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Role of technology in banking
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Communication & connectivity
initiates from Total Branch Automation (TBA)packages.
convergence of communication technologies,
like internet, mobile/cell phones in banking.Centralisization of
banks .
Implementation of Centralized Funds
Management System.In first phase centralised funds enquiry
system (CFES)
In second phase centralised funds transfer system (CFTS)
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Special Electronic Funds Transfer
NEFT would provide for movement of electronic transfer
of funds in a safe, secure and quick manner across
branches of any bank to any other bank through a central
gateway of each bank, with the inter-bank settlement
being effected in the books of account of banksmaintained at
RBI.
Real Time Gross Settlement System (RTGS)
MICR (magnetic ink character recognition ) &
Imaging technology for cheque clearing
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E-BANKING
Offers the following services to its customers:
Credit Cards/Debit Cards
ATM
E-Cheques
EFT (Electronic Funds Transfer) DeMAT Accounts
Mobile Banking
Telephone Banking Internet Banking
EDI (Electronic Data Interchange)
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COST REDUCTION
Technology in banking leads to cost reduction
in processing as well as in human resources.
Less manual intervention
Revenue increase
Less investment to bring new products to market
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Prior to ATMs, funds withdrawals, accounts
enquiries and funds transfers required face toface interactions
between bank staff and
customers, a process which was slow and
subject to costly human errors and large costsof labour.
cell phone banking, no costs of travelling to the
bank and the convenience of cell phonebanking (customers can do
their transaction
anywhere and anytime)
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RISK MANAGEMENT
Technology is an important tool for the riskmanager, delivering
the benefits of control andtraceability of events and data, as well
as
efficiency gains. use of technology are playing an important
role in
reducing risk, as well as increasing efficiency andcost
effectiveness.
For technology risk - A comprehensive IT securitystrategy is a
vital component of an effective riskmanagement process
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cryptographic technologies play an important
role in ensuring confidentiality, authenticity
and integrity. Customers are required toprovide their User ID
and PIN combination and
a one-time password (OTP), dynamic access
code or digital signature so that their identityand authenticity
could be verified before
access to their accounts is permitted.
Credit risk - After 90 days of non payment ofloan amount it
automatically transfers in Non-
Performing loans. Helps banks to recognise it at
early stage.
