UNIT – V E-BANKING.pptx FOR U G STUDENTS

UNIT –V E-BANKING.pptx FOR UG STUDENTS

1. UNIT –V E- BANKING

2. E-banking, short for electronic banking, is like having your bank right at your fingertips, but on your computer or phone! Instead of going to a bank branch, you can do all your banking stuff online or on your mobile device. That means checking your account balance, paying bills, transferring money between accounts, and even depositing checks, all without leaving your home. It's super convenient because you can do it anytime, anywhere, as long as you have internet access. Plus, it's usually pretty safe and secure, with special measures to protect your money and personal information. 

3. Advantages and Disadvantages of E-Banking E-banking offers numerous advantages in terms of convenience, accessibility, and efficiency, it also poses challenges related to security, technology, inclusivity, customer support, and privacy that must be addressed to ensure a safe, reliable, and inclusive banking experience for all customers.

4. Advantages of E-Banking E-banking offers several significant advantages for both customers and financial institutions. Firstly, it provides unparalleled convenience by allowing customers to access banking services and conduct transactions from the comfort of their homes or while on the go.  Convenience E-banking offers customers the convenience of accessing banking services and conducting transactions anytime, anywhere, without the constraints of traditional banking hours or the need to visit a physical bank branch.

5. Accessibility E-banking allows customers to access their bank accounts and perform transactions remotely through electronic channels such as the Internet, mobile devices, and ATMs, providing greater accessibility to banking services for individuals in remote areas or with mobility limitations. Cost Savings E-banking can lead to cost savings for both banks and customers by reducing overhead costs associated with maintaining physical bank branches, such as rent, utilities, and staffing. This can result in lower fees, higher interest rates on savings accounts, and better value-added services for customers.

6. Efficiency E-banking enables faster and more efficient processing of banking transactions compared to traditional paper-based methods. Transactions such as fund transfers, bill payments, and account inquiries can be completed in real time or with minimal processing time, enhancing customer satisfaction and reducing administrative delays. 24/7 Access E-banking provides customers with 24/7 access to their bank accounts and banking services, allowing them to manage their finances, monitor account activity, and perform transactions outside regular banking hours, including weekends and holidays.

7. Disadvantages of E-Banking E-banking also presents several challenges and disadvantages that must be addressed to ensure a safe and secure banking experience. One of the primary concerns is security risks, including phishing attacks, malware, identity theft, and fraudulent transactions, which can compromise customer data and financial assets.  Security Risks E-banking exposes customers to security risks such as phishing attacks, malware, identity theft, and fraudulent transactions. Cybercriminals may exploit vulnerabilities in online banking systems or trick users into disclosing sensitive information, leading to financial losses and privacy breaches.

8. Technological Dependencies E-banking relies on digital technologies and internet connectivity, making customers vulnerable to service disruptions, system failures, or cyberattacks that can disrupt access to banking services or compromise the integrity of financial transactions. Digital Divide Not all individuals have equal access to e-banking services due to disparities in internet access, digital literacy, and technological infrastructure. The digital divide may exclude marginalized populations, including the elderly, low-income individuals, and those in rural or underserved areas, from accessing essential banking services online.

9. Customer Support Challenges E-banking may present challenges in providing personalized customer support and assistance compared to face-to-face interactions at physical bank branches. Resolving technical issues, addressing customer inquiries, and assisting with complex transactions may be more challenging in an online or automated environment. Privacy Concerns E-banking requires customers to share personal and financial information online, raising concerns about privacy, data security, and confidentiality. Customers may be apprehensive about collecting, storing, and using their sensitive data by banks, third-party service providers, or malicious actors, leading to trust and confidence issues in e-banking platforms.

10. Features of E-Banking E-banking, or electronic banking, offers a wide range of features and functionalities designed to provide customers with convenient, secure, and efficient banking services through digital channels. These features of e-banking empower customers to manage their finances efficiently, securely, and conveniently through digital channels, enhancing the overall banking experience and driving greater customer satisfaction and loyalty. Here are some key features of e-banking: Account Management E-banking allows customers to view account balances, transaction history, and account statements in real time. Customers can monitor their finances, track expenditures, and manage multiple accounts, including checking, savings, and credit card accounts, from a single online banking platform or mobile app.

11. Fund Transfers Customers can transfer funds between their own accounts or to other accounts within the same bank or to accounts at different financial institutions using e-banking channels. Fund transfer options include one-time transfers, recurring transfers, scheduled transfers, and wire transfers, offering flexibility and convenience in managing financial transactions. Bill Payments E-banking platforms enable customers to pay bills electronically, including utility bills, credit card bills, loan payments, and other recurring expenses. Customers can set up one-time or recurring bill payments, schedule payments in advance, and receive electronic confirmation of payment transactions.

12. Mobile Banking Mobile banking apps provide customers with on-the-go access to banking services through smartphones and tablets. Mobile banking features typically include account management, fund transfers, bill payments, mobile check deposits, account alerts and notifications, and ATM locator services, allowing customers to manage their finances anytime, anywhere. Remote Deposits Some e-banking platforms offer remote deposit capture (RDC) functionality, allowing customers to deposit checks electronically using their smartphones or scanners. Customers can capture images of checks, submit them for processing through the bank's mobile app or online banking platform, and receive confirmation of deposit without visiting a physical bank branch.

13. Online Statements and Documents E-banking platforms provide customers with electronic statements and documents, including account statements, transaction confirmations, and tax documents. Customers can access, view, download, and print electronic documents securely through online banking portals, reducing paper waste and administrative hassles associated with paper-based statements. Security Features E-banking platforms implement robust security measures to protect customer data and financial transactions from unauthorized access, fraud, and cyber threats. Security features may include encryption, multi-factor authentication, biometric authentication, transaction monitoring, and fraud detection systems, ensuring the integrity and confidentiality of customer information.

14. Customer Support E-banking platforms offer customer support services to assist customers with account inquiries, technical issues, and transaction disputes. Customer support options may include online chat support, email support, phone support, and self-service help resources such as FAQs, tutorials, and troubleshooting guides.

15. Types of E-Banking These types of e-banking offer customers a variety of options to access banking services and conduct transactions conveniently, securely, and efficiently through digital channels, catering to diverse preferences and needs in the modern banking landscape. Electronic banking (e-banking) encompasses various types of banking services and transactions conducted through electronic channels such as the Internet, mobile devices, and ATMs. Here are some common types of e-banking:

16. Internet Banking Internet banking, also known as online banking or web banking, allows customers to access banking services and perform transactions through secure websites or online banking portals provided by their banks. Customers can log in to their accounts using a username and password to check balances, transfer funds, pay bills, view transaction history, and perform other banking activities online.

17. Mobile Banking Mobile banking enables customers to access banking services and conduct transactions using smartphones or tablets through dedicated mobile banking apps provided by their banks. Mobile banking apps offer similar functionalities to Internet banking, including account management, fund transfers, bill payments, mobile check deposits, account alerts, and ATM locator services, providing customers with on-the-go access to their finances.

18. ATM Banking Automated teller machines (ATMs) allow customers to perform basic banking transactions such as cash withdrawals, deposits, balance inquiries, and fund transfers using ATM cards or debit cards . ATMs provide convenient access to banking services outside bank branch hours and locations, offering self-service options for customers to conduct transactions independently.

19. Telephone Banking Telephone banking, also known as phone banking or telebanking, enables customers to access banking services and conduct transactions over the phone through automated voice response systems or interactive voice response (IVR) systems. Customers can check account balances, transfer funds, and pay bills by following voice prompts or speaking with customer service representatives.

20. SMS Banking SMS banking allows customers to access banking services and receive account-related notifications and alerts through text messages sent to their mobile phones. Customers can request account balances, view transaction alerts, receive payment reminders, and perform other banking activities via SMS commands, providing a convenient and efficient communication channel for banking transactions.

21. Cardless Banking Cardless banking enables customers to perform banking transactions at ATMs or retail locations without using physical cards. Customers can initiate transactions using mobile banking apps or SMS commands to generate one-time PINs (OTPs) or QR codes , which are used to authenticate transactions and access banking services securely without the need for physical cards.

