Description
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank is the connection between customers that have capital deficits and customers with capital surpluses.
What is banking technology?
o “Banking technology” refers to the use of sophisticated information and communication technologies together with computer science to enable banks to offer better services to its customers in a secure and reliable manner, and get competitive advantage over other banks.
1
Focus aspects of Commercial Banking now are:
BANK’S BUSINESS
LOANS & MISC. SERVICES
RAISING DEPOSITS
Core Banking (CBS) Electronic Banking Any Branch Banking CRM
MIS & Intranet
ATMs
POS Terminals and Cash dispenser
Corporate Network
Card Management
Document Management
Risk Management
Resource Management
BANK’S BUSINESS
2
Core Banking System
3
ATM Electronic Banking Branch Bankin g 3 Branch
Head Office Branch 4
Branch 2
Branch 1
Branch n Branch 6
Branch 5
4
IT Developments affect Bank
o Reduction of costs
o Bank services o Branding o Customer Demographics
5
Remote Banking
Remote banking refers to the provision of extending banking services without face to face contact between the bank employees and its customers.
6
Types of Remote Banking Services
o Kiosk banking
The customer uses multipurpose ATMs installed by the bank which may also be used as an interactive link between the customer and the bank. o Telephone banking Telephone is used as a message carrier to enable person to person or voice activated automated communication between the bank and the customers.
7
o Online banking
Internet is used as a message carrier where the computer uses a PC and a modem to connect to the bank using its online website or a software provided by the bank.
8
Future Trend in Remote Banking
o Spectacular growth in the use of online banking facilities to manage money rather than just for accounting reportingin both retail & corporate sector.
o New digital signatures legally binding in many countries leading to entirely new patterns of consumer activity. o Huge growth in wireless banking & payment services using mobile phones.
9
Electronic Payment channels
o Payment systems
payment is made by two ways - paper based and electronic bases system In the paper based there are various types of instruments like cheques, drafts, payment orders and interest/dividend warrants. Inter bank clearing, G-sec clearing and Forex clearing are the system of electronic bases payment.
10
Diffusion of Electronic Money
Types of e-money
1. 2. Card based money Network based money
11
Reason for adopting the e-money slowly
1. Reluctance of merchants to accept the card as the mode of payment
2. Cost consideration of the merchant. i.e., the installation & transaction costs 3. Cost consideration of the consumer. 4. Insufficient customer information.
12
Technology and Bank’s strategies
Technology is an important strategic tool for banks to safeguard long-term competitiveness , cost efficiency and profitability.
o Cost Aspects The use of technology in banking sector reduce per transaction cost o Revenue Aspects Offering new services and attracting more number of customers , reach customers demand.
13
o Banking sector
The technology resources are used in a number of ways by the banks.
o Number of customers
Number of customers to be serviced through both remote banking and conventional banking. o Bank branches Because of the remote channel would not become complete substitutes, physical presence of the bank is still available. o Mergers and strategic alliances Cost efficiency can be achieved by the use of more efficient technologies in merged banks. Strategic alliances have been forced between various banks to increase co-operation and knowhow and share IT Costs. 14
Effect of Technology on Risks in Banking
? Strategic Risks
• • • Increased competition Excessive investment in technology Long time lag for break even
? Legal Risks
? Operational Risks
? Credit Risks
15
Delivery Channels & Channel Migration
Changing business needs paved the way for new technology & channel migration. The key areas of application of technology can be classified into two as mentioned as follow:
1. Transaction Processing 2. Cost Cutting
16
Delivery Channels & Channel Migration (contd.)
1. Transaction processing
• Makes the routine but necessary work
? Easier
?
? ?
Faster
Accurate Cheaper
• Focused factory concept for processes like account opening & cheque clearing
17
Delivery Channels & Channel Migration (contd.)
•
• •
Economies of scale
Control & consistency in processes Reduced loan on branches
•
•
Improved turnaround times
Automated check processing
18
Delivery Channels & Channel Migration (contd.)
