Description
Information technology refers to the acquisition, processing, storage and dissemination of all types of information using computer technology and telecommunication systems. Technology includes all maters concerned with the furtherance of computer science and technology and with the design, development, installation and implementation of information system and applications.
Role of Information Technology in Indian
Banking Sector
Prof. M.C. Sharma
1
Abhinav Sharma
2
Abstract
Information technology refers to the acquisition, processing, storage an issemination of all types of
information using computer technology an telecommunication systems. !echnology inclues all maters
concerne "ith the furtherance of computer science an technology an "ith the esign, evelopment,
installation an implementation of information system an applications. Information technology
architecture is an integrate frame"or# for acquiring an evolving I! to achieve strategic goals. It has
both logical an technical components. Computer har"are an soft"are, voice, ata, net"or#, satellite,
other telecommunications technologies, multimeia are application evelopment tools. !hese
technologies are use for the input, storage, processing an communication of information.
Information technology inclues ancillary equipment, soft"are, firm"are an similar proceures, services
etc. Moern high throughput technologies are proviing vast amounts of the sequences, e$pressions an
functional ata for genes an protein. %ne of the most ifficult challenges is turning this enormous pool
of information into useful scientific insight an novel therapeutic proucts.
Keywords:
Computer, Information !echnology, !elecommunications.
1
Role of Information Technology in Indian Banking Sector
Introduction
&ith the globali'ation trens "orl over it is ifficult for any nation big or small, evelope or
eveloping, to remain isolate from "hat is happening aroun. (or a country li#e Inia,
"hich is one of the most promising emerging mar#ets, such isolation is nearly impossible.
More particularly in the area of Information technology, "here Inia has efinitely an ege
over its competitors, remaining a"ay or uniformity of the "orl trens is untenable. (inancial
sector in general an ban#ing inustry in particular is the largest spener an beneficiary
from information technology. !his eneavours to relate the international trens in it "ith the
Inian ban#ing inustry.
!he last lot inclues possibly all foreign ban#s an ne"ly establishe Private sector ban#s,
"hich have fully computeri'e all the operations. &ith these variations in the level of
information technology in Inian ban#s, it is useful to ta#e account of the trens in
Information technology internationally as also to see the comparative position "ith Inian
ban#s. !he present article starts "ith the ban#s perception "hen they get into I! up graation.
All the trens in I! sector are then iscusse to see their relevance to the status of Inian
ban#s.
IT Considerations
Since the early nineties, each Inian ban# has one some I! improvement effort. !he first
an foremost compulsion is the fierce competition. &hile eciing on the require
architecture for the I! consieration is given to follo"ing realities.
(!" #eeting Internal Re$uirement: !he requirements of the ban#s are ifferent
iniviually epening upon their nature an volume of business) focus on a particular
segment, sprea of branches an a li#e. Many a time*s ban#s o have the require
information but it is scattere. !he operating units selom #no" the purpose of gathering the
information by their higher authorities.
(%!" &ffecti'e in (ata )andling: As state earlier the ban#s have most of the neee ata but
are istribute. (urther the cost of collection of ata an putting the same to use is
prohibitively high. !he accuracy an timeliness of ata generation becomes the causalities in
the process. +est of the intentions on computeri'ation are "ishe a"ay because there is non,
visible reuction in cost -efforts-time require for the require ata gathering.
(*!" &+tending Customer Ser'ices: Aressing to rising customers e$pectations is
significant particularly in the bac#groun of increase competition. In case ban# A is unable to
provie the require service at a competitive price an in an accurate manner "ith spee.
2
!here is al"ays a ban# I! at its ne$t,oor "aiting to
hire the customer. A"areness of
customers about the availability of services an their pricing as also available options have
brought into sharp focus the issue of customer satisfaction.
(,!" Creati'e Su--ort for .ew /roduct (e'elo-ment: It has become necessary for the
ban#s to vitali'e the process of prouct evelopment. Mar#eting functionaries nees a lot of
information not only from the outsie sources but also from "ithin the ban#s. +an#s are
loo#ing to retail segment as the future mar#et places for sales efforts. .aving full,flege
information of e$isting customer is the #ey for this purpose. !he emergences of ata
requirement an an appropriate architecture to support the same are significant issues to be
hanle in this regar.
(0!" &nd1user (e'elo-ment of the .on1technical Staff: +an#ing being a service inustry, it is
the staffs at counters that eliver the proucts. In Inian scenario, virtual ban#ing is li#ely to
have a fe" more years to establish. !he epenence on counter staff is unavoiable. !he
staffs are large in number an the ma/ority is non,technical. !he customer satisfaction levels at
the counter etermine the ultimate benefit of I! offensive. 0iving ue consieration to this
aspect in choosing architecture in necessary.
Trends in Information Technology
Certain trens have been visuali'e of information technology in ban#ing sector all over the
"orl.
(!" 2utsourcing1 %utsourcing is one of the most tal#e about as also a controversial issue.
!he rivers for getting in to outsourcing are many to inclue gaps in I! e$pectations an the
reality, emystification of computeri'ation in general an I! in particulars, tren to"ars
focusing on core competencies, increase legitimacy of outsourcing an intention of getting
out of "orries an sort of up graation of har"are an soft"are versions. 2ot that the
practice is ne" as earlier it "as refuse to as *buying time* or *service bureau*. &hat is neee
is the clear of outsourcing, besie a efinite plan to be more competitive after outsourcing. It
is necessary to have chec#s an balances to monitor venor performance. Cost aspects merit
consieration, as also a ecision on the part of the process to be outsource shall be
significance. 3$it route an resource on the amount of failure after outsourcing are
the other issue to be loo#e onto. 2ot "ithstaning these ris#s, outsourcing has come to say.
(%!" Integration: %ne of the I! tren is moving from hierarchy to team approach. !he
purpose is to see an alternative to retooling, to react speeily an to evelop capabilities
rather than e$ploiting them. Such integration is necessary so as to aress to prevalent
situations1
4a5 (unctions neeing ata an not getting from others.
3
4b5 Sening ata to
those "ho o not "ant
to require them.
4c5 0lobal ata e$ist but o not travel to require business functions.
Inian ban#s seem to follo" this tren through the sincere reesign as escribe earlier.
Instea of vertically ivie pyrami type organi'ational set,ups, ban#s are no" being to
have separate group li#e finance, international consumer ban#ing, inustrial-commercial
creit etc.
(*!" 3rom Solo to /artnershi-: &ith the evelopment of I!, t"o things are ta#ing place
simultaneously. !he "or# force as a percentage of total staff is going o"n an spening on
I! as percentage of total spening is going up. !he forms of partnership can inclue bining
by superior service, accommoation in service sharing net"or#, equal partnership an
situations, "here survival is threatene. At times, the partnership becomes necessary to get
out of areas "here there is no competitive avantage. 6o" evelopment cost or "ier
geographical coverage is the aspects that create such partnership. Instances are not frequent,
"here /oint ventures have been foun "ith the I! venors.
(,!" (istincti'e &dge: It is al"ays sai that many use but a fe" ma#e use of I!. .istorically,
the emphasis is on using I! for large volumes li#e payrolls, balancing the boo#s, the
consoliation etc. !hat reali'ation on having I! as matter of competitive ege has come about
very lately. It is recogni'e that customer service is not an easy thing to provie, but I! is
use as a mean. It oes give value aitions an erases barriers for competitors to enter.
+an#s unerstan that the cost of cultivating the ne" customer is 7 to 8 times of retaining the
ol one. Customer normally s"itches ban#s ue to poor service. !he appreciation of these
facts has compelle the ban#s "orl over to loo# upon I! as an instrument to create
istinctive ege over competitors. !he private sector ban#s that "ere establishe in 199:*s as a
part of finance sector reforms i ma#e goo of I! to have an ege over the others. !he
foreign ban#s operating in Inia have also been able to mar#et I! superiority as a istinctive
ege. !he public sector ban#s are still to ma#e use of I! in this regar, although they are
blesse "ith huge information base all across the country. &hile steps are moote in this
irection by leaing public sector ban#s, more offensive postures are necessary.
47.5 IT as /rofit Centre: In the embryonic phases, I! "as loo#e upon a means to get ri of
high processing cost an time an to convert the manual operation "ith high volume-lo"
comple$ity in t"o mechanical ones. &ith the evolutionary the process, it "as seen as the best
means of generating, MIS. !he same approach gave the status of ;SS to I!. All along, I! has
been recogni'e as the service function in Inian +an#s. .o"ever, the ne" tren that is
emerging is consiering I! as a profit centre. !he cost benefit analysis of having I! or
other"ise in one part. +ut having I! set up to generate income for the organi'ation is the ne"
beginning. 0etting /obs from outsie the ban# for processing ata an the li#e are the current
trens. !he outsourcing one by others is the business, cater to by these organi'ations the
tren of this #in is not eserve in Inian situation particularly ban#s. !he +an#s have been
4
able to /ust manage "hat is to consier as their
responsibility as I!, "ithin the iniviual
ban#s.
(4!" /ros-ering in (own #arket: !he tren suggests that "hen there is a o"n turn in the
mar#et place, Pro,active corporations ta#e the benefit of available unutili'e resources to
upgrae an revisit technology issues. !his is seen as the right time to establish the < = ;
centre for I!. !here are false notions about technology an its capability. Some
misconceptions inclue1
? +est,fit possible technology is implemente.
? System solution is goo enough an there is nee to loo# into user e$pectations.
? Innovations are generally successful.
? Success is relate only to novel ieas.
? !echnology is the sole eterminant of business success, an
? Measures an stanars i.e. auit an inspection issues stan in the "ay of innovation.
!he time available to ebate on similar issues is ample an these false notions get clarifie
uring the o"n mar#et. 3ventually, the ecision ma#ers reach a consensus that I! is not a
panacea but it is an enabler that too "hen "ell supporte by +
Information technology refers to the acquisition, processing, storage and dissemination of all types of information using computer technology and telecommunication systems. Technology includes all maters concerned with the furtherance of computer science and technology and with the design, development, installation and implementation of information system and applications.
Role of Information Technology in Indian
Banking Sector
Prof. M.C. Sharma
1
Abhinav Sharma
2
Abstract
Information technology refers to the acquisition, processing, storage an issemination of all types of
information using computer technology an telecommunication systems. !echnology inclues all maters
concerne "ith the furtherance of computer science an technology an "ith the esign, evelopment,
installation an implementation of information system an applications. Information technology
architecture is an integrate frame"or# for acquiring an evolving I! to achieve strategic goals. It has
both logical an technical components. Computer har"are an soft"are, voice, ata, net"or#, satellite,
other telecommunications technologies, multimeia are application evelopment tools. !hese
technologies are use for the input, storage, processing an communication of information.
Information technology inclues ancillary equipment, soft"are, firm"are an similar proceures, services
etc. Moern high throughput technologies are proviing vast amounts of the sequences, e$pressions an
functional ata for genes an protein. %ne of the most ifficult challenges is turning this enormous pool
of information into useful scientific insight an novel therapeutic proucts.
Keywords:
Computer, Information !echnology, !elecommunications.
1
Role of Information Technology in Indian Banking Sector
Introduction
&ith the globali'ation trens "orl over it is ifficult for any nation big or small, evelope or
eveloping, to remain isolate from "hat is happening aroun. (or a country li#e Inia,
"hich is one of the most promising emerging mar#ets, such isolation is nearly impossible.
More particularly in the area of Information technology, "here Inia has efinitely an ege
over its competitors, remaining a"ay or uniformity of the "orl trens is untenable. (inancial
sector in general an ban#ing inustry in particular is the largest spener an beneficiary
from information technology. !his eneavours to relate the international trens in it "ith the
Inian ban#ing inustry.