22. Digital Banking Digital Banking is the evolution of banking with the help of digital resources. It means that any user with a personal computer and a browser, a smartphone, or a tablet, can get access to their bank’s website to perform any kind of virtual functions. Digital banking is an important concept not only for practical purposes but also for  banking awareness  preparation. Digital banking can also be cited as the delivery of banking products and/ or services to customers through electronic channels. In digital banking, there is no need for any physical exchange of money as all the transactions are done through electronic mode from one account to another through the Internet. Digital Banking  is also known as cyberbanking, internet banking, virtual banking, home banking, and electronic banking as it includes various banking activities that can be conducted online and not offline. The concept involves new-age online banking instruments such as RTGS, NEFT, ECS, credit cards, debit cards, cheque truncation, telebanking, mobile/ internet banking, and ATM .

23. History of Digital Banking In India, the traditional method of banking had been taking place through branch banking only. In the late 1980s, the need for digitization was felt in the Indian banking sector in order to improve customer service, MIS reporting, and accounts maintenance. Hence, banks began using Information Technology initially with the introduction of standalone PCs and migrated to Local Area Network (LAN) connectivity. With further developments, banks began adapting to the core banking platform. Thus, branch banking changed to online banking.

24. In 1988, the  Reserve Bank of India (RBI)  set up a committee on computerization across all banks of India. The committee was headed by Dr. C. Rangarajan . The important technological developments witnessed in the new age payment systems including: Arrival of card-based payments with debit card and credit card (1980s) Introduction of Electronic Clearing Service (ECS) (1990s) Introduction of Electronic Funds Transfer / Special EFT (2000s) Real Time Gross Settlement (RTGS) (2004) Introduction of NEFT (National Electronic Funds Transfer) (2005-06) Introduction of CTS (Cheque Truncation System) (2008)

25. Features of Digital Banking 24×7 banking services No geographical limitations Easy online fund transfer facility Enhanced efficiency in customer relationship management Online bill payment for electricity, telephone, mobile recharge, etc. View the balance of accounts and statements online Mini statement orders Mobile banking anywhere, anytime SMS banking services

26. Digital Banking Vs Traditional Banking Digital Banking Basis of Difference Traditional Banking No physical presence as services are provided online Physical Presence They exist physically for offering services to the customers Customers need not have to visit the branch of the bank personally, thus saving them time. Time It consumes a lot of time as customers not only need to visit the branch but also wait in queues. It is accessible round the clock. 24*7 Access Customers have to visit the branch during the working hours only Greater chances of security threats as data is accessible online Security Threat Limited or no security threats It is relatively cost effective as customers need not spend money for bank visits Expensive Customers need to shell out money to make bank visits whenever required No costs involved as the banks do not have physical presence Cost Physical presence implies operating and fixed costs

27. National Payments Corporation of India The National Payments Corporation of India (NPCI) is an umbrella organization for all kinds of retail payment systems in India . It aims to enable the citizens of the country to have direct access to e-payment services at any place and at any time. The NPCI was incorporated in December 2008 and its Certificate of Commencement of Business was issued in April 2009. The NPCI includes the following: National Automated Clearing House (NACH) Aadhaar Enabled Payment System ( AePS ) RuPay Card Bharat Interface for Money (BHIM) BHIM Aadhaar National Electronic Toll Collection (NETC) Bharat Bill Pay

28. Payment Systems in India Due to the advent of technology in the banking sector, there has been an evolution in the way businesses and individuals bank. Accordingly, the payment systems in India have been transformed from exchanging money in currency notes and coins forms to making online transactions. The payment systems in India are categorized into: NEFT (National Electronic Funds Transfer) BHIM (Bharat Interface for Money) App ECS (Electronic Clearing Services) NFS (National Financial Switch) RTGS (Real Time Gross Settlement) AePS (Aadhaar Enabled Payment Systems) IMPS (Immediate Payment Service) Bharat Bill Pay System UPI (Unified Payments Service) RuPay Card SWIFT (Society for Worldwide Interbank Financial Transactions)

29. Inter Bank Transfer Inter Bank Transfer enables electronic transfer of funds from the account of the remitter in one Bank to the account of the beneficiary maintained with any other Bank branch. There are two systems of Interbank Transfer – RTGS and NEFT. Both these systems are maintained by the Reserve Bank of India. RTGS- Real Time Gross Settlement  - This is a system where the processing of funds transfer instructions takes place at the time they are received (real-time). Also, the settlement of funds transfer instructions occurs individually on an instruction by instruction basis (gross settlement). RTGS is the fastest possible interbank money transfer facility available through secure banking channels in India. NEFT- National Electronic Fund Transfer  - This system of fund transfer operates on a Deferred Net Settlement basis. Fund transfer transactions are settled in batches as opposed to the continuous, individual settlement in RTGS. Presently, NEFT operates in half-hourly batches. There will be 48 half-hourly batches every day. The settlement of first batch will commence after 00:30 hours and the last batch will end at 00:00 hours. The system will be available on all days of the year, on a  24 x 7  basis, including holidays.

30. Minimum / Maximum amount for RTGS / NEFT transactions under Retail Internet Banking Type Minimum Maximum RTGS Rs. 2 Lakhs Rs. 10 Lakhs NEFT No Minimum Rs. 10 Lakhs What is the minimum/maximum amount for RTGS/NEFT transactions under Retail Internet Banking?

31. ECS The ECS is an electronic mode of payment and receipts for transactions that are repetitive and periodic in nature. It is an electronic mode of funds transfer from one bank to another. ECS can be used by the institutions for making payments such as distribution of dividend, salary, pensions , etc. It can also be used to pay bills and other charges such as electricity, water, telephone, etc. The facility can be used for both credit and debit purposes. The ECS includes transactions processed under the National Automated Clearing House (NACH) operated by the NPCI.

32. IMPS The facility was initiated by Smt. Shyamala Gopalan (former deputy governor of RBI) in addition to NEFT and RTGS. Immediate Payment Service is a new facility added to the Mobile Banking Service. It facilitates funds transfer to an account of the beneficiary with a participating bank, based on the beneficiary's Mobile Number & MMID or Account No & IFSC. IMPS provides real-time and robust fund transfer throughout 24x7x365 as an interbank electronic service. IMPS is an emphatic service which allows transferring of funds within the banks across India, making it not only safe but also economical for the customers. For carrying out IMPS, banks are required to fulfill the eligibility criteria of having a valid banking or prepaid payment instrument license from the RBI. IMPS can be done 24x7x365 – even on bank holidays, RBI holidays, and Sundays.

33. UPI Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. With the above context in mind, NPCI conducted a pilot launch with 21 member banks. The pilot launch was on 11th April 2016 by Dr. Raghuram G Rajan, Governor, RBI at Mumbai . Banks have started to upload their UPI-enabled Apps on Google Play store from 25th August 2016 onwards.

34. How is it unique? Immediate money transfer through mobile device round the clock 24*7 and 365 days. Single mobile application for accessing different bank accounts. Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment. Virtual address of the customer for Pull & Push provides incremental security with the customer not required to enter the details such as Card no, Account number; IFSC etc. QR Code Best answer to Cash on Delivery hassle, running to an ATM or rendering exact amount. Merchant Payment with Single Application or In-App Payments. Utility Bill Payments, over-the-counter payments, QR Code (Scan and Pay) based payments. Raising Complaints from the Mobile App directly.

35. AePS Payments that can be done with the help of identification and authentication through the Aadhaar database is known as Aadhaar Enabled Payment Systems ( AePS ) It is the new form of payment promoted by the government to motivate digital payments instead of cash transactions The first type of payment is Aadhaar Bridge Payment System which is meant for direct benefit transfer and subsidy payments to the beneficiaries from the government The second AePS is used at the business level where bank customers can use the Aadhaar to access various services like for withdrawing cash, account opening, and fund transfer without visiting the branch. The third is Aadhaar Pay in which the merchants can accept payments through Aadhaar identification of their customers.

36. RuPay Card It is a new card payment scheme launched by the NPCI offering a dometic open-loop, multilateral system to allow all the Indian banks and financial institutions to participate in the electronic payments. RuPay Cards address the needs of Indian consumers, merchants, and banks providing the flexibility of the product platform. Its features include: Complimentary lounge access program – domestic & international 24×7 concierge services Earn cashback time after time Comprehensive insurance cover Exclusive merchant offers

37. SWIFT ( Society for Worldwide Interbank Financial Telecommunications ) It is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes. With SWIFT, each financial organization has a unique code which is used to send and receive payments. It does not facilitate funds transfer, instead, SWIFT sends payment orders, which must be settled in correspondent accounts that the institutions have with each other. The SWIFT India messaging platform is the foundation on which the Indian financial community comes together.

38. Augmented Reality  AR is an experience where parts of users’ physical world are enhanced with computer-generated input. It can provide an interactive experience of a virtual environment in the real world.  AR can make illusions look real, and users can do things as he or she would do in the real world. AR has the capability of altering the current perception of the real world.

39. What are the opportunities for augmented reality in banking? Here in this segment, we bring to you ways of using augmented realities in banking: Locating ATMs AR phone applications have been made, which helps customers to locate ATMs nearby and bank branches. In India, the Axis bank launched an AR app called “Near me” for this purpose. These apps convey real-time data about location, distance, and services provided at these ATMs. Self-service Today customers prefer banking from the comfort of their homes rather than visiting brick and mortar bank branches. Banking apps are also gaining popularity as they make transactions more easy and straightforward. Now, if we take into consideration the role of  augmented reality  in banking applications, it will help customers with information about their bank accounts, loans, mortgages, etc. This will provide a great user experience to customers. 

40. Payment experience The AR finance apps can encourage payments by recognizing the specifications and price of an item and overlaying the data on customers’ experience with the real world. Accounts payment and management may also get simpler with this. Customer Acquisition Millennials are a generation that has relied on technology and need systems that evolve with them. The technologies are expected to grow because many institutions in different fields have started adopting augmented realities. Customer acquisition will depend on whether banks have the ability to adopt new trends and innovation in banking.

41. Security The introduction of AR into banking can improve security with biometric security, like voice recognition and retinal scans. It will be helping in blocking unauthorized access by hackers. Bank branches Virtual banking is becoming more usual than before, and it has reduced the number of people visiting bank branches. These  virtual banks  combine self-service with competent AR assistants like chatbots etc. that provide essential information to customers. With AR, visualization of account information is possible, which in turn will help banks to offer personalized bank assistance. Data can also be presented in a unique manner, which will help customers to understand various investment strategies. 

42. Minimal Documentation Imagine filing those bulk of physical documents one after the other. This can be brought down as AR develops. Bank statements, advice, letters, and even cheques can be presented virtually. It will save a lot of time. It will also simplify the process of obtaining loans, which involves a lot of paperwork. 

43. Challenges with the implementation of Augmented Reality in banking There are certain challenges facing banks in the implementation of augmented realities. Some of these challenges are discussed below: Technical challenges When it comes to banks that are looking to implement a functional augmented reality solution, they may require a lot of components. It may pose a challenge to banks, and unless these technical debilitations are tackled, AR cannot be properly visualized.    Lack of regulations As of now, there are no such regulations that help businesses and consumers understand what kind of AR applications may be used and how data can be processed. Therefore the data may be used with malicious intent. Lack of public awareness Although AR is a hot topic of discussion for tech geeks, consumers or the public are unaware of the technology. Lack of awareness among the public may lead to privacy and security concerns while using AR technology.

44. Blockchain   It is digital information that is stored in a public database. It usually consists of cryptocurrencies and provides added security for a variety of financial transactions - actually becoming one of the most widely used technologies in  fintech . With blockchain, banks can store information about transactions such as the date, time, and dollar amount of a recent purchase.

45. How do blockchains work? An overview As mentioned, blockchains work as databases. They're made up of blocks of transactions cryptographically linked to each other.  The blocks store information about the parties that are involved in a transaction as well. For example, blockchain will record a transaction without any identifying information and will use a digital signature instead.  The information stored through blockchain will also store information that distinguishes it from other data. It will store a unique code called a  hash  which enables it to classify each unit of information. For example, if you purchase the same product twice on a website, there will be different codes to classify each transaction. Blockchain can store up to 1 MB of data per block. A single block can store up to a few thousand transactions.

46. B enefits of blockchain   There are several benefits of blockchain for banks. The advantages of blockchain in banking have helped financial institutions find ways to complete more secure transactions and reduce errors. As a result, banks will want to consider using blockchain more often to better meet the needs of its customers. Costs Reduced One of the benefits of blockchain for banks is reduced costs. Banks have recently learned that blockchain can allow them to reduce infrastructure costs by up to $20 billion by the year 2022. Implementing things such as smart contacts within a platform, banks can reduce the interactions with counterparties and intermediaries. They can also lower the cost of maintaining and executing contracts as well. Banks can also reduce the transaction costs between bank-to-bank transactions. 

47. Faster Transactions Another one of the advantages of blockchain in banking is offering faster transactions. Any transaction can be done within a matter of seconds and slightly faster than other traditional methods. Banks are now able to avoid middlemen which can allow them to ensure that customers complete transactions at a quicker pace. This will result in customers and banks able to complete and process more transactions.

48. Improved Security Shared ledgers can help banks better secure transaction information. First, they will be able to quickly complete a transaction and reduce the risk of someone either capturing transaction information or diverting payments. Two security keys exist for each transaction. A public key is available for every user while a private key is shared between the parties of a given transaction. Data of a transaction is also unchangeable once it has been verified. 

49. Digital Currencies Banks can benefit from blockchain with the use of digital currencies. They are now able to accept digital currency to complete a variety of transactions. With cryptocurrency, banks will be able to more easily clear and settle financial trades faster and more securely. Banks will also look to make digital currency  as standard currency in the future. 

50. Accountability With accountability, banks will be able to benefit from blockchain by reducing fraud and misuse of company assets. With digitally generated transactions, banks will no longer have to worry about significant errors being made. They won’t have to worry about important information being fabricated as well. Blockchain makes all transactions easy to check and verify which will, therefore, ensure that banks accurately process transactions more consistently. 

51. Compliance Banks will also benefit from blockchain with better compliance. They can allow auditors and government officials access to the blockchain. With this access, auditors and the government can see business unfold with complete transparency. Banks can also intercept suspicious transaction activity and streamline the auditing process. Financial institutions - and fintech firms in general - are now able to provide digital information that is easy to find and save time with the auditing process. 

52. Reduced Error Handling & Reconciliation Blockchain has also benefited banks by allowing them to more easily reconcile transactions. They can trace transactions more quickly and find errors in a timelier manner. This enables them to find errors before a transaction is completed. As a result, they will have the means to fix errors before they can cause a problem for the institution and their customers.   

53. Artificial intelligence It helps banks manage high-speed data to receive useful insights, and features like digital payments, AI bots, and biometric fraud detection systems lead to high-quality services. Artificial intelligence provides numerous advantages for the banking industry. In India's banking sector, artificial intelligence is transforming corporate operations and customer-facing services. It's also utilized to comply with regulations, prevent fraud, and assess individual creditworthiness. Artificial intelligence (AI) has the potential to improve company operations, provide tailored services, and aid with wider aims like financial inclusion. Without a question, the recent push toward digitalization is having a dramatic impact on traditional banking structures.

54. Application of Artificial Intelligence in the Banking Sector The banking sector relies on the crucial role played by AI, harnessing advanced technologies like  machine learning , natural language processing, and predictive analytics. These cutting-edge technologies empower AI systems to learn from data, identify patterns, and generate informed predictions. Within the banking industry, AI solutions find application in numerous critical domains, including

55. CustomerService Virtual assistants and chatbots powered by AI are gaining popularity in the banking industry because they provide prompt and efficient client service. These systems are excellent at answering common questions, making tailored recommendations, and helping users with difficult tasks like loan applications.