2. Cost Cutting
• • Normal transaction re-routing Automating integral administrative task
•
Centralized operation
19
Types of Channels
1. Internet banking services
2. Automatic teller machine 3. Mobile banking 4. Call center
20
Functions of Channels
• Sales
1. Pre sales - Accounting opening 2. Post sales - Cross sales
- Relationship deepening
21
• Transaction
1. Cash payment / withdrawal
2. Request for demand draft / Pay order 3. Account opening / closure / transfer 4. Investment consultancy 5. Balance Enquiry / Last few transactions
6. Statement of account 7. Cheque book request 8. Cheque status enquiry 9. Demat queries 10. Stop payment 11. Fund transfer 12. Balance/Interest certificates
22
Institute for Development and Research in Banking Technology (IDRBT)
23
About IDRBT,
? Establishment
“Established by RBI in 1996 for promoting use of technology in Banking Sector.”
? Mission
Explore and Exploit technology for common good
24
Agencies involved in IT Development In Banking sector
IDRBT – Institute for Development and Research in Banking Technology
Role: Technical Standards / Frameworks Development, Interoperability and security.
NPCI – National Payment Corporations of INDIA.
Role: Build and operate switch for Inter-Bank transactions and settlement.
25
CONT….
UIDAI—Unique Identification Authority of INDIA.
Role: Build and operate bio metric database for the entire population. Helps in authentication and Identity Management.
IBA– Indian Banks Association.
Role: Propagate Standards / Frameworks.
26
CONT….
I.I.T. – Indian Institute of Technologies
--Chennai and Kanpur Role: Help Develop frameworks and conduct lab tests.
R.B.I – Reserve Bank of INDIA.
Role: Regulatory Framework to ensure safety and security.
27
Conclusion
In summary, it is quite clear that banking technology has emerged as a separate discipline in its own right. As regards future directions, the proliferating research in all fields of Technology and computer science can make steady inroads into banking technology because any new research idea in these disciplines can potentially have a great impact on banking technology.
28
doc_481572227.pptx
A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank is the connection between customers that have capital deficits and customers with capital surpluses.
What is banking technology?
o “Banking technology” refers to the use of sophisticated information and communication technologies together with computer science to enable banks to offer better services to its customers in a secure and reliable manner, and get competitive advantage over other banks.
1
Focus aspects of Commercial Banking now are:
BANK’S BUSINESS
LOANS & MISC. SERVICES
RAISING DEPOSITS
Core Banking (CBS) Electronic Banking Any Branch Banking CRM
MIS & Intranet
ATMs
POS Terminals and Cash dispenser
Corporate Network
Card Management
Document Management
Risk Management
Resource Management
BANK’S BUSINESS
2
Core Banking System
3
ATM Electronic Banking Branch Bankin g 3 Branch
Head Office Branch 4
Branch 2
Branch 1
Branch n Branch 6
Branch 5
4
IT Developments affect Bank
o Reduction of costs
o Bank services o Branding o Customer Demographics
5
Remote Banking
Remote banking refers to the provision of extending banking services without face to face contact between the bank employees and its customers.
6
Types of Remote Banking Services
o Kiosk banking
The customer uses multipurpose ATMs installed by the bank which may also be used as an interactive link between the customer and the bank. o Telephone banking Telephone is used as a message carrier to enable person to person or voice activated automated communication between the bank and the customers.
7
o Online banking
Internet is used as a message carrier where the computer uses a PC and a modem to connect to the bank using its online website or a software provided by the bank.
8
Future Trend in Remote Banking
o Spectacular growth in the use of online banking facilities to manage money rather than just for accounting reportingin both retail & corporate sector.
o New digital signatures legally binding in many countries leading to entirely new patterns of consumer activity. o Huge growth in wireless banking & payment services using mobile phones.
9
Electronic Payment channels
o Payment systