting deposits from customers and then lending these funds to borrowers. This is the main
core business of the banking system and will continue as long as the banking system exists.
3. Financial Services: These services include investment banking, foreign exchange business,
line of credit services, wealth management and broking services. These services generate
income for the commercial bank in the form of commissions etc.
4. Ancillary Services: other services that the banks offer to the common men along with the
necessary banking services. Typical ancillary services include safe deposits lockers for gold,
cheque pick up facility, door step banking etc.
Bank is a financial institution with the prime function of accepting money from its customers
for lending purpose. Bank provides financial services such as wealth management, currency
exchange, and safe deposit boxes. Banking can be defined as the business activity of accepting
and safeguarding money of individuals and lending this money in order to earn profit. Before
the establishment of banks, banking activities were performed by unorganized sector like
money lenders. They used to charge very high rate of interest. Even public deposits were not
very safe. To overcome this issue, organised banking sector was established. After 20th century
many joint stock banks and cooperative banks have established and played significant role in
providing finance especially to agricultural and small industries sector. Tremendous changes
have been taken place in financial market and banking industries after nationalization of banks.
Rapid advancement of technology has contributed to significant reduction in transaction costs
and improves the loan delivering facilities of banks.
Indian Banking Sector Overview Banking Services
Services offered by the banks can be broadly classified into 4 types: Payment services,
Financial Intermediary, Financial Services and Ancillary Services.
1. Payment services: This is the most important service performed by the banks. Previously
the payment system was supported by cheques, demand drafts etc., which have now been
replaced with direct online money transfer with the evolution of technology.
2. Financial intermediary: This is one of the oldest functions of the bank which specifies
accepting deposits from customers and then lending these funds to borrowers. This is the main
core business of the banking system and will continue as long as the banking system exists.
3. Financial Services: These services include investment banking, foreign exchange business,
line of credit services, wealth management and broking services. These services generate
income for the commercial bank in the form of commissions etc.
4. Ancillary Services: other services that the banks offer to the common men along with the
necessary banking services. Typical ancillary services include safe deposits lockers for gold,
cheque pick up facility, door step banking etc.
There are different non-banking activities that are performed by the bank now days. For
example by helping customers to make utility payments, by performing as a merchant banking
of their customers, managing mutual funds and managing their investment risks, offering credit
and debit card, offering insurance service etc.
Indian Banking Sector Overview Users
On the basis of banking services, users are of two types: General users & Industrial Users.
1. General users – general users are those users who have their bank account and uses banking
facilities as per the terms and conditions set by the banks. They usually do very small
transaction and avails very limited services of the bank.
2. Industrial Users - The industrialists, entrepreneurs having an account in the bank and using
credit facilities and other services for their numerous operations like establishments and
expansion, mergers, acquisitions etc. of their businesses are known as industrial users.
Generally, they are found to be a few but large sized customers.
Indian Banking Sector Overview Challenges
With the advancement of technology continuous deregulation Indian Banking industry is
facing different challenges. These are Deregulation, Efficiency, Diffused Customer Loyalty
and Competency Gap.
Deregulation - This continuous deregulation has given rise to extreme competition with
greater autonomy, operational flexibility, and decontrolled interest rate and liberalized norms
and policies for foreign exchange in banking market.
Efficiency: Owing to cutthroat competition in the industry, banks are facing pricing pressure
and have to give thrust on retail assets. Excellent efficiencies are required at the banker's end
to establish a balance between the commercial and social considerations.
Diffused Customer Loyalty: As a result of attractive offers by MNC and other nationalized
banks, customers have become more demanding and the loyalties are diffused.
Competency Gap: The competency gap needs to be addressed simultaneously otherwise there
will be missed opportunities. Placing the right skill at the right place will determine success.
example by helping customers to make utility payments, by performing as a merchant banking
of their customers, managing mutual funds and managing their investment risks, offering credit
and debit card, offering insurance service etc.
Indian Banking Sector Overview Users
On the basis of banking services, users are of two types: General users & Industrial Users.
1. General users – general users are those users who have their bank account and uses banking
facilities as per the terms and conditions set by the banks. They usually do very small
transaction and avails very limited services of the bank.
2. Industrial Users - The industrialists, entrepreneurs having an account in the bank and using
credit facilities and other services for their numerous operations like establishments and
expansion, mergers, acquisitions etc. of their businesses are known as industrial users.
Generally, they are found to be a few but large sized customers.
Indian Banking Sector Overview Challenges
With the advancement of technology continuous deregulation Indian Banking industry is
facing different challenges. These are Deregulation, Efficiency, Diffused Customer Loyalty
and Competency Gap.
Deregulation - This continuous deregulation has given rise to extreme competition with
greater autonomy, operational flexibility, and decontrolled interest rate and liberalized norms
and policies for foreign exchange in banking market.
Efficiency: Owing to cutthroat competition in the industry, banks are facing pricing pressure
and have to give thrust on retail assets. Excellent efficiencies are required at the banker's end
to establish a balance between the commercial and social considerations.
Diffused Customer Loyalty: As a result of attractive offers by MNC and other nationalized
banks, customers have become more demanding and the loyalties are diffused.
Competency Gap: The competency gap needs to be addressed simultaneously otherwise there
will be missed opportunities. Placing the right skill at the right place will determine success.
1.2 Major players of banking industry
1.3 Contribution Towards In the GDP
Services sector is the largest sector of India. Gross Value Added (GVA) at current prices for
Services sector is estimated at 92.26 lakh crore INR in 2018-19. Services sector accounts for
54.40% of total India's GVA of 169.61 lakh crore Indian rupees. With GVA of Rs. 50.43 lakh
crore, Industry sector contributes 29.73%. While, Agriculture and allied sector shares 15.87%.
1.4 Growth of the industry
Economic and demographic drivers
Favourable demographics and rising income levels.
India ranks among the top 7th economies with a GDP of US$ 2, 73 trillion in 2018 and
economy is forecasted to grow at 7.3 per cent in 2018.
The sector will benefit from structural economic stability and continued credibility of
Monetary Policy.
Common Service Centre (CSC)
The Government of India plans to allow Common Service Centers (CSC) to offer banking
services.
CSC will offer free internet through BharatNet till March 2020
Policy support
The government passed the Banking Regulation (Amendment) Bill 2017, which will
empower RBI to deal with NPAs in the banking sector.
The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed
by Rajya Sabha and is expected to strengthen the banking sector (as of Jan 2018).
In May 2018, the Government of India provided Rs 6 trillion (US$ 93 billion) loans to 120
million beneficiaries under Mudra scheme.
Infrastructure financing
India currently spends 6 per cent of GDP on infrastructure; NITI Aayog expects this
fraction to grow going ahead.
As per Union Budget 2019- 20, investment-driven growth requires access to low cost
capital which an requires investments of Rs 20 lakh crores (US$ 300 billion) every year.
Services sector is the largest sector of India. Gross Value Added (GVA) at current prices for
Services sector is estimated at 92.26 lakh crore INR in 2018-19. Services sector accounts for
54.40% of total India's GVA of 169.61 lakh crore Indian rupees. With GVA of Rs. 50.43 lakh
crore, Industry sector contributes 29.73%. While, Agriculture and allied sector shares 15.87%.
1.4 Growth of the industry
Economic and demographic drivers
Favourable demographics and rising income levels.
India ranks among the top 7th economies with a GDP of US$ 2, 73 trillion in 2018 and
economy is forecasted to grow at 7.3 per cent in 2018.
The sector will benefit from structural economic stability and continued credibility of
Monetary Policy.
Common Service Centre (CSC)
The Government of India plans to allow Common Service Centers (CSC) to offer banking
services.
CSC will offer free internet through BharatNet till March 2020
Policy support
The government passed the Banking Regulation (Amendment) Bill 2017, which will
empower RBI to deal with NPAs in the banking sector.
The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed
by Rajya Sabha and is expected to strengthen the banking sector (as of Jan 2018).
In May 2018, the Government of India provided Rs 6 trillion (US$ 93 billion) loans to 120
million beneficiaries under Mudra scheme.
Infrastructure financing
India currently spends 6 per cent of GDP on infrastructure; NITI Aayog expects this
fraction to grow going ahead.
As per Union Budget 2019- 20, investment-driven growth requires access to low cost
capital which an requires investments of Rs 20 lakh crores (US$ 300 billion) every year.
Pradhan Mantri Vaya Vandana Yojna
The scheme was launched on March 28, 2018 to provide social security to elderly people
by providing Rs 10,000 (US$ 155) pension per month.
The scheme has subscription limit till 31st March 2020.
The scheme has investment limit of Rs 15 lakh (US$ 23,274).
Government initiatives
Government has smoothly carried out consolidation, reducing the number of Public Sector Banks
by eight.
The Government of India will invest Rs 48,239 crore (US$ 6.78 billion) in 12 public sector banks
(PSBs) in FY20, to help maintain regulatory capital requirements and financial growth in India.
The Government of India will invest Rs 5,042 crore (US$ 730.88 million) in Bank of Baroda post
its merger with two other public sector lenders Dena Bank and Vijaya Bank
STRONG ECONOMIC GROWTH TO PROPEL BANKING SECTOR EXPANSION
Rising per capita income will
lead to increase in the fraction
of the Indian population that
uses banking services.
Population in 15-64 age group is
expected to grow strongly going
ahead, giving further push to the
number of customers in banking
sector.
As per Economic Survey 2018-
19, working age population to
grow by 9.7 million per year
during 2021-31 and 4.2 million
per year during 2031-41.
HOUSING FINANCE KEY DRIVERS
2,500
2,000
1,50
0
1,606.0
4 1,461.6
7
1,000
500
201
1
201
5
201
7
Populatio
n
GDP-RHS
India’s working age population (in million) and GDP per
capita
802.01
860.13
886.92
The scheme was launched on March 28, 2018 to provide social security to elderly people
by providing Rs 10,000 (US$ 155) pension per month.
The scheme has subscription limit till 31st March 2020.
The scheme has investment limit of Rs 15 lakh (US$ 23,274).
Government initiatives
Government has smoothly carried out consolidation, reducing the number of Public Sector Banks
by eight.
The Government of India will invest Rs 48,239 crore (US$ 6.78 billion) in 12 public sector banks
(PSBs) in FY20, to help maintain regulatory capital requirements and financial growth in India.
The Government of India will invest Rs 5,042 crore (US$ 730.88 million) in Bank of Baroda post
its merger with two other public sector lenders Dena Bank and Vijaya Bank
STRONG ECONOMIC GROWTH TO PROPEL BANKING SECTOR EXPANSION
Rising per capita income will
lead to increase in the fraction
of the Indian population that
uses banking services.
Population in 15-64 age group is
expected to grow strongly going
ahead, giving further push to the
number of customers in banking
sector.
As per Economic Survey 2018-
19, working age population to
grow by 9.7 million per year
during 2021-31 and 4.2 million
per year during 2031-41.
HOUSING FINANCE KEY DRIVERS
2,500
2,000
1,50
0
1,606.0
4 1,461.6
7
1,000
500
201
1
201
5
201
7
Populatio
n
GDP-RHS
India’s working age population (in million) and GDP per
capita
802.01
860.13
886.92
Rapid urbanisation, decreasing household size & easier availability of home loans has been
driving demand for housing.
Personal finance, including housing finance provide an essential cushion against volatility
in corporate loans.
Housing units worth up to Rs 45 lakh (US$ 63,107) will rise on account of additional Rs
1.5 lakh (US$ 2,103) tax deduction.
The recent improvement in property value have reduced the ratio of loan to collateral
value.
Credit to housing sector increased at a CAGR of 11.91 per cent during FY09–19, wherein,
value of credit to housing sector increased from to US$ 114.1 billion in FY16 to US$ 151.2
billion in FY18 and stood at Rs 11,601 billion (US$ 165.99 billion) in FY19.
Credit to housing sector increased at a CAGR of 11.91 per cent during FY09-19, wherein,
value of credit to housing sector increased from US$ 114.1 billion in FY16 to US$ 151.2
billion in FY18 and stood at Rs 11,601 billion (US$ 165.99 billion) in FY19.
Demand in the low- & mid--income segments exceeds supply 3 to 4-fold.
This has propelled demand for housing loan in the last few years
driving demand for housing.
Personal finance, including housing finance provide an essential cushion against volatility
in corporate loans.
Housing units worth up to Rs 45 lakh (US$ 63,107) will rise on account of additional Rs
1.5 lakh (US$ 2,103) tax deduction.
The recent improvement in property value have reduced the ratio of loan to collateral
value.
Credit to housing sector increased at a CAGR of 11.91 per cent during FY09–19, wherein,
value of credit to housing sector increased from to US$ 114.1 billion in FY16 to US$ 151.2
billion in FY18 and stood at Rs 11,601 billion (US$ 165.99 billion) in FY19.
Credit to housing sector increased at a CAGR of 11.91 per cent during FY09-19, wherein,
value of credit to housing sector increased from US$ 114.1 billion in FY16 to US$ 151.2
billion in FY18 and stood at Rs 11,601 billion (US$ 165.99 billion) in FY19.
Demand in the low- & mid--income segments exceeds supply 3 to 4-fold.
This has propelled demand for housing loan in the last few years
PERSONAL FINANCE KEY DRIVERS
Growth in disposable income has been encouraging households to raise their standard of
living & boost demand for personal credit.
Credit under the personal finance segment (excluding housing) rose at a CAGR of 9.23
per cent during FY09–19 and stood at US$ 144.9 billion in FY18 and stood at Rs 10,606
billion (US$ 151.75 billion) in FY19.
Unlike some other emerging markets, credit-induced consumption is still less in India.
Growth in disposable income has been encouraging households to raise their standard of
living & boost demand for personal credit.
Credit under the personal finance segment (excluding housing) rose at a CAGR of 9.23
per cent during FY09–19 and stood at US$ 144.9 billion in FY18 and stood at Rs 10,606
billion (US$ 151.75 billion) in FY19.
Unlike some other emerging markets, credit-induced consumption is still less in India.
1.5 Trends in banking industry
1. Digitization: With the rapid growth of digital technology, it became imperative for
banking and financial services in India to keep up with the changes and innovate digital
solutions for the tech-savvy customers. Besides the financial institutions, insurance,
healthcare, retail, trade, and commerce are some of the major industries that are
experiencing the enormous digital shift. To stay competitive, it is necessary for the
banking and financial industry to take the leap on the digital bandwagon.
2. Enhanced Mobile Banking: Mobile banking is one of the most dominant current
trends in banking systems. As per the definition, it is the use of a smartphone to perform
various banking procedures like checking account balance, fund transfer, and bill
payments, without the need of visiting the branch. This trend has taken over the
traditional banking systems. In the coming years, mobile banking is expected to become
even more efficient and effortless to keep up with the customer demands. Mobile
banking future trends hint at the acquisition of IoT and Voice-Enabled Payment
Services to become the reality of tomorrow. These voice-enabled services can be found
in smart televisions, smart cars, smart homes, and smart everything. Top industry
leaders are collaborating to adopt IoT-connected networks to create mobile banking
technologies that require users’ voice to operate.
3. UPI (Unified Payments Interface): UPI or Unified Payments Interface has changed
the way payments are made. It is a real-time payment system that enables instant inter-
bank transactions with the use of a mobile platform. In India, this payment system is
considered the future of retail banking. It is one of the fastest and most secure payment
gateways that is developed by National Payments Corporation of India and regulated
by the Reserve Bank of India. The year 2016 saw the launch of this revolutionary
transactions system. This system makes funds transfer available 24 hours, 365 days
unlike other internet banking systems. There are approximately 39 apps and more than
50 banks supporting the transaction system. In the post-demonetization India, this
system played a significant role. In the future, with the help of UPI, banking is expected
to become more “open.”
1. Digitization: With the rapid growth of digital technology, it became imperative for
banking and financial services in India to keep up with the changes and innovate digital
solutions for the tech-savvy customers. Besides the financial institutions, insurance,
healthcare, retail, trade, and commerce are some of the major industries that are
experiencing the enormous digital shift. To stay competitive, it is necessary for the
banking and financial industry to take the leap on the digital bandwagon.
2. Enhanced Mobile Banking: Mobile banking is one of the most dominant current
trends in banking systems. As per the definition, it is the use of a smartphone to perform
various banking procedures like checking account balance, fund transfer, and bill
payments, without the need of visiting the branch. This trend has taken over the
traditional banking systems. In the coming years, mobile banking is expected to become
even more efficient and effortless to keep up with the customer demands. Mobile
banking future trends hint at the acquisition of IoT and Voice-Enabled Payment
Services to become the reality of tomorrow. These voice-enabled services can be found
in smart televisions, smart cars, smart homes, and smart everything. Top industry
leaders are collaborating to adopt IoT-connected networks to create mobile banking
technologies that require users’ voice to operate.
3. UPI (Unified Payments Interface): UPI or Unified Payments Interface has changed
the way payments are made. It is a real-time payment system that enables instant inter-
bank transactions with the use of a mobile platform. In India, this payment system is
considered the future of retail banking. It is one of the fastest and most secure payment
gateways that is developed by National Payments Corporation of India and regulated
by the Reserve Bank of India. The year 2016 saw the launch of this revolutionary
transactions system. This system makes funds transfer available 24 hours, 365 days
unlike other internet banking systems. There are approximately 39 apps and more than
50 banks supporting the transaction system. In the post-demonetization India, this
system played a significant role. In the future, with the help of UPI, banking is expected
to become more “open.”
4. Block Chain: Block chain is the new kid on the block and the latest buzzword. The
technology that works on the principles of computer science, data structures and
cryptography and is the core component of cryptocurrency, is said to be the future of
banking and financial services globally. Block chain uses technology to create blocks
to process, verify and record transactions, without the ability to modify it.
5. Artificial Intelligence Robots: Several private and nationalized banks in India have
started to adopt Chabot’s or Artificial intelligence robots for assistance in customer
support services. For now, the use of this technology is at a nascent stage and evolution
of these Chabot’s is not too far away. Usage of chatbots is among the many emerging
trends in the Indian banking sector that is expected to grow.
6. The rise of Fintech Companies: Previously, banks considered Fintech companies a
disrupting force. However, with the changing trends in the financial services sector in
India, fintech companies have become an important part of the sector. The industry has
emerged as a significant part of the ecosystem. With the use of financial technology,
these companies aim to surpass the traditional methods of finance. In the past few
decades, massive investment has been made in these companies and it has emerged into
a multi-billion-dollar industry globally.
7. Digital-Only Banks: It is a recent trend in the Indian financial system and cannot be
ignored. With the entire banking and financial services industry jumping to digital
channels, digital-only banks have emerged to create paperless and branchless banking
systems. This is a new breed of banking institutions that are overtaking the traditional
models rapidly. These banks provide banking facilities only through various IT
platforms that can be accessed on mobile, computers, and tablets. It provides most of
the basic services in the most simplified manner and gives access to real-time data. The
growing popularity of these banks is said to be a real threat to traditional banks.
8. Cloud Banking: Cloud technology has taken the world by storm. It seems the
technology will soon find its way in the banking and financial services sector in India.
Cloud computing will improve and organize banking and financial activities. Use of
cloud-based technology means improved flexibility and scalability, increased
efficiency, easier integration of newer technologies and applications, faster services and
technology that works on the principles of computer science, data structures and
cryptography and is the core component of cryptocurrency, is said to be the future of
banking and financial services globally. Block chain uses technology to create blocks
to process, verify and record transactions, without the ability to modify it.
5. Artificial Intelligence Robots: Several private and nationalized banks in India have
started to adopt Chabot’s or Artificial intelligence robots for assistance in customer
support services. For now, the use of this technology is at a nascent stage and evolution
of these Chabot’s is not too far away. Usage of chatbots is among the many emerging
trends in the Indian banking sector that is expected to grow.
6. The rise of Fintech Companies: Previously, banks considered Fintech companies a
disrupting force. However, with the changing trends in the financial services sector in
India, fintech companies have become an important part of the sector. The industry has
emerged as a significant part of the ecosystem. With the use of financial technology,
these companies aim to surpass the traditional methods of finance. In the past few
decades, massive investment has been made in these companies and it has emerged into
a multi-billion-dollar industry globally.
7. Digital-Only Banks: It is a recent trend in the Indian financial system and cannot be
ignored. With the entire banking and financial services industry jumping to digital
channels, digital-only banks have emerged to create paperless and branchless banking
systems. This is a new breed of banking institutions that are overtaking the traditional
models rapidly. These banks provide banking facilities only through various IT
platforms that can be accessed on mobile, computers, and tablets. It provides most of
the basic services in the most simplified manner and gives access to real-time data. The
growing popularity of these banks is said to be a real threat to traditional banks.
8. Cloud Banking: Cloud technology has taken the world by storm. It seems the
technology will soon find its way in the banking and financial services sector in India.
Cloud computing will improve and organize banking and financial activities. Use of
cloud-based technology means improved flexibility and scalability, increased
efficiency, easier integration of newer technologies and applications, faster services and
solutions, and improved data security. In addition, the banks will not have to invest in
expensive hardware and software as updating the information is easier on cloud-based
models.
9. Biometrics: Essentially for security reasons, a Biometric Authentication system is
changing the national identity policies and the impact is expected to be widespread.
Banking and financial services are just one of the many other industries that will be
experiencing the impact. With a combination of encryption technology and OTPs,
biometric authentication is forecasted to create a highly-secure database protecting it
from leaks and hackers attempts. Financial services in India are exploring the potential
of this powerful technology to ensure sophisticated security to customers’ account and
capital.
10. Wearables: With smartwatch technology, the banking and financial services
technology is aiming to create wearables for retail banking customers and provide more
control and easy access to the data. Wearables have changed the way we perform daily
activities. Therefore, this technology is anticipated to be the future retail banking trend
by providing major banking services with just a click on a user-friendly interface
on their wearable device.
1.5 SWOT ANYALYSIS
Strengths
Hedge from risk: Whether it is natural calamity or man-made calamity banks mitigate
the after effect of the destruction by providing financial support to the victims to stand
–up & lead a peaceful life again.
Diversified services: Banking industry offer services from CASA to insurance, to loan,
to investment.
Connecting People: With the advent of new age technological advancement Banks
have made the life of the common man easier. People can transact on real time basis in
many places.
expensive hardware and software as updating the information is easier on cloud-based
models.
9. Biometrics: Essentially for security reasons, a Biometric Authentication system is
changing the national identity policies and the impact is expected to be widespread.
Banking and financial services are just one of the many other industries that will be
experiencing the impact. With a combination of encryption technology and OTPs,
biometric authentication is forecasted to create a highly-secure database protecting it
from leaks and hackers attempts. Financial services in India are exploring the potential
of this powerful technology to ensure sophisticated security to customers’ account and
capital.
10. Wearables: With smartwatch technology, the banking and financial services
technology is aiming to create wearables for retail banking customers and provide more
control and easy access to the data. Wearables have changed the way we perform daily
activities. Therefore, this technology is anticipated to be the future retail banking trend
by providing major banking services with just a click on a user-friendly interface
on their wearable device.
1.5 SWOT ANYALYSIS
Strengths
Hedge from risk: Whether it is natural calamity or man-made calamity banks mitigate
the after effect of the destruction by providing financial support to the victims to stand
–up & lead a peaceful life again.
Diversified services: Banking industry offer services from CASA to insurance, to loan,
to investment.
Connecting People: With the advent of new age technological advancement Banks
have made the life of the common man easier. People can transact on real time basis in
many places.
Banking is as old as Human race: Banking industry is the driving force to any nation.
It helps in shaping the life of human race may be some time merely by Exchange (which
was called barter system), or by transaction or by facilitating advances.
Weakness
Vulnerable to risk: Since this sector deals with finances, it is the most risky sector
which can change the fate of any business/Industry.
High NPA’s: Rise in Retail & corporate NPA’s (Non-performing assets) is the single
major issue this sector is going through worldwide.
Structural weaknesses such as a fragmented industry structure, restrictions on capital
availability and deployment, lack of institutional support infrastructure, restrictive
labour laws, weak corporate governance, Political pressure and ineffective regulations.
Lack Of coordination: The global banking industry faces short-term uncertainty due
to the debt crises that challenge several major economies. Industry assets stand at $143
trillion (2013) &the EU is the largest regional market, with over 57% of the global
market. Volatility in different market/Currencies has created problems for the banks in
order to work properly across the borders.
Opportunities
Expansion: Penetrating to the rural markets & bringing the rural masses under the
purview of organized banking will be the objective of the Banks in decades to come.
Changing Socio-cultural & demographic factors: Given the demographic shifts
resulting from changes in age profile and household income, consumers will
increasingly demand enhanced institutional capabilities and service levels from banks.
Rise in private sector banking: Banking Industry across the world is highly regulated
&lead by PSU’s with their respective central banks. With the advent of private sector
banks this sector is going through structural & functional changes mainly due to the
adaptation of the advanced technologies & increased competition thereby benefiting to
the end customers.
It helps in shaping the life of human race may be some time merely by Exchange (which
was called barter system), or by transaction or by facilitating advances.
Weakness
Vulnerable to risk: Since this sector deals with finances, it is the most risky sector
which can change the fate of any business/Industry.
High NPA’s: Rise in Retail & corporate NPA’s (Non-performing assets) is the single
major issue this sector is going through worldwide.
Structural weaknesses such as a fragmented industry structure, restrictions on capital
availability and deployment, lack of institutional support infrastructure, restrictive
labour laws, weak corporate governance, Political pressure and ineffective regulations.
Lack Of coordination: The global banking industry faces short-term uncertainty due
to the debt crises that challenge several major economies. Industry assets stand at $143
trillion (2013) &the EU is the largest regional market, with over 57% of the global
market. Volatility in different market/Currencies has created problems for the banks in
order to work properly across the borders.
Opportunities
Expansion: Penetrating to the rural markets & bringing the rural masses under the
purview of organized banking will be the objective of the Banks in decades to come.
Changing Socio-cultural & demographic factors: Given the demographic shifts
resulting from changes in age profile and household income, consumers will
increasingly demand enhanced institutional capabilities and service levels from banks.
Rise in private sector banking: Banking Industry across the world is highly regulated
&lead by PSU’s with their respective central banks. With the advent of private sector
banks this sector is going through structural & functional changes mainly due to the
adaptation of the advanced technologies & increased competition thereby benefiting to
the end customers.
Threats
Recession: It is one of the major threats to the financial system of the nation. Traumatic
shock of Economic crises & collapse of the several businesses can affect the banks and
vice-versa.
Stability of the system: Failure of some weak banks has often threatened the stability
of the system.
Competition: Competition from NBFC’s (Non-banking financial companies) like
insurance companies & mutual fund companies can affect the business of Banks.
1.6 PESTEL analysis
POLITICAL/ LEGAL
Government and RBI policies affect the banking sector. Sometimes looking into the political
advantage of a particular party, the Government declares some measures to their benefits like
waiver of short-term agricultural loans, to attract the farmer’s votes. By doing so the profits of
the bank get affected. Various banks in the cooperative sector are open and run by the
politicians. They exploit these banks for their benefits. Sometimes the government appoints
various chairmen of the banks. Various policies are framed by the RBI looking at the present
situation of the country for better control over the banks.
ECONOMICAL
Banking is as old as authentic history and the modern commercial banking are traceable to
ancient times. In India, banking has existed in one form or the other from time to time. The
present era in banking may be taken to have commenced with establishment of bank of Bengal
in 1809 under the government charter and with government participation in share capital.
Allahabad bank was started in the year 1865 and Punjab national bank in 1895, and thus, others
followed Every year RBI declares its 6 monthly policy and accordingly the various measures
and rates are implemented which has an impact on the banking sector. Also the Union budget
affects the banking sector to boost the economy by giving certain concessions or facilities. If
in the Budget savings are encouraged, then more deposits will be attracted towards the banks
and in turn they can lend more money to the agricultural sector and industrial sector, therefore,
booming the economy If the FDI limits are relaxed, then more FDI are brought in India through
banking channels.
Recession: It is one of the major threats to the financial system of the nation. Traumatic
shock of Economic crises & collapse of the several businesses can affect the banks and
vice-versa.
Stability of the system: Failure of some weak banks has often threatened the stability
of the system.
Competition: Competition from NBFC’s (Non-banking financial companies) like
insurance companies & mutual fund companies can affect the business of Banks.
1.6 PESTEL analysis
POLITICAL/ LEGAL
Government and RBI policies affect the banking sector. Sometimes looking into the political
advantage of a particular party, the Government declares some measures to their benefits like
waiver of short-term agricultural loans, to attract the farmer’s votes. By doing so the profits of
the bank get affected. Various banks in the cooperative sector are open and run by the
politicians. They exploit these banks for their benefits. Sometimes the government appoints
various chairmen of the banks. Various policies are framed by the RBI looking at the present
situation of the country for better control over the banks.
ECONOMICAL
Banking is as old as authentic history and the modern commercial banking are traceable to
ancient times. In India, banking has existed in one form or the other from time to time. The
present era in banking may be taken to have commenced with establishment of bank of Bengal
in 1809 under the government charter and with government participation in share capital.
Allahabad bank was started in the year 1865 and Punjab national bank in 1895, and thus, others
followed Every year RBI declares its 6 monthly policy and accordingly the various measures
and rates are implemented which has an impact on the banking sector. Also the Union budget
affects the banking sector to boost the economy by giving certain concessions or facilities. If
in the Budget savings are encouraged, then more deposits will be attracted towards the banks
and in turn they can lend more money to the agricultural sector and industrial sector, therefore,
booming the economy If the FDI limits are relaxed, then more FDI are brought in India through
banking channels.
SOCIAL
Before nationalization of the banks, their control was in the hands of the private parties and
only big business houses and the effluent sections of the society were getting benefits of
banking in India. In 1969 government nationalized 14 banks. To adopt the social development
in the banking sector it was necessary for speedy economic progress, consistent with social
justice, in democratic political system, which is free from domination of law, and in which
opportunities are open to all. Accordingly, keeping in mind both the national and social
objectives, bankers were given direction to help economically weaker section of the society
and also provide need-based finance to all the sectors of the economy with flexible and liberal
attitude. Now the banks provide various types of loans to farmers, working women,
professionals, and traders. They also provide education loan to the students and housing loans,
consumer loans, etc. Banks having big clients or big companies have to provide services like
personalized banking to their clients because these customers do not believe in running about
and waiting in queues for getting their work done. The bankers also have to provide these
customers with special provisions and at times with benefits like food and parties. But the banks
do not mind incurring these costs because of the kind of business these clients bring for the
bank. Banks have changed the culture of human life in India and have made life much easier
for the people.
TECHNOLOGICAL
Technology environment plays a very important role in bank’s internal control.The latest
developments in technology like computer and telecommunication have promoted the bankers
to change the concept of branch banking to anywhere banking. The use of ATM and Internet
banking has allowed ‘anytime, anywhere banking’ facilities. Automatic voice recorders now
answer simple queries, currency accounting machines makes the job easier and self-service
counters are now encouraged. Credit card facility has encouraged an era of cashless society.
Today MasterCard and Visa card are the two most popular cards used world over. The banks
have now started issuing smartcards or debit cards to be used for making payments. These are
also called as electronic purse. Some of the banks have also started home banking through
telecommunication facilities and computer technology by using terminals installed at
customers home and they can make the balance inquiry, get the statement of accounts, give
instructions for fund transfers, etc. Through ECS we can receive the dividends and interest
directly to our account avoiding the delay or chance of losing the post. Today banks are also
Before nationalization of the banks, their control was in the hands of the private parties and
only big business houses and the effluent sections of the society were getting benefits of
banking in India. In 1969 government nationalized 14 banks. To adopt the social development
in the banking sector it was necessary for speedy economic progress, consistent with social
justice, in democratic political system, which is free from domination of law, and in which
opportunities are open to all. Accordingly, keeping in mind both the national and social
objectives, bankers were given direction to help economically weaker section of the society
and also provide need-based finance to all the sectors of the economy with flexible and liberal
attitude. Now the banks provide various types of loans to farmers, working women,
professionals, and traders. They also provide education loan to the students and housing loans,
consumer loans, etc. Banks having big clients or big companies have to provide services like
personalized banking to their clients because these customers do not believe in running about
and waiting in queues for getting their work done. The bankers also have to provide these
customers with special provisions and at times with benefits like food and parties. But the banks
do not mind incurring these costs because of the kind of business these clients bring for the
bank. Banks have changed the culture of human life in India and have made life much easier
for the people.
TECHNOLOGICAL
Technology environment plays a very important role in bank’s internal control.The latest
developments in technology like computer and telecommunication have promoted the bankers
to change the concept of branch banking to anywhere banking. The use of ATM and Internet
banking has allowed ‘anytime, anywhere banking’ facilities. Automatic voice recorders now
answer simple queries, currency accounting machines makes the job easier and self-service
counters are now encouraged. Credit card facility has encouraged an era of cashless society.
Today MasterCard and Visa card are the two most popular cards used world over. The banks
have now started issuing smartcards or debit cards to be used for making payments. These are
also called as electronic purse. Some of the banks have also started home banking through
telecommunication facilities and computer technology by using terminals installed at
customers home and they can make the balance inquiry, get the statement of accounts, give
instructions for fund transfers, etc. Through ECS we can receive the dividends and interest
directly to our account avoiding the delay or chance of losing the post. Today banks are also
using SMS and Internet as major tool of promotions and giving great utility to its customers.
For example SMS functions through simple text messages sent from your mobile. The
messages are then recognized by the bank to provide you with the required information. All
these technological changes have forced the bankers adopt customer-based approach instead
of product-based approach.
For example SMS functions through simple text messages sent from your mobile. The
messages are then recognized by the bank to provide you with the required information. All
these technological changes have forced the bankers adopt customer-based approach instead
of product-based approach.
Chapter 2
Theoretical Framework and Concepts
Theoretical Framework and Concepts
2.1 Details of theory and concept
The banking industry of India is in the midst of an Information technology revolution. A
combination of regulatory and competitive reasons has led to increasing importance of total
banking automation in this industry. Information technology has basically been used under
different avenues in banking. One is communication and connectivity and another one is
business process reengineering. Information technology enables difficult 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.
Information technology has changed the contours of 3 major functions being performed by the
banks i.e. access to liquidity, transformation of assets and then monitoring of risks. Further,
information technology and the communication networking systems have a vital bearing on the
efficiency of money, capital and foreign exchange market.
The commercial banks went for Total Branch Automation Packages for computerization. The
middle and late 90s witnessed the storm of financial reforms, deregulation, globalization etc.
coupled with rapid revolution in communication technologies and evolution of novel concept
of convergence of computer and communication technologies, like internet, mobile phones
etc.. It changed the face of Indian banking system completely.
2.1 Literature and Related articles
Thakur, Rakhi; Srivastava, Mala. (2013): The paper studies the factors influencing
the adoption intention of mobile commerce. Perceived usefulness, perceived ease of use and
social influence are found to be significant dimensions of technology adoption readiness to use
mobile commerce while facilitating conditions were not found to be significant. The results of
the research study also indicate the perceived credibility risk defined by security risk and
privacy risk are significantly associated with behavioural intention in negative relation, which
indicates that security and privacy concerns are important in deterring customers from using
mobile commerce. This research study developed an integrated model for behavioural intention
towards financial innovations. Practical implications of this study is one of the few empirical
studies which have investigated the adoption of mobile commerce in India, which is considered
one of the fastest growing countries in terms of mobile usage. The study relates to inclusion of
The banking industry of India is in the midst of an Information technology revolution. A
combination of regulatory and competitive reasons has led to increasing importance of total
banking automation in this industry. Information technology has basically been used under
different avenues in banking. One is communication and connectivity and another one is
business process reengineering. Information technology enables difficult 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.
Information technology has changed the contours of 3 major functions being performed by the
banks i.e. access to liquidity, transformation of assets and then monitoring of risks. Further,
information technology and the communication networking systems have a vital bearing on the
efficiency of money, capital and foreign exchange market.
The commercial banks went for Total Branch Automation Packages for computerization. The
middle and late 90s witnessed the storm of financial reforms, deregulation, globalization etc.
coupled with rapid revolution in communication technologies and evolution of novel concept
of convergence of computer and communication technologies, like internet, mobile phones
etc.. It changed the face of Indian banking system completely.
2.1 Literature and Related articles
Thakur, Rakhi; Srivastava, Mala. (2013): The paper studies the factors influencing
the adoption intention of mobile commerce. Perceived usefulness, perceived ease of use and
social influence are found to be significant dimensions of technology adoption readiness to use
mobile commerce while facilitating conditions were not found to be significant. The results of
the research study also indicate the perceived credibility risk defined by security risk and
privacy risk are significantly associated with behavioural intention in negative relation, which
indicates that security and privacy concerns are important in deterring customers from using
mobile commerce. This research study developed an integrated model for behavioural intention
towards financial innovations. Practical implications of this study is one of the few empirical
studies which have investigated the adoption of mobile commerce in India, which is considered
one of the fastest growing countries in terms of mobile usage. The study relates to inclusion of
both utilitarian and credibility aspect of adoption intention. It gives an empirical basis on which
mobile and banking companies can base their mobile payments marketing strategy.
Kalaiarasi, H & Srividya, V. 3 (Jul-Sep 2012): Mobile
banking as a new channel to the existing banking channels provides convenient and cost
efficient banking services anytime anywhere. It is observed that, though India has strong
potential for mobile banking only 5% of mobile subscribers are registered users of mobile
banking. Attracting the new customers may not be easy than retaining the existing mobile
banking customers 2009). Hence the current research focuses on the factors influencing actual
usage of mobile banking services. The results shows that, Indians mobile banking usage is
influenced by ease of mobile banking technology, its suitability to the user’s lifestyle and the
benefits like mobility and mobile transactions. However customer’s perception towards
security of mobile transactions and privacy fears demotivates actual usage.
Tenkasi Taluk & Devasena, S Valli, (Jan 2012): Banking system is
the backbone of the economy and Information Technology (IT) in turn has become the
backbone of banking activities. Technology, which was playing a supportive role in banking,
has come to the forefront with the ever-increasing challenges and requirements. Technology to
start with was a business enabler and now has become a business driver. The Banks cannot
think of introducing a financial product without IT support. Be it customer service,
transactions, remittances, audit, marketing, pricing or any other activity in the Banks, IT plays
an important role not to complete the activity with high efficiency but also has the potential to
innovate and meet the future requirements. The Banking Sector was early adopter of
technology and in that way set an example to the other industries the need to opt for automation
for taking full advantage in operational efficiency.
Palani and Yasodha P. (Apr 2012): The research paper is focused on
customer’s perceptions on mobile banking offered by Indian Overseas Bank and it also focuses
on the various drivers that drive mobile banking consumers.. The results of this study showed
that gender, education and income of the consumers play an important role in usage of mobile
banking. Most of the researches are focused on the acceptance of the mobile banking
technology due to which not much research has been conducted on people. The research reveals
that if skills can be upgraded among the consumers there will be greater willingness on the part
of consumers toward the use of Mobile banking. Some the factors like security trust, gender,
mobile and banking companies can base their mobile payments marketing strategy.
Kalaiarasi, H & Srividya, V. 3 (Jul-Sep 2012): Mobile
banking as a new channel to the existing banking channels provides convenient and cost
efficient banking services anytime anywhere. It is observed that, though India has strong
potential for mobile banking only 5% of mobile subscribers are registered users of mobile
banking. Attracting the new customers may not be easy than retaining the existing mobile
banking customers 2009). Hence the current research focuses on the factors influencing actual
usage of mobile banking services. The results shows that, Indians mobile banking usage is
influenced by ease of mobile banking technology, its suitability to the user’s lifestyle and the
benefits like mobility and mobile transactions. However customer’s perception towards
security of mobile transactions and privacy fears demotivates actual usage.
Tenkasi Taluk & Devasena, S Valli, (Jan 2012): Banking system is
the backbone of the economy and Information Technology (IT) in turn has become the
backbone of banking activities. Technology, which was playing a supportive role in banking,
has come to the forefront with the ever-increasing challenges and requirements. Technology to
start with was a business enabler and now has become a business driver. The Banks cannot
think of introducing a financial product without IT support. Be it customer service,
transactions, remittances, audit, marketing, pricing or any other activity in the Banks, IT plays
an important role not to complete the activity with high efficiency but also has the potential to
innovate and meet the future requirements. The Banking Sector was early adopter of
technology and in that way set an example to the other industries the need to opt for automation
for taking full advantage in operational efficiency.
Palani and Yasodha P. (Apr 2012): The research paper is focused on
customer’s perceptions on mobile banking offered by Indian Overseas Bank and it also focuses
on the various drivers that drive mobile banking consumers.. The results of this study showed
that gender, education and income of the consumers play an important role in usage of mobile
banking. Most of the researches are focused on the acceptance of the mobile banking
technology due to which not much research has been conducted on people. The research reveals
that if skills can be upgraded among the consumers there will be greater willingness on the part
of consumers toward the use of Mobile banking. Some the factors like security trust, gender,
education, religion, and price can have minimal effect on consumer mindset towards Mobile
banking compared to the other factors.
Sreelatha. T, CH.ChandraShekar (2012) identified that information technology promises to
change the pace of banking in the next few years. Mobile banking and internet banking are
going to be indoor in the banking sector in future. Even though IT systems are complex and
sophisticated but they are „ energy guzzlers‟.
2.3 Background information
Banking started off based on paper journals and banking books, and you were limited to
banking at a single branch. Technology removed the need to bank at a single branch and
enabled you to bank at various branches of your bank. Technology further enabled you to not
go onto a branch: you could withdraw cash at an ATM, first your banks’ ATMs then at other
banks’ ATM machines. Technology further allowed you to perform various transactions via
the internet and mobile banking - you could now start to create your own beneficiaries and
perform local and international payments without going into a branch.
Some banks even allowed you to open accounts without going into a branch - opening banking
up to rural folk, previously unbanked people.
Clearing and settlement moved from days to hours and minutes in some cases - speeding up
business transactions and allowing goods to be released sooner. What was previously
calculated in batch is now real-time. You can now get a more real-time and accurate view of
your finances, like never before.
Banking technology has enabled banks to prevent fraud and unauthorised access to your
money. Chip and pin on cards ensures cards cannot be cloned. 3D Secure technology ensure
it’s you behind a card not present transaction.
Multiple apps on card chip means you could consolidate cards, carrying less plastic in your
wallet.
Travel wallets have meant people don’t need travellers cheques, and need to arrange less (if
any) foreign currency when travelling.
banking compared to the other factors.
Sreelatha. T, CH.ChandraShekar (2012) identified that information technology promises to
change the pace of banking in the next few years. Mobile banking and internet banking are
going to be indoor in the banking sector in future. Even though IT systems are complex and
sophisticated but they are „ energy guzzlers‟.
2.3 Background information
Banking started off based on paper journals and banking books, and you were limited to
banking at a single branch. Technology removed the need to bank at a single branch and
enabled you to bank at various branches of your bank. Technology further enabled you to not
go onto a branch: you could withdraw cash at an ATM, first your banks’ ATMs then at other
banks’ ATM machines. Technology further allowed you to perform various transactions via
the internet and mobile banking - you could now start to create your own beneficiaries and
perform local and international payments without going into a branch.
Some banks even allowed you to open accounts without going into a branch - opening banking
up to rural folk, previously unbanked people.
Clearing and settlement moved from days to hours and minutes in some cases - speeding up
business transactions and allowing goods to be released sooner. What was previously
calculated in batch is now real-time. You can now get a more real-time and accurate view of
your finances, like never before.
Banking technology has enabled banks to prevent fraud and unauthorised access to your
money. Chip and pin on cards ensures cards cannot be cloned. 3D Secure technology ensure
it’s you behind a card not present transaction.
Multiple apps on card chip means you could consolidate cards, carrying less plastic in your
wallet.
Travel wallets have meant people don’t need travellers cheques, and need to arrange less (if
any) foreign currency when travelling.
2.4 Importance of concept
Importance of Technology of Banking: Many of the IT initiatives of banks started in the late
1990s, or early 2000, with an emphasis on the adoption of core banking solutions (CBS),
automation of branches and centralisation of operations in the CBS. Over the last decade, most
of the banks completed the transformation to technology-driven organisations. Moving from a
manual, scale-constrained environment to a global presence with automated systems and
processes, it is difficult to envisage the adverse scenario where the sector was in the era before
the reforms, when a simple deposit or withdrawal of cash would require a day. ATMs, mobile
banking and online bill payments facilities to vendors and utility service providers have almost
obviated the need for customers to visit a branch. Branches are also transforming from
operating as transaction processing points into relationship management hubs…
Introduction of computer and other electronic technologies in banks has the following
advantages which state the importance of such new technology in banking:
1) Increase in Efficiency : Efficient and quick service to customer can be provided with the
help of modern technologies.
2) Handling of Information: Creation of up-to-date monitoring and information system and
strengthening internal control and housekeeping and reporting functions are provided. Sorting
of information becomes easy.
3) Cost Reduction: There is reduction in cost including floor space because of the use of
modern techonology.
4) Accuracy: The clearing of cheques, pass book entries, inter-branch and inter-bank
reconciliation and such other functions can now be carried out quickly, correctly and legibly
with modern technology.
5) Customer Service: With internet facility, the customers need not go to the bank office. All
banking transactions and updating of accounts can be done while at home or in transit.
Networking means sharing of information, giving messages and being in face to face contact
even when apart. It is the meeting without moving.
6) Easy Communication: Internet connects thousands of computers which can work 24 hours
a day throughout the year. There is no more the tyranny of working hours. The business of
Importance of Technology of Banking: Many of the IT initiatives of banks started in the late
1990s, or early 2000, with an emphasis on the adoption of core banking solutions (CBS),
automation of branches and centralisation of operations in the CBS. Over the last decade, most
of the banks completed the transformation to technology-driven organisations. Moving from a
manual, scale-constrained environment to a global presence with automated systems and
processes, it is difficult to envisage the adverse scenario where the sector was in the era before
the reforms, when a simple deposit or withdrawal of cash would require a day. ATMs, mobile
banking and online bill payments facilities to vendors and utility service providers have almost
obviated the need for customers to visit a branch. Branches are also transforming from
operating as transaction processing points into relationship management hubs…
Introduction of computer and other electronic technologies in banks has the following
advantages which state the importance of such new technology in banking:
1) Increase in Efficiency : Efficient and quick service to customer can be provided with the
help of modern technologies.
2) Handling of Information: Creation of up-to-date monitoring and information system and
strengthening internal control and housekeeping and reporting functions are provided. Sorting
of information becomes easy.
3) Cost Reduction: There is reduction in cost including floor space because of the use of
modern techonology.
4) Accuracy: The clearing of cheques, pass book entries, inter-branch and inter-bank
reconciliation and such other functions can now be carried out quickly, correctly and legibly
with modern technology.
5) Customer Service: With internet facility, the customers need not go to the bank office. All
banking transactions and updating of accounts can be done while at home or in transit.
Networking means sharing of information, giving messages and being in face to face contact
even when apart. It is the meeting without moving.
6) Easy Communication: Internet connects thousands of computers which can work 24 hours
a day throughout the year. There is no more the tyranny of working hours. The business of
banks with customers, head office, other banks, branches is being fully computerised in western
countries and India has also to move in that direction to service in international competition.
2.5 Significance of the concept
Since information technologies have been found to play a major role in increasing the
efficiency of banking services in the various industries or firms including banking industry the
research into the significance of information technology in the banking industry becomes
important. This is necessary because it would give very good understanding of what
information technology is all about and their contribution to increases efficiency in our banking
system.
One of the most promising significance of this study is that several banks today are using neural
network programs to detect credit fraud. Also it is being used by some leading investment bank
to track stock price pattern and predict their movements. Information technology in banking
sector has made it possible for home banking smart phones with screen built in moderns and
programmable micro-processors to enable the customers access a verity of financial services
from home.
Information technology in banking industry has made possible for the use of electronic funds
transfer at point of sales with pay-now-buy-later and credit cards had “buy-now-pay-later.
Electronic funds transfer at point of sale (EFPOS) Signify buy-now-paynow” and even without
cash transaction if the user present her automated tellers machine card when she buyers goods
and electronic funds transfer at point of sale system will immediately debts her bank account.
Through the use of smart card the processor type smart cards with in built integrated circuit or
micro-chips offers a wide range of transaction opportunities in the banking industry with the
help of information technology.
Information technology in banking sector has help through electronic data interchange (EDI)
this is typically denotes paperless financial transactions across the location. Electronic data
interchange (EDI) is fast becoming the standard for inter-company transaction. Electronic data
interchange (EDI) is an example of the almost complete automation of an e-commerce supply
chain process. Electronic data inerter change (EDI) is still a popular data transmission format
among major trading partners primary to automate repetitive transactions
countries and India has also to move in that direction to service in international competition.
2.5 Significance of the concept
Since information technologies have been found to play a major role in increasing the
efficiency of banking services in the various industries or firms including banking industry the
research into the significance of information technology in the banking industry becomes
important. This is necessary because it would give very good understanding of what
information technology is all about and their contribution to increases efficiency in our banking
system.
One of the most promising significance of this study is that several banks today are using neural
network programs to detect credit fraud. Also it is being used by some leading investment bank
to track stock price pattern and predict their movements. Information technology in banking
sector has made it possible for home banking smart phones with screen built in moderns and
programmable micro-processors to enable the customers access a verity of financial services
from home.
Information technology in banking industry has made possible for the use of electronic funds
transfer at point of sales with pay-now-buy-later and credit cards had “buy-now-pay-later.
Electronic funds transfer at point of sale (EFPOS) Signify buy-now-paynow” and even without
cash transaction if the user present her automated tellers machine card when she buyers goods
and electronic funds transfer at point of sale system will immediately debts her bank account.
Through the use of smart card the processor type smart cards with in built integrated circuit or
micro-chips offers a wide range of transaction opportunities in the banking industry with the
help of information technology.
Information technology in banking sector has help through electronic data interchange (EDI)
this is typically denotes paperless financial transactions across the location. Electronic data
interchange (EDI) is fast becoming the standard for inter-company transaction. Electronic data
interchange (EDI) is an example of the almost complete automation of an e-commerce supply
chain process. Electronic data inerter change (EDI) is still a popular data transmission format
among major trading partners primary to automate repetitive transactions
2.6 Future scope and impact of the concept
The digital age is changing how people interact and do business on a day-to-day basis, and
technological advancements are continuing to influence the future of banking around the world.
An increasing demand for a digital banking experience from millennials and Gen Zers
is transforming how the entire banking industry operates.
From retail and mobile banking, to neobank startups, technology has its hand in seemingly
every aspect of the banking industry; and, the influence of technology will continue to launch
banking into a digitized future.
Future of Retail Banking
Retail banking refers to the specific services banks can offer to consumers – such as savings
and checking accounts, credit and debit cards, and loans. Consumers' growing desire to access
financial services from digital channels has led to a surge in new banking technologies that are
reconceptualizing the entire retail banking market.
Technology geared toward improving retail banks' operational efficiency is positively
impacting the market. According to Business Insider Intelligence, 39% of retail banking
executives say that reducing costs is where technology has the greatest impact, compared to
only 24% who say it's improving customer experience.
Retail banks are also launching platforms in the Banking-as-a-Service (BaaS) space to remain
competitive. For example, UK neobank Starling used to exclusively offer business-to-
consumer (B2C) retail banking services; but, after launching a BaaS platform, Starling
diversified its product and revenue streams, helping it remain relevant in the neobank space.
Future of Mobile Banking
Mobile banking has become the go-to method for users to make deposits, account transfers,
and monitor their spendings and earnings. According to Business Insider Intelligence's Mobile
Banking Competitive Edge Study, a massive 89% of survey respondents said they use mobile
banking.
A top concern consumers have when choosing mobile banks is security. The fear of data breach
increases the demand for services that keep users' data secure – allowing consumers to place
The digital age is changing how people interact and do business on a day-to-day basis, and
technological advancements are continuing to influence the future of banking around the world.
An increasing demand for a digital banking experience from millennials and Gen Zers
is transforming how the entire banking industry operates.
From retail and mobile banking, to neobank startups, technology has its hand in seemingly
every aspect of the banking industry; and, the influence of technology will continue to launch
banking into a digitized future.
Future of Retail Banking
Retail banking refers to the specific services banks can offer to consumers – such as savings
and checking accounts, credit and debit cards, and loans. Consumers' growing desire to access
financial services from digital channels has led to a surge in new banking technologies that are
reconceptualizing the entire retail banking market.
Technology geared toward improving retail banks' operational efficiency is positively
impacting the market. According to Business Insider Intelligence, 39% of retail banking
executives say that reducing costs is where technology has the greatest impact, compared to
only 24% who say it's improving customer experience.
Retail banks are also launching platforms in the Banking-as-a-Service (BaaS) space to remain
competitive. For example, UK neobank Starling used to exclusively offer business-to-
consumer (B2C) retail banking services; but, after launching a BaaS platform, Starling
diversified its product and revenue streams, helping it remain relevant in the neobank space.
Future of Mobile Banking
Mobile banking has become the go-to method for users to make deposits, account transfers,
and monitor their spendings and earnings. According to Business Insider Intelligence's Mobile
Banking Competitive Edge Study, a massive 89% of survey respondents said they use mobile
banking.
A top concern consumers have when choosing mobile banks is security. The fear of data breach
increases the demand for services that keep users' data secure – allowing consumers to place
holds on credit or debit cards, schedule travel alerts, and file and review card transaction
disputes are some successful security banking features.
Mobile wallets are another up-and-coming feature in mobile banking. Mobile wallets are
applications that emphasize convenience; they allow users to make purchases online or in-store
with their smartphones – without ever having to take out their physical credit card.
Successful mobile banking options also include money management features that help users
cut spending and grow savings. The future of mobile banking points toward offering savings
tools and financial wellness scores, which is seen as particularly important among millennials.
Future of Online Banking
The popularity of mobile banking has surpassed that of online banking, and the overall number
of online customers has slowed worldwide. According to Business Insider Intelligence, mobile
banking is growing at five times the rate of online banking, and half of all online customers are
also mobile banking users.
Despite this growing popularity, some banks still fall short on the demand for mobile tasks,
like bill pay and reward redemption, causing them to push users to online banking. However,
even this push won't be enough to popularize online banking as millenials and Gen-Zers
continue gravitating toward the mobile market.
Future of Digital-Only Banks
Digital-only banks, also known as neobanks, are redefining the future of banking around the
world. Though off to a slow start in the US due to high regulatory barriers, recent developments
and the loosening of regulations suggest that US neobanks are set to take off.
San Francisco-based neobank Chime has attracted over 2 million consumers and is adding more
per month than Wells Fargo or Citi – demonstrating the shift toward digital channels. The
development of more neobanks in the US will bring awareness to digital only banking, and
eventually wane-out traditional banking competitors.
According to Business Insider Intelligence's Evolution of the US Neobank Market report, the
increasing competitive digital banking only landscape is going to cause banks to overhaul their
entire business, catering to the demands of the digital era.
disputes are some successful security banking features.
Mobile wallets are another up-and-coming feature in mobile banking. Mobile wallets are
applications that emphasize convenience; they allow users to make purchases online or in-store
with their smartphones – without ever having to take out their physical credit card.
Successful mobile banking options also include money management features that help users
cut spending and grow savings. The future of mobile banking points toward offering savings
tools and financial wellness scores, which is seen as particularly important among millennials.
Future of Online Banking
The popularity of mobile banking has surpassed that of online banking, and the overall number
of online customers has slowed worldwide. According to Business Insider Intelligence, mobile
banking is growing at five times the rate of online banking, and half of all online customers are
also mobile banking users.
Despite this growing popularity, some banks still fall short on the demand for mobile tasks,
like bill pay and reward redemption, causing them to push users to online banking. However,
even this push won't be enough to popularize online banking as millenials and Gen-Zers
continue gravitating toward the mobile market.
Future of Digital-Only Banks
Digital-only banks, also known as neobanks, are redefining the future of banking around the
world. Though off to a slow start in the US due to high regulatory barriers, recent developments
and the loosening of regulations suggest that US neobanks are set to take off.
San Francisco-based neobank Chime has attracted over 2 million consumers and is adding more
per month than Wells Fargo or Citi – demonstrating the shift toward digital channels. The
development of more neobanks in the US will bring awareness to digital only banking, and
eventually wane-out traditional banking competitors.
According to Business Insider Intelligence's Evolution of the US Neobank Market report, the
increasing competitive digital banking only landscape is going to cause banks to overhaul their
entire business, catering to the demands of the digital era.
Banking Technology Trends
The future of banking technology is driven by consumers, especially Gen Zers, who see
technology as something that enhances their lives. A common trend in banking technology is
using an application programming interface (API) to make proprietary data available to anyone
who has the consumer's permission to access it.
APIs could be used to enable a bank's mobile app to pull down customer account information.
Fintechs have also used API technology to enable their businesses to work, and their success
is encouraging competitors to develop their own APIs.
Additionally, Business Insider Intelligence reported that 48% of banking executives believe
new technologies like blockchain and artificial intelligence (AI) will have the greatest impact
on banking through 2020. According to Business Insider Intelligence, banks are exploring
blockchain technology in hopes of streamlining processes and cutting costs.
Consumers can already see AI being used by most banks through chatbots in the front
office. Banks are using AI to smooth customer identification and authentication, while also
mimicking live employees through chatbots and voice assistants.
Banking Industry Analysis
With so many different facets of the banking industry undergoing change, it's crucial for those
connected to the banking industry to be informed and stay ahead. That's why Business Insider
Intelligence is launching Banking, our latest research coverage area, to keep you up to date on
the latest banking trends and shakeups.
The future of banking technology is driven by consumers, especially Gen Zers, who see
technology as something that enhances their lives. A common trend in banking technology is
using an application programming interface (API) to make proprietary data available to anyone
who has the consumer's permission to access it.
APIs could be used to enable a bank's mobile app to pull down customer account information.
Fintechs have also used API technology to enable their businesses to work, and their success
is encouraging competitors to develop their own APIs.
Additionally, Business Insider Intelligence reported that 48% of banking executives believe
new technologies like blockchain and artificial intelligence (AI) will have the greatest impact
on banking through 2020. According to Business Insider Intelligence, banks are exploring
blockchain technology in hopes of streamlining processes and cutting costs.
Consumers can already see AI being used by most banks through chatbots in the front
office. Banks are using AI to smooth customer identification and authentication, while also
mimicking live employees through chatbots and voice assistants.
Banking Industry Analysis
With so many different facets of the banking industry undergoing change, it's crucial for those
connected to the banking industry to be informed and stay ahead. That's why Business Insider
Intelligence is launching Banking, our latest research coverage area, to keep you up to date on
the latest banking trends and shakeups.
2.7 Last 10 Year in Which technology are change
NEWTECHNOLOGIES
The arrival of Payment banks and FinTech companies have made the existing banks to
acquire new technologies, to work on totally new approaches to serve the customers and come
out with innovations and new products supported by new processes to retain their customers.
The last decade brought new technology solutions to the Indian banks through CBS, ATM
Networks, Internet Banking, etc. In recent fimes, many banks have implemented digital
banking – POS, MPOS, Mobile/Tablet Apps, mobile wallets, social media to capture the
valuable pie of the younger generation.
Since September 2016, more than 51 banks have launched their UPI application, which
enables a customer of any bank to make payments to a customer of any other bank, without
demanding complete disclosure of account details of the remit er and beneficiary. The number
of UPI transactions her demonetisation on has grown exponentially to 10 million transactions
amounting to Rs 31,000 crores in June 2017 alone.
The BHIM application launched by the Prime Minister on 30
th
December 2016, has
been downloaded by over 16 million customers within a short fime of six months. Using
BHIM, a customer can send, receive, collect money using virtual payment address (VPA),
Account number + IFSC, Scan and Pay using QR code. In June 2017, there were more than 4.6
million transactions under BHIM amounting to Rs 14,867 crores across 49 banks.
Aadhaar-based Payments
The introduction of Aadhaar card and Aadhaar authentication through UIDAI has been a
game changer in the Indian banking technology in the last one year. The E-KYC has made
it easy for the customers and banks to open accounts, meefing the KYC requirements. The
Aadhaar authentication has while BHIM is an extension of the UPI applications of the
banks, BHIM Aadhaar is an extension of AEPS. BHIM Aadhaar is the common mobile,
introduced by National Payments Corporation of India (NPCI), for any merchant associated
with any acquiring bank on BHIM Aadhaar Pay service, to allow the merchant to accept
payment from a customer of any bank, by authenticating the customer's biometrics –
currently only fingerprints, directly from customer’s bank ac c o un t and receive tstringent
security standards for the biometric devices to be used with BHIM Aadhaar application.
NEWTECHNOLOGIES
The arrival of Payment banks and FinTech companies have made the existing banks to
acquire new technologies, to work on totally new approaches to serve the customers and come
out with innovations and new products supported by new processes to retain their customers.
The last decade brought new technology solutions to the Indian banks through CBS, ATM
Networks, Internet Banking, etc. In recent fimes, many banks have implemented digital
banking – POS, MPOS, Mobile/Tablet Apps, mobile wallets, social media to capture the
valuable pie of the younger generation.
Since September 2016, more than 51 banks have launched their UPI application, which
enables a customer of any bank to make payments to a customer of any other bank, without
demanding complete disclosure of account details of the remit er and beneficiary. The number
of UPI transactions her demonetisation on has grown exponentially to 10 million transactions
amounting to Rs 31,000 crores in June 2017 alone.
The BHIM application launched by the Prime Minister on 30
th
December 2016, has
been downloaded by over 16 million customers within a short fime of six months. Using
BHIM, a customer can send, receive, collect money using virtual payment address (VPA),
Account number + IFSC, Scan and Pay using QR code. In June 2017, there were more than 4.6
million transactions under BHIM amounting to Rs 14,867 crores across 49 banks.
Aadhaar-based Payments
The introduction of Aadhaar card and Aadhaar authentication through UIDAI has been a
game changer in the Indian banking technology in the last one year. The E-KYC has made
it easy for the customers and banks to open accounts, meefing the KYC requirements. The
Aadhaar authentication has while BHIM is an extension of the UPI applications of the
banks, BHIM Aadhaar is an extension of AEPS. BHIM Aadhaar is the common mobile,
introduced by National Payments Corporation of India (NPCI), for any merchant associated
with any acquiring bank on BHIM Aadhaar Pay service, to allow the merchant to accept
payment from a customer of any bank, by authenticating the customer's biometrics –
currently only fingerprints, directly from customer’s bank ac c o un t and receive tstringent
security standards for the biometric devices to be used with BHIM Aadhaar application.
With availability of these devices improving, there will be a tremendous growth in
deployment of BHIM Aadhaar with merchants, especially in RUSU areas.
While Aadhaar has enabled the DBT system helping the GoI to save thousands of crores
by plugging loop- holes and eliminating subsidies in welfare schemes, the new nofificafion
under PMLA requiring all accounts to be linked with Aadhaar will further strengthen GoI
in its drive against black money. The increased use of Aadhaar authentication will help the
banks in improving operational risk management in opening of accounts and transaction
payments.
QR Code to Enhance Quantitative Reach out
In recent fimes, payments industry in India has seen a surge in QR Code based payments
solution being implemented by many banks and third party he sale proceeds instantaneously
directly into merchant’s own bank account. The BHIM Aadhaar was launched by the
technology providers for their own “Wallets”. A QR based payment solution represents a
new channel of initiating and accepting payments between buyers and sellers (or consumers
and merchants) using the mobile phone. This is one technology which can be easily used
to expand electronic payments for millions of small retail merchants who, do not have the
options to undertake a traditional POS with card swipe EDC terminals. The Reserve Bank
of India, had advised few Prime Minister on 14th April 2017 and banks have on- boarded
thousands of merchants under BHIM Aadhaar. Detailed discussions with banks and NPCI
on security aspects, UIDAI had come out with authorised card networks in the country,
desirous of implementing QR Code based card payment solutions, to put in place common
interoperable solution for such QR Code. Accordingly, the authorised card networks
namely VISA, Mastercard, American Express and NPCI worked jointly with banks to
formulate common standards for QR Codes to be placed at merchants’ establishments and
/ or e- commerce/m-commerce websites. The Bharat QR Code was launched by Shri
Gandhi, Deputy Governor of RBI on 20th February 2017. The Bharat QR code functions
as a digital POS and does not require any physical POS infrastructure.
The advantage of “Bharat QR” code is that merchants and customers need to deal with one
standard logo, which will be displayed at the merchant eliminating the requirement of
multiple QR codes for different cards and banks. It is a COMMON QR code across banks
and network cards. The customer of any bank can download the QR application from his
bank and first fame link his debit/credit card/prepaid card. Using the application on his
deployment of BHIM Aadhaar with merchants, especially in RUSU areas.
While Aadhaar has enabled the DBT system helping the GoI to save thousands of crores
by plugging loop- holes and eliminating subsidies in welfare schemes, the new nofificafion
under PMLA requiring all accounts to be linked with Aadhaar will further strengthen GoI
in its drive against black money. The increased use of Aadhaar authentication will help the
banks in improving operational risk management in opening of accounts and transaction
payments.
QR Code to Enhance Quantitative Reach out
In recent fimes, payments industry in India has seen a surge in QR Code based payments
solution being implemented by many banks and third party he sale proceeds instantaneously
directly into merchant’s own bank account. The BHIM Aadhaar was launched by the
technology providers for their own “Wallets”. A QR based payment solution represents a
new channel of initiating and accepting payments between buyers and sellers (or consumers
and merchants) using the mobile phone. This is one technology which can be easily used
to expand electronic payments for millions of small retail merchants who, do not have the
options to undertake a traditional POS with card swipe EDC terminals. The Reserve Bank
of India, had advised few Prime Minister on 14th April 2017 and banks have on- boarded
thousands of merchants under BHIM Aadhaar. Detailed discussions with banks and NPCI
on security aspects, UIDAI had come out with authorised card networks in the country,
desirous of implementing QR Code based card payment solutions, to put in place common
interoperable solution for such QR Code. Accordingly, the authorised card networks
namely VISA, Mastercard, American Express and NPCI worked jointly with banks to
formulate common standards for QR Codes to be placed at merchants’ establishments and
/ or e- commerce/m-commerce websites. The Bharat QR Code was launched by Shri
Gandhi, Deputy Governor of RBI on 20th February 2017. The Bharat QR code functions
as a digital POS and does not require any physical POS infrastructure.
The advantage of “Bharat QR” code is that merchants and customers need to deal with one
standard logo, which will be displayed at the merchant eliminating the requirement of
multiple QR codes for different cards and banks. It is a COMMON QR code across banks
and network cards. The customer of any bank can download the QR application from his
bank and first fame link his debit/credit card/prepaid card. Using the application on his
smartphone, the customer will scan the Bharat QR code with the merchant, enter the
amount, authenticate and pay. The QR code will contain the beneficiary details, merchant
code and the payment will directly go to the account maintained by the merchant with his
bank. The payment notification will be sent to both the merchant and the customer
immediately. Customer need not disclose the details of his card to the merchant, guarding
him from skimming frauds. In case of online purchases, the QR code will be pre- populated
by the amount also.
STRENGTHENING SECURITY
With increase in digital transactions, in recent fames there has been a spurt in the number
of incidents of organised gangs from few states coming cybercrimes by making calls,
sending mails, etc. to gullible customers to get the confidential details like card number,
username, password, PIN, OTP, CVV, etc. This is causing concern to the banks and the
regulator. To educate the public to do safe and secure banking, in December 2016, the IBA
conducted a week-long security awareness campaign through media – TV, FM, Print and
Bill boards at public places and branches.
The Reserve Bank of India has come out with guidelines for strengthening the cyber
security of banks and banks are complying with the same. An SOC – security operations
centre has been set up in every bank to monitor and improve the cyber security defence.
Some banks have started using Artificial Intelligence for fraud prom for monitoring
transaction through pat ern recognition, geographies, etc.
USER-FRIENDLY BANKING
Earlier the banks were focusing on applications which worked internally within the banks
and its own customers, now the trend is more on inter-operable apps like UPI, BHIM,
Aadhaar pay, etc., where customer of one bank can easily push/pull /request money from
customers of other banks. There is more collaboration amongst banks. Aadhaar
authentication is going to have major impact on all payment applications. Along with
Banks, FinTech’s also are expected to contribute to the Digitisation of Financial Services
and help in moving India towards a less-cash Digital India.
amount, authenticate and pay. The QR code will contain the beneficiary details, merchant
code and the payment will directly go to the account maintained by the merchant with his
bank. The payment notification will be sent to both the merchant and the customer
immediately. Customer need not disclose the details of his card to the merchant, guarding
him from skimming frauds. In case of online purchases, the QR code will be pre- populated
by the amount also.
STRENGTHENING SECURITY
With increase in digital transactions, in recent fames there has been a spurt in the number
of incidents of organised gangs from few states coming cybercrimes by making calls,
sending mails, etc. to gullible customers to get the confidential details like card number,
username, password, PIN, OTP, CVV, etc. This is causing concern to the banks and the
regulator. To educate the public to do safe and secure banking, in December 2016, the IBA
conducted a week-long security awareness campaign through media – TV, FM, Print and
Bill boards at public places and branches.
The Reserve Bank of India has come out with guidelines for strengthening the cyber
security of banks and banks are complying with the same. An SOC – security operations
centre has been set up in every bank to monitor and improve the cyber security defence.
Some banks have started using Artificial Intelligence for fraud prom for monitoring
transaction through pat ern recognition, geographies, etc.
USER-FRIENDLY BANKING
Earlier the banks were focusing on applications which worked internally within the banks
and its own customers, now the trend is more on inter-operable apps like UPI, BHIM,
Aadhaar pay, etc., where customer of one bank can easily push/pull /request money from
customers of other banks. There is more collaboration amongst banks. Aadhaar
authentication is going to have major impact on all payment applications. Along with
Banks, FinTech’s also are expected to contribute to the Digitisation of Financial Services
and help in moving India towards a less-cash Digital India.
Talk is Cheap
For all the talk and hype surrounding technologies like AI and blockchain, just a little more
than one in 10 mid-size ($500m to $50b assets) financial institutions will invest in chatbots
or machine learning this year according to a study from Cornerstone Advisors. What are
these institutions doing? For the most part, they're either talking about the technologies or
the technologies aren't even on their radar.
Already deployed
Plan to invest
in 2019
Executive team
is discussing
Not on radar
Robotic process
automation
(RPA)
5% 6% 31% 58%
Chatbots 2% 13% 45% 40%
Machine
learning
2% 12% 35% 51%
Blockchain 1% 4% 43% 52%
Source: Cornerstone Advisors survey of 305 mid-size banks and credit unions, Q4 2018
Follow the Money
What are the truly "hot" technologies in banking? They're the ones that banks and credit
unions actually invest in.
At the end of the past few years, Cornerstone has surveyed financial institutions to find out
which technologies they plan to add or replace in the coming year. Here are the top five for
2019:
1) Digital account opening. Not only was digital account opening the most-frequently cited
technology for addition or replacement, it was at the top of the list of technologies that banks
plan to pursue fintech partnerships for. Some institutions may not get what they're looking for,
however. According to Cornerstone Advisors partner Terence Roche:
If financial institutions believe that digital account opening will be the driver of deposit growth,
they may be disappointed. If their view of digital account opening is too narrowly focused on
account opening and doesn’t include a hefty focus on digital marketing, contextual product
For all the talk and hype surrounding technologies like AI and blockchain, just a little more
than one in 10 mid-size ($500m to $50b assets) financial institutions will invest in chatbots
or machine learning this year according to a study from Cornerstone Advisors. What are
these institutions doing? For the most part, they're either talking about the technologies or
the technologies aren't even on their radar.
Already deployed
Plan to invest
in 2019
Executive team
is discussing
Not on radar
Robotic process
automation
(RPA)
5% 6% 31% 58%
Chatbots 2% 13% 45% 40%
Machine
learning
2% 12% 35% 51%
Blockchain 1% 4% 43% 52%
Source: Cornerstone Advisors survey of 305 mid-size banks and credit unions, Q4 2018
Follow the Money
What are the truly "hot" technologies in banking? They're the ones that banks and credit
unions actually invest in.
At the end of the past few years, Cornerstone has surveyed financial institutions to find out
which technologies they plan to add or replace in the coming year. Here are the top five for
2019:
1) Digital account opening. Not only was digital account opening the most-frequently cited
technology for addition or replacement, it was at the top of the list of technologies that banks
plan to pursue fintech partnerships for. Some institutions may not get what they're looking for,
however. According to Cornerstone Advisors partner Terence Roche:
If financial institutions believe that digital account opening will be the driver of deposit growth,
they may be disappointed. If their view of digital account opening is too narrowly focused on
account opening and doesn’t include a hefty focus on digital marketing, contextual product
offerings, data-driven campaigns, and a very tight, easy fulfilment process, then it won’t matter
what investment they make. It won’t work.”
2) Person-to-person (P2P) payments. Venmo and Square may get a lot of press regarding
P2P payments, but banks (and credit unions) are the real leaders in the P2P payments
race. Consumers moved a little more than $300 billion in funds to other people through their
banks and credit unions in 2018, with Zelle accounting for about 40% of that. With nearly 230
institutions signed up--but only 60 currently offering the service--Zelle is poised to cannibalize
the bank volume and overtake PayPal.
P2P Transaction Volume
Banks aren't resting easy, however. P2P providers still represent a threat to their core payments
revenue.
When asked how likely they would be to use the P2P providers if they offered a general use
debit card, 44% of Millennials said that not only would they be very likely to use a PayPal
debit card, they might even make it their primary card. A quarter said that about Apple and
Google, and one in four said that about Venmo.
3) Customer relationship management (CRM). Hardly a new technology, there has been a
resurgence in investments in CRM among banks and credit unions over the past two years.
what investment they make. It won’t work.”
2) Person-to-person (P2P) payments. Venmo and Square may get a lot of press regarding
P2P payments, but banks (and credit unions) are the real leaders in the P2P payments
race. Consumers moved a little more than $300 billion in funds to other people through their
banks and credit unions in 2018, with Zelle accounting for about 40% of that. With nearly 230
institutions signed up--but only 60 currently offering the service--Zelle is poised to cannibalize
the bank volume and overtake PayPal.
P2P Transaction Volume
Banks aren't resting easy, however. P2P providers still represent a threat to their core payments
revenue.
When asked how likely they would be to use the P2P providers if they offered a general use
debit card, 44% of Millennials said that not only would they be very likely to use a PayPal
debit card, they might even make it their primary card. A quarter said that about Apple and
Google, and one in four said that about Venmo.
3) Customer relationship management (CRM). Hardly a new technology, there has been a
resurgence in investments in CRM among banks and credit unions over the past two years.
This resurgence reflects a pendulum shift from "distributed CRM," (i.e, CRM embedded in
point solutions like digital banking, loan origination and account opening systems) back to the
enterprise-wide deployments that were prevalent 10 to 15 years ago.
Does this mean that CRM is becoming a must-have in banks? Maybe not, according to
Cornerstone's Ryan Myers:
Despite an ever-growing list of compelling use cases, more clear paths to a legitimate ROI, and
the drool-worthy automation possibilities, CRM systems are a luxury good. The only way this
will change is if the recent wave of CRM implementations demonstrates such a convincing
return that onlookers are forced to adopt. While that may very well come to pass, it won’t be
this year."
That's for sure. The state of CRM in most financial institutions is abysmal. Few have a CRM
plan that outlines goals and priorities established by the senior management team, or have a
CRM scorecard with specific and realistic targets.
The pendulum may stay on the enterprise-wide deployment side for another couple of years,
but if banks don't get their CRM management practices and processes in order, the pendulum
will swing back to distributed CRM.
point solutions like digital banking, loan origination and account opening systems) back to the
enterprise-wide deployments that were prevalent 10 to 15 years ago.
Does this mean that CRM is becoming a must-have in banks? Maybe not, according to
Cornerstone's Ryan Myers:
Despite an ever-growing list of compelling use cases, more clear paths to a legitimate ROI, and
the drool-worthy automation possibilities, CRM systems are a luxury good. The only way this
will change is if the recent wave of CRM implementations demonstrates such a convincing
return that onlookers are forced to adopt. While that may very well come to pass, it won’t be
this year."
That's for sure. The state of CRM in most financial institutions is abysmal. Few have a CRM
plan that outlines goals and priorities established by the senior management team, or have a
CRM scorecard with specific and realistic targets.
The pendulum may stay on the enterprise-wide deployment side for another couple of years,
but if banks don't get their CRM management practices and processes in order, the pendulum
will swing back to distributed CRM.
4) New account/teller systems. According to digital futurist Brett King, author of Bank
4.0:
If there’s a place in the future for a branch to add some extraordinary value in engagement
that’s viable, I’m all for that. But using branches to open accounts and do traditional day-to-
day banking is not it. If you can’t deliver that in real time, you won’t survive.”
A lot of bankers disagree. The percentage of FIs planning to add or replace new account/teller
systems doubled between 2018 and 2019.
While the level of investment in new account/teller systems does reflect banks' continued
commitment to the branch channel, it's also driven by two other factors: 1) improving the in-
branch account opening experience, and 2) integrating (or at least coordinating) the digital and
branch account opening processes.
I'm betting new account/teller systems won't be one of the hot technologies in 2021, however.
5) Commercial loan origination systems (LOS). Many community banks are looking to grow
their commercial (vs. consumer) lending business by expanding beyond real estate into
commercial and industrial (C&I) loans. To do so, they're increasingly making investments in
commercial LOS to improve their speed to market. They'll need to--according to Cornerstone's
research, nearly seven in 10 financial institution executives think their commercial lending
capabilities aren't "future ready."
The Assimilation of AI and Blockchain
So when will technologies like AI and blockchain crack the top 5 hottest technologies? Never.
Not because those technologies won't be big, but because they're not standalone technologies
that most banks will invest in.
We're in a phase of technology development where AI is being assimilated into the
systems and apps that banks already deploy.
AI will become indistinguishable components of systems and tools like:
Commercial loan origination systems. Machine learning and RPA will be used to
identify potential commercial credit request needs, spread borrower financial
statements, and validate credit due diligence items and perform vendor order execution.
4.0:
If there’s a place in the future for a branch to add some extraordinary value in engagement
that’s viable, I’m all for that. But using branches to open accounts and do traditional day-to-
day banking is not it. If you can’t deliver that in real time, you won’t survive.”
A lot of bankers disagree. The percentage of FIs planning to add or replace new account/teller
systems doubled between 2018 and 2019.
While the level of investment in new account/teller systems does reflect banks' continued
commitment to the branch channel, it's also driven by two other factors: 1) improving the in-
branch account opening experience, and 2) integrating (or at least coordinating) the digital and
branch account opening processes.
I'm betting new account/teller systems won't be one of the hot technologies in 2021, however.
5) Commercial loan origination systems (LOS). Many community banks are looking to grow
their commercial (vs. consumer) lending business by expanding beyond real estate into
commercial and industrial (C&I) loans. To do so, they're increasingly making investments in
commercial LOS to improve their speed to market. They'll need to--according to Cornerstone's
research, nearly seven in 10 financial institution executives think their commercial lending
capabilities aren't "future ready."
The Assimilation of AI and Blockchain
So when will technologies like AI and blockchain crack the top 5 hottest technologies? Never.
Not because those technologies won't be big, but because they're not standalone technologies
that most banks will invest in.
We're in a phase of technology development where AI is being assimilated into the
systems and apps that banks already deploy.
AI will become indistinguishable components of systems and tools like:
Commercial loan origination systems. Machine learning and RPA will be used to
identify potential commercial credit request needs, spread borrower financial
statements, and validate credit due diligence items and perform vendor order execution.
Account opening systems. Chatbots will become components of digital account
opening systems--not just standalone, general customer support tools (like BofA's Erica
which has failed me the four or five times I've used it).
CRM. Machine learning is already incorporated in a number of CRM systems to
do things like transcribe and analyze sales calls, predict caller intent and reduce
escalations with speech analytics, and analyze patterns in CRM and public data for
predictive lead scoring.
This isn't good news for the advocates of more regulatory control over AI, by the way.
The assimilation of blockchain phase isn't quite upon us yet, but that will be the next
wave.
opening systems--not just standalone, general customer support tools (like BofA's Erica
which has failed me the four or five times I've used it).
CRM. Machine learning is already incorporated in a number of CRM systems to
do things like transcribe and analyze sales calls, predict caller intent and reduce
escalations with speech analytics, and analyze patterns in CRM and public data for
predictive lead scoring.
This isn't good news for the advocates of more regulatory control over AI, by the way.
The assimilation of blockchain phase isn't quite upon us yet, but that will be the next
wave.
Impact of Technology on banking sector
The biggest revolution came in banks is Digitization.
Banking process is faster than before and more reliable. Maintenance and retrieval of
documents and records have become much faster and easier.
Computerized banking also improves the core banking system. With CBS (core banking
system) all branches have access to common centralized data and are interconnected.
With the innovation of MICR cheque processing system, the processing of cheques becomes
more faster and efficient h than before.
USSD (Unstructured supplementary service data) was launched by Government, so people
with no internet-connectivity too can access their bank accounts without visiting the branch.
With increasing internet reach, Internet Banking was developed and now offered by almost
every bank. Through this, every transaction details and inquiries can be performed online
without visiting the bank.
It offered more transparency in transactions.
The scope of frauds in banks is being minimized through the use of passwords, double
authentication in online banking.
Technology also leads to competition among the banks which eventually provides better
services to people.
With introduction of mobile banking, one can access their bank from anywhere-anytime.
Everything is one quick tap away.
To facilitate better services, Banks have introduced Automated Banking Services Solution like
Cash Deposit Machine, Cheque Deposit Machine, Passbook Printing Machine through these
service have become easier.
The Impact of Technology on the Customer
At the start of any business, the creator must think of how they will become profitable, survive
amidst competition and come up with a plan for growth and expansion. However, many
business owners often overlook technology, and how it will affect how they run their businesses
in the long run. As a smart business owner, you need to find out how technological advances
are changing your customers and find ways to adapt your business to suit the changing needs
of your customers. Here are 6 ways technology is influencing customer behaviour, thinking,
and experiences and what you can do to remain profitable and grow regardless of changing
customer thinking patterns.
The biggest revolution came in banks is Digitization.
Banking process is faster than before and more reliable. Maintenance and retrieval of
documents and records have become much faster and easier.
Computerized banking also improves the core banking system. With CBS (core banking
system) all branches have access to common centralized data and are interconnected.
With the innovation of MICR cheque processing system, the processing of cheques becomes
more faster and efficient h than before.
USSD (Unstructured supplementary service data) was launched by Government, so people
with no internet-connectivity too can access their bank accounts without visiting the branch.
With increasing internet reach, Internet Banking was developed and now offered by almost
every bank. Through this, every transaction details and inquiries can be performed online
without visiting the bank.
It offered more transparency in transactions.
The scope of frauds in banks is being minimized through the use of passwords, double
authentication in online banking.
Technology also leads to competition among the banks which eventually provides better
services to people.
With introduction of mobile banking, one can access their bank from anywhere-anytime.
Everything is one quick tap away.
To facilitate better services, Banks have introduced Automated Banking Services Solution like
Cash Deposit Machine, Cheque Deposit Machine, Passbook Printing Machine through these
service have become easier.
The Impact of Technology on the Customer
At the start of any business, the creator must think of how they will become profitable, survive
amidst competition and come up with a plan for growth and expansion. However, many
business owners often overlook technology, and how it will affect how they run their businesses
in the long run. As a smart business owner, you need to find out how technological advances
are changing your customers and find ways to adapt your business to suit the changing needs
of your customers. Here are 6 ways technology is influencing customer behaviour, thinking,
and experiences and what you can do to remain profitable and grow regardless of changing
customer thinking patterns.
1. Decreased customer attention
With millions of blog posts and videos posted online every day, there is way too much content
for people to consume. Put simply; all these content is causing content overload in the lives of
billions of people around the world. There is too much content to consume, too many emails
to reply to and too much to do by the end of the day. As a result, the attention of your visitors
and customers is decreasing. This means that you have to find a way to grab the attention of
your readers quickly, sell them on your offer and then make it easy for them to buy from you.
According to Entrepreneur, grabbing the attention of your website visitors is the key to
increasing online sales. How do you do this? It’s easy, start by creating helpful content that
stands out amidst the noise in your niche, write clear copy that sells your offer and then
simplifies the sales or sign-up process to increase your conversion rates. It’s that simple.
2. The need for personalization
According to HubSpot, people crave interaction with a person, pieces of content or software
that leave them with the feeling that their preferences and interests were being taken into
account. It used to take lots of resources to create and sell a course, but that has now changed.
Technology has made it so easy to create digital courses, such that anyone with a computer and
access to the internet can set up a website, create a course and then start selling it. With these
many products being produced, personalization has become a huge determinant of the nature
of a customer’s experience. According to a study done by Janrain, around 74% of online
consumers feel frustrated with websites when content (e.g. ads, promotions, offers) appears
that has nothing to do with their interests. To prevent frustration and increase sales, smart
marketers and business owners are creating personalized experiences for their customers. First,
you need to identify your target market, and then personalize all your content, products, and
resources towards the needs and wants of your customers.
This makes it easier for customers to make a purchase, and also increases the likelihood that if
you met their particular needs before, they will come to you again for a purchase or refer you
to other people with similar interests and needs.
3. The ease of access to info
A few years ago, customers made buying decisions based on news, advertisements, past
experience or referrals from other people. However, technology has changed this. A report by
With millions of blog posts and videos posted online every day, there is way too much content
for people to consume. Put simply; all these content is causing content overload in the lives of
billions of people around the world. There is too much content to consume, too many emails
to reply to and too much to do by the end of the day. As a result, the attention of your visitors
and customers is decreasing. This means that you have to find a way to grab the attention of
your readers quickly, sell them on your offer and then make it easy for them to buy from you.
According to Entrepreneur, grabbing the attention of your website visitors is the key to
increasing online sales. How do you do this? It’s easy, start by creating helpful content that
stands out amidst the noise in your niche, write clear copy that sells your offer and then
simplifies the sales or sign-up process to increase your conversion rates. It’s that simple.
2. The need for personalization
According to HubSpot, people crave interaction with a person, pieces of content or software
that leave them with the feeling that their preferences and interests were being taken into
account. It used to take lots of resources to create and sell a course, but that has now changed.
Technology has made it so easy to create digital courses, such that anyone with a computer and
access to the internet can set up a website, create a course and then start selling it. With these
many products being produced, personalization has become a huge determinant of the nature
of a customer’s experience. According to a study done by Janrain, around 74% of online
consumers feel frustrated with websites when content (e.g. ads, promotions, offers) appears
that has nothing to do with their interests. To prevent frustration and increase sales, smart
marketers and business owners are creating personalized experiences for their customers. First,
you need to identify your target market, and then personalize all your content, products, and
resources towards the needs and wants of your customers.
This makes it easier for customers to make a purchase, and also increases the likelihood that if
you met their particular needs before, they will come to you again for a purchase or refer you
to other people with similar interests and needs.
3. The ease of access to info
A few years ago, customers made buying decisions based on news, advertisements, past
experience or referrals from other people. However, technology has changed this. A report by
Consultancy found out that 61 % of customers use search engines to aid them in product
research before they can make a buying decision. Simply put, the higher the amount of relevant
info about your products a visitor can find online, the higher their likelihood of purchasing
from you. To excel, marketers and business owners are now focusing on increasing their online
presence through content marketing while improving their reputation by asking for reviews
and ratings from past customers. They understand that this information will be key in putting
them at the frontline when new customers are researching what to buy and where to buy it.
4. Brand trust and likability
Gone are the days when customers bought from a business just because there were no
alternatives. Technological advances have made it easier for more people to launch online
businesses for just a few dollars. As a result, when making a buying decision, many customers
will rely on their level of trust of a brand and how much they like it to decide whether or not
they will buy. According to Rare, 86% of consumers say loyalty is primarily driven by likability
and 83 % of consumers say trust. They have to trust you before they can buy from you. To
influence customer behavior and make more sales, start by finding ways to become more
trustworthy. This can be done by using content marketing to improve your online presence and
reputation, then improve your trustworthiness by using social proof. In a research done by
Dimensional Research, it was found out that of the participants who had seen online
reviews, 90% said that positive reviews had impacted their buying decisions while an
astounding 86% said that the same was true for negative reviews. As such, you can improve
your trustworthiness and likability by getting your past customers to post reviews, ratings, and
testimonials of your products. Add this to your website, and more visitors will deem you
trustworthy enough to buy from because you’ve proved that other people had trusted you before
and were not disappointed.
5. Customer expectations have gone up
Technology has made it very easy and cheap to create businesses. This has resulted in very
many businesses offering related products; products that fill similar needs in the lives of their
customers. As a result of having too many choices, customer expectations have gone
up. According to Barry Schwartz, a professor of psychology, too many choices can prevent
customers from making a purchase, and when they do, they will feel less satisfied with their
selection. The decrease in satisfaction can be attributed to increased expectations which are
research before they can make a buying decision. Simply put, the higher the amount of relevant
info about your products a visitor can find online, the higher their likelihood of purchasing
from you. To excel, marketers and business owners are now focusing on increasing their online
presence through content marketing while improving their reputation by asking for reviews
and ratings from past customers. They understand that this information will be key in putting
them at the frontline when new customers are researching what to buy and where to buy it.