!he last lot inclues possibly all foreign ban#s an ne"ly establishe Private sector ban#s,
"hich have fully computeri'e all the operations. &ith these variations in the level of
information technology in Inian ban#s, it is useful to ta#e account of the trens in
Information technology internationally as also to see the comparative position "ith Inian
ban#s. !he present article starts "ith the ban#s perception "hen they get into I! up graation.
All the trens in I! sector are then iscusse to see their relevance to the status of Inian
ban#s.
IT Considerations
Since the early nineties, each Inian ban# has one some I! improvement effort. !he first
an foremost compulsion is the fierce competition. &hile eciing on the require
architecture for the I! consieration is given to follo"ing realities.
(!" #eeting Internal Re$uirement: !he requirements of the ban#s are ifferent
iniviually epening upon their nature an volume of business) focus on a particular
segment, sprea of branches an a li#e. Many a time*s ban#s o have the require
information but it is scattere. !he operating units selom #no" the purpose of gathering the
information by their higher authorities.
(%!" &ffecti'e in (ata )andling: As state earlier the ban#s have most of the neee ata but
are istribute. (urther the cost of collection of ata an putting the same to use is
prohibitively high. !he accuracy an timeliness of ata generation becomes the causalities in
the process. +est of the intentions on computeri'ation are "ishe a"ay because there is non,
visible reuction in cost -efforts-time require for the require ata gathering.
(*!" &+tending Customer Ser'ices: Aressing to rising customers e$pectations is
significant particularly in the bac#groun of increase competition. In case ban# A is unable to
provie the require service at a competitive price an in an accurate manner "ith spee.
2
!here is al"ays a ban# I! at its ne$t,oor "aiting to
hire the customer. A"areness of
customers about the availability of services an their pricing as also available options have
brought into sharp focus the issue of customer satisfaction.
(,!" Creati'e Su--ort for .ew /roduct (e'elo-ment: It has become necessary for the
ban#s to vitali'e the process of prouct evelopment. Mar#eting functionaries nees a lot of
information not only from the outsie sources but also from "ithin the ban#s. +an#s are
loo#ing to retail segment as the future mar#et places for sales efforts. .aving full,flege
information of e$isting customer is the #ey for this purpose. !he emergences of ata
requirement an an appropriate architecture to support the same are significant issues to be
hanle in this regar.
(0!" &nd1user (e'elo-ment of the .on1technical Staff: +an#ing being a service inustry, it is
the staffs at counters that eliver the proucts. In Inian scenario, virtual ban#ing is li#ely to
have a fe" more years to establish. !he epenence on counter staff is unavoiable. !he
staffs are large in number an the ma/ority is non,technical. !he customer satisfaction levels at
the counter etermine the ultimate benefit of I! offensive. 0iving ue consieration to this
aspect in choosing architecture in necessary.
Trends in Information Technology
Certain trens have been visuali'e of information technology in ban#ing sector all over the
"orl.
(!" 2utsourcing1 %utsourcing is one of the most tal#e about as also a controversial issue.
!he rivers for getting in to outsourcing are many to inclue gaps in I! e$pectations an the
reality, emystification of computeri'ation in general an I! in particulars, tren to"ars
focusing on core competencies, increase legitimacy of outsourcing an intention of getting
out of "orries an sort of up graation of har"are an soft"are versions. 2ot that the
practice is ne" as earlier it "as refuse to as *buying time* or *service bureau*. &hat is neee
is the clear of outsourcing, besie a efinite plan to be more competitive after outsourcing. It
is necessary to have chec#s an balances to monitor venor performance. Cost aspects merit
consieration, as also a ecision on the part of the process to be outsource shall be
significance. 3$it route an resource on the amount of failure after outsourcing are
the other issue to be loo#e onto. 2ot "ithstaning these ris#s, outsourcing has come to say.
(%!" Integration: %ne of the I! tren is moving from hierarchy to team approach. !he
purpose is to see an alternative to retooling, to react speeily an to evelop capabilities
rather than e$ploiting them. Such integration is necessary so as to aress to prevalent
situations1
4a5 (unctions neeing ata an not getting from others.
3
4b5 Sening ata to
those "ho o not "ant
to require them.
4c5 0lobal ata e$ist but o not travel to require business functions.
Inian ban#s seem to follo" this tren through the sincere reesign as escribe earlier.
Instea of vertically ivie pyrami type organi'ational set,ups, ban#s are no" being to
have separate group li#e finance, international consumer ban#ing, inustrial-commercial
creit etc.
(*!" 3rom Solo to /artnershi-: &ith the evelopment of I!, t"o things are ta#ing place
simultaneously. !he "or# force as a percentage of total staff is going o"n an spening on
I! as percentage of total spening is going up. !he forms of partnership can inclue bining
by superior service, accommoation in service sharing net"or#, equal partnership an
situations, "here survival is threatene. At times, the partnership becomes necessary to get
out of areas "here there is no competitive avantage. 6o" evelopment cost or "ier
geographical coverage is the aspects that create such partnership. Instances are not frequent,
"here /oint ventures have been foun "ith the I! venors.
(,!" (istincti'e &dge: It is al"ays sai that many use but a fe" ma#e use of I!. .istorically,
the emphasis is on using I! for large volumes li#e payrolls, balancing the boo#s, the
consoliation etc. !hat reali'ation on having I! as matter of competitive ege has come about
very lately. It is recogni'e that customer service is not an easy thing to provie, but I! is
use as a mean. It oes give value aitions an erases barriers for competitors to enter.
+an#s unerstan that the cost of cultivating the ne" customer is 7 to 8 times of retaining the
ol one. Customer normally s"itches ban#s ue to poor service. !he appreciation of these
facts has compelle the ban#s "orl over to loo# upon I! as an instrument to create
istinctive ege over competitors. !he private sector ban#s that "ere establishe in 199:*s as a
part of finance sector reforms i ma#e goo of I! to have an ege over the others. !he
foreign ban#s operating in Inia have also been able to mar#et I! superiority as a istinctive
ege. !he public sector ban#s are still to ma#e use of I! in this regar, although they are
blesse "ith huge information base all across the country. &hile steps are moote in this
irection by leaing public sector ban#s, more offensive postures are necessary.
47.5 IT as /rofit Centre: In the embryonic phases, I! "as loo#e upon a means to get ri of
high processing cost an time an to convert the manual operation "ith high volume-lo"
comple$ity in t"o mechanical ones. &ith the evolutionary the process, it "as seen as the best
means of generating, MIS. !he same approach gave the status of ;SS to I!. All along, I! has
been recogni'e as the service function in Inian +an#s. .o"ever, the ne" tren that is
emerging is consiering I! as a profit centre. !he cost benefit analysis of having I! or
other"ise in one part. +ut having I! set up to generate income for the organi'ation is the ne"
beginning. 0etting /obs from outsie the ban# for processing ata an the li#e are the current
trens. !he outsourcing one by others is the business, cater to by these organi'ations the
tren of this #in is not eserve in Inian situation particularly ban#s. !he +an#s have been
4
able to /ust manage "hat is to consier as their
responsibility as I!, "ithin the iniviual
ban#s.
(4!" /ros-ering in (own #arket: !he tren suggests that "hen there is a o"n turn in the
mar#et place, Pro,active corporations ta#e the benefit of available unutili'e resources to
upgrae an revisit technology issues. !his is seen as the right time to establish the < = ;
centre for I!. !here are false notions about technology an its capability. Some
misconceptions inclue1
? +est,fit possible technology is implemente.
? System solution is goo enough an there is nee to loo# into user e$pectations.
? Innovations are generally successful.
? Success is relate only to novel ieas.
? !echnology is the sole eterminant of business success, an
? Measures an stanars i.e. auit an inspection issues stan in the "ay of innovation.
!he time available to ebate on similar issues is ample an these false notions get clarifie
uring the o"n mar#et. 3ventually, the ecision ma#ers reach a consensus that I! is not a
panacea but it is an enabler that too "hen "ell supporte by +