56. Fraud Detection AI algorithms are used to identify and stop fraudulent behaviors like credit card fraud, identity theft, and money laundering. These algorithms precisely identify suspicious transactions and activities by evaluating enormous volumes of data from numerous sources. Risk Management AI systems use market trends and client data to identify potential dangers and recommend risk-reduction measures. They enable banks to take preventive action by monitoring credit portfolios, evaluating creditworthiness, and forecasting the possibility of credit defaults.

57. InvestmentManagement Artificial intelligence (AI) algorithms examine market patterns to find profitable investment possibilities. Additionally, taking into consideration the customers’ risk tolerance and investment goals, these systems offer individualized investment suggestions, supporting clients in making well-informed investment choices.

58. Need for Artificial Intelligence in Banking Enhanced Customer Service: AI-driven chatbots and virtual assistants offer 24/7 customer support. They understand human language and provide tailored guidance, improving overall customer satisfaction. Fraud Detection and Prevention: AI algorithms analyze vast transaction data to spot fraudulent patterns. Real-time monitoring identifies suspicious transactions, reducing financial losses and protecting customer accounts.

59. Risk Assessment and Credit Scoring: AI assesses financial records, credit ratings, and market trends. This enhances lending decisions’ accuracy and speeds up loan approvals. Personalized Financial Planning: AI examines customer data to provide custom financial advice. Customers make informed choices about savings, investments, and retirement plans. Automation of Manual Processes: AI streamlines repetitive tasks like data input and document handling. This reduces errors, improves efficiency, and allows personnel to focus on higher-level work.

60. Improved Security and Compliance: AI monitors data to identify anomalies and security breaches. Banks enhance data protection, prevent cyber threats, and meet regulatory requirements. Advanced Data Analytics: AI extracts insights from customer behavior, market trends, and risk patterns. Banks make data-driven decisions, create precise marketing campaigns, and discover new business opportunities. Seamless Digital Banking Experience: AI enables effortless banking through digital channels, enhancing user experience. From mobile apps to voice-enabled services, AI provides convenience and personalized banking.

61. What are API Banking Services? API or Application Programming Interface enables a 3rd party application to use a particular interface through which it can access a common set of tools or services. In banking, this means a bank can offer 3rd party access to its custom services through dedicated APIs. Multiple 3rd parties can then use banking services or also offer the same to its customers. Some of the top banks in India now also allow developer organisations to use their API platform and build custom APIs. From building an API from scratch, testing it, to going live, banks offer all the tools and features to the developers to build powerful and efficient APIs.

62. API Banking in India Now that you know what Application Programming Interface is and how bank APIs work, let us have a look at the state of API banking in India. It was in Aug 2016 that the Competition and Markets Authority (CMA) in the UK asked several top banks such as Barclays, Santander, Lloyds, and more, to provide access to their core banking data to licensed 3 rd parties. In the same year, the RBI Governor launched the Unified Payments Interface (UPI) in India. Developed by the National Payments Corporation of India (NPCI), the payment system has played an integral role in the rise of banking APIs in the country. A few banks then started launching API services which considerably disrupted the traditional retail banking scene in the country. Fast forward to 2019, and there are now many banks that offer such services, and several start-ups are now solely focused on banking APIs to further boost Open Banking.

63. What are the different types of bank APIs? A few top banks in India now offer a host of banking API banking services spread across categories such as Accounts and Deposits, Payment Gateways, Loans and Cards, Trade Service and Business Banking. There are innumerable ways in which these APIs can be used by 3rd parties. For instance, a FinTech platform that offers retail loans can make use of the API to check the CIBIL score of a customer or verify their PAN details. Similarly, a business can integrate its Enterprise Resource Planning (ERP) with API banking to manage its cash receivables and payables directly through its ERP.

64. Banking APIs: Fast, Secure and Efficient The API services and the access they offer to the core banking data, in a way, helps in eliminating barriers between businesses as all of them have access to the same data. Ultimately, this helps in the overall growth of the financial industry, along with improving the quality of services available. With many different Application Program Interface types being launched by banks,  API banking services  are only expected to get more popular in the future. If you run a business, get in touch with a reputed bank offering such services to know more about how the APIs can benefit you.