4. Brand trust and likability
Gone are the days when customers bought from a business just because there were no
alternatives. Technological advances have made it easier for more people to launch online
businesses for just a few dollars. As a result, when making a buying decision, many customers
will rely on their level of trust of a brand and how much they like it to decide whether or not
they will buy. According to Rare, 86% of consumers say loyalty is primarily driven by likability
and 83 % of consumers say trust. They have to trust you before they can buy from you. To
influence customer behavior and make more sales, start by finding ways to become more
trustworthy. This can be done by using content marketing to improve your online presence and
reputation, then improve your trustworthiness by using social proof. In a research done by
Dimensional Research, it was found out that of the participants who had seen online
reviews, 90% said that positive reviews had impacted their buying decisions while an
astounding 86% said that the same was true for negative reviews. As such, you can improve
your trustworthiness and likability by getting your past customers to post reviews, ratings, and
testimonials of your products. Add this to your website, and more visitors will deem you
trustworthy enough to buy from because you’ve proved that other people had trusted you before
and were not disappointed.
5. Customer expectations have gone up
Technology has made it very easy and cheap to create businesses. This has resulted in very
many businesses offering related products; products that fill similar needs in the lives of their
customers. As a result of having too many choices, customer expectations have gone
up. According to Barry Schwartz, a professor of psychology, too many choices can prevent
customers from making a purchase, and when they do, they will feel less satisfied with their
selection. The decrease in satisfaction can be attributed to increased expectations which are
rarely met. Customers now want a single product that fulfills all their needs. This means that
one of the biggest determinants of whether they’ll buy from you is the number of needs that
you help your customers meet, and how well you do it. For example, people used to rely on the
news for weather updates; then they moved online where they could get weather forecasts for
the major cities in the world. But nowadays, customers are looking for a product that will give
the real-time weather updates of any place around the world. This has pressured businesses in
the niche to try and come up with the useful weather forecast app for people that does more
than just tell the weather; they need a platform that moves with the customer, giving them real-
time data from any location as they need it. And this is happening across the board in all niches.
If you want to survive, you have to find ways to adapt your products to meet increasing
customer expectations.
6. The increasing need for ’good’ customer experience
A few years ago, customers could make a purchase regardless of how the experience made
them feel. Most buying decisions were made out of a product fulfilling their needs and not the
customer’s experiences with the business. That has changed. According to a RightNow
report on customer experience, 89% of consumers have stopped doing business with a company
after experiencing poor customer service. Customers have started placing their experience
above other factors, such as brand reputation, and the price of products. If you want to remain
profitable and grow, you need to invest more resources into improving your business’s
customer experience. The company culture can make it possible and the feedback from
employees is cruel to get optimum B2C relations. Each business needs to implement the best
practices for employee questionnaires to identify issues and fix hidden problems, build on
business strengths, and implement B2C improvements. Before allowing minor instances of bad
customer experience to ruin your reputation, keep in mind that consumers are 2-times more
likely to share their bad customer service experiences than they are to talk about positive
experiences.
The Impact of Technology on Economy
At a time of slowed growth and continued volatility, many countries are looking for policies
that will stimulate growth and create new jobs. Information communications technology (ICT)
is not only one of the fastest growing industries – directly creating millions of jobs – but it is
also an important enabler of innovation and development.
one of the biggest determinants of whether they’ll buy from you is the number of needs that
you help your customers meet, and how well you do it. For example, people used to rely on the
news for weather updates; then they moved online where they could get weather forecasts for
the major cities in the world. But nowadays, customers are looking for a product that will give
the real-time weather updates of any place around the world. This has pressured businesses in
the niche to try and come up with the useful weather forecast app for people that does more
than just tell the weather; they need a platform that moves with the customer, giving them real-
time data from any location as they need it. And this is happening across the board in all niches.
If you want to survive, you have to find ways to adapt your products to meet increasing
customer expectations.
6. The increasing need for ’good’ customer experience
A few years ago, customers could make a purchase regardless of how the experience made
them feel. Most buying decisions were made out of a product fulfilling their needs and not the
customer’s experiences with the business. That has changed. According to a RightNow
report on customer experience, 89% of consumers have stopped doing business with a company
after experiencing poor customer service. Customers have started placing their experience
above other factors, such as brand reputation, and the price of products. If you want to remain
profitable and grow, you need to invest more resources into improving your business’s
customer experience. The company culture can make it possible and the feedback from
employees is cruel to get optimum B2C relations. Each business needs to implement the best
practices for employee questionnaires to identify issues and fix hidden problems, build on
business strengths, and implement B2C improvements. Before allowing minor instances of bad
customer experience to ruin your reputation, keep in mind that consumers are 2-times more
likely to share their bad customer service experiences than they are to talk about positive
experiences.
The Impact of Technology on Economy
At a time of slowed growth and continued volatility, many countries are looking for policies
that will stimulate growth and create new jobs. Information communications technology (ICT)
is not only one of the fastest growing industries – directly creating millions of jobs – but it is
also an important enabler of innovation and development.
The number of mobile subscriptions (6.8 billion) is approaching global population figures, with
40% of people in the world already online. In this new environment, the competitiveness of
economies depends on their ability to leverage new technologies. Here are the five common
economic effects of ICT.
1. Direct job creation
The ICT sector is, and is expected to remain, one of the largest employers. In the US alone,
computer and information technology jobs are expected to grow by 22% up to 2020, creating
758,800 new jobs. In Australia, building and running the new super-fast National Broadband
Network will support 25,000 jobs annually. Naturally, the growth in different segments is
uneven. In the US, for each job in the high-tech industry, five additional jobs, on average, are
created in other sectors. In 2013, the global tech market will grow by 8%, creating jobs, salaries
and a widening range of services and products.
2. Contribution to GDP growth
Findings from various countries confirm the positive effect of ICT on growth. For example, a
10% increase in broadband penetration is associated with a 1.4% increase in GDP growth in
emerging markets. In China, this number can reach 2.5%. The doubling of mobile data use
caused by the increase in 3G connections boosts GDP per capita growth rate by 0.5% globally.
The Internet accounts for 3.4% of overall GDP in some economies. Most of this effect is driven
by e-commerce – people advertising and selling goods online.
3. Emergence of new services and industries
Numerous public services have become available online and through mobile phones. The
transition to cloud computing is one of the key trends for modernization. The government
of Moldova is one of the first countries in Eastern Europe and Central Asia to shift its
government IT infrastructure into the cloud and launch mobile and e-services for citizens and
businesses. ICT has enabled the emergence of a completely new sector: the app
industry. Research shows that Facebook apps alone created over 182,000 jobs in 2011, and that
the aggregate value of the Facebook app economy exceeds $$12 billion.
40% of people in the world already online. In this new environment, the competitiveness of
economies depends on their ability to leverage new technologies. Here are the five common
economic effects of ICT.
1. Direct job creation
The ICT sector is, and is expected to remain, one of the largest employers. In the US alone,
computer and information technology jobs are expected to grow by 22% up to 2020, creating
758,800 new jobs. In Australia, building and running the new super-fast National Broadband
Network will support 25,000 jobs annually. Naturally, the growth in different segments is
uneven. In the US, for each job in the high-tech industry, five additional jobs, on average, are
created in other sectors. In 2013, the global tech market will grow by 8%, creating jobs, salaries
and a widening range of services and products.
2. Contribution to GDP growth
Findings from various countries confirm the positive effect of ICT on growth. For example, a
10% increase in broadband penetration is associated with a 1.4% increase in GDP growth in
emerging markets. In China, this number can reach 2.5%. The doubling of mobile data use
caused by the increase in 3G connections boosts GDP per capita growth rate by 0.5% globally.
The Internet accounts for 3.4% of overall GDP in some economies. Most of this effect is driven
by e-commerce – people advertising and selling goods online.
3. Emergence of new services and industries
Numerous public services have become available online and through mobile phones. The
transition to cloud computing is one of the key trends for modernization. The government
of Moldova is one of the first countries in Eastern Europe and Central Asia to shift its
government IT infrastructure into the cloud and launch mobile and e-services for citizens and
businesses. ICT has enabled the emergence of a completely new sector: the app
industry. Research shows that Facebook apps alone created over 182,000 jobs in 2011, and that
the aggregate value of the Facebook app economy exceeds $$12 billion.
4. Workforce transformation
New “microwork” platforms, developed by companies like oDesk, Amazon and Sam source,
help to divide tasks into small components that can then be outsourced to contract workers.
The contractors are often based in emerging economies. Microwork platforms allow
entrepreneurs to significantly cut costs and get access to qualified workers. In
2012, oDesk alone had over 3 million registered contractors who performed 1.5 million tasks.
This trend had spillover effects on other industries, such as online payment systems. ICT has
also contributed to the rise of entrepreneurship, making it much easier for self-starters to access
best practices, legal and regulatory information, and marketing and investment resources.
5. Business innovation
In OECD countries, more than 95% of businesses have an online presence. The Internet
provides them with new ways of reaching out to customers and competing for market share.
Over the past few years, social media has established itself as a powerful marketing tool. ICT
tools employed within companies help to streamline business processes and improve
efficiency. The unprecedented explosion of connected devices throughout the world has
created new ways for businesses to serve their customers.
New “microwork” platforms, developed by companies like oDesk, Amazon and Sam source,
help to divide tasks into small components that can then be outsourced to contract workers.
The contractors are often based in emerging economies. Microwork platforms allow
entrepreneurs to significantly cut costs and get access to qualified workers. In
2012, oDesk alone had over 3 million registered contractors who performed 1.5 million tasks.
This trend had spillover effects on other industries, such as online payment systems. ICT has
also contributed to the rise of entrepreneurship, making it much easier for self-starters to access
best practices, legal and regulatory information, and marketing and investment resources.
5. Business innovation
In OECD countries, more than 95% of businesses have an online presence. The Internet
provides them with new ways of reaching out to customers and competing for market share.
Over the past few years, social media has established itself as a powerful marketing tool. ICT
tools employed within companies help to streamline business processes and improve
efficiency. The unprecedented explosion of connected devices throughout the world has
created new ways for businesses to serve their customers.
Conclusion
The banking sector in India has become tougher in term of development and economic growth
the number of customers in the financial sector. In the next generation will play a vital role in
further strengthening the banking sector Nowadays, the new technology is sure that the future
of banking will introduce more offers and services to the customers with the bust banking
product and innovations. Banking sector also increased the accessibility of a common person
to bank for his productivity and requirements.
The Indian banking sector has improved the terms and new Technology. The innovative
banking technology changing reforms have changed the face of Indian banking and financial
sector. The banking system has improve the manifolds in terms of product and services,
technology, banking system, trading facility etc. it is the evident that the banking system has
grown in India to compare with other country. Future, the banks comprehends their customer
and bank will be meeting their requirements. Indian Banking Sector provide better services
with other developed banks.
The banking sector in India has become tougher in term of development and economic growth
the number of customers in the financial sector. In the next generation will play a vital role in
further strengthening the banking sector Nowadays, the new technology is sure that the future
of banking will introduce more offers and services to the customers with the bust banking
product and innovations. Banking sector also increased the accessibility of a common person
to bank for his productivity and requirements.
The Indian banking sector has improved the terms and new Technology. The innovative
banking technology changing reforms have changed the face of Indian banking and financial
sector. The banking system has improve the manifolds in terms of product and services,
technology, banking system, trading facility etc. it is the evident that the banking system has
grown in India to compare with other country. Future, the banks comprehends their customer
and bank will be meeting their requirements. Indian Banking Sector provide better services
with other developed banks.
Bibliography
T.Sreelatha , CH.ChandraShekar (2012) “ Role of Technology in Indian Banking Sector”
IJMBS –vol 2, Issue 4, ISSN No: 2231- 2463 PP 36-40.
https://www.essaysauce.com/information-technology-essays/literature-review-banking-
systems-and-technology/
Websites
https://www.ijtsrd.com/papers/ijtsrd18357.pdf
https://uniprojects.net/project-materials/significance-of-information-technology-on-the-
banking-industry/
https://www.businessinsider.com/future-of-banking-technology?IR=T
https://www.forbes.com/sites/civicnation/2020/02/27/we-should-make-college-accessible-
for-all-students/#5f5e6e37743f
T.Sreelatha , CH.ChandraShekar (2012) “ Role of Technology in Indian Banking Sector”
IJMBS –vol 2, Issue 4, ISSN No: 2231- 2463 PP 36-40.
https://www.essaysauce.com/information-technology-essays/literature-review-banking-
systems-and-technology/
Websites
https://www.ijtsrd.com/papers/ijtsrd18357.pdf
https://uniprojects.net/project-materials/significance-of-information-technology-on-the-
banking-industry/
https://www.businessinsider.com/future-of-banking-technology?IR=T
https://www.forbes.com/sites/civicnation/2020/02/27/we-should-make-college-accessible-
for-all-students/#5f5e6e37743f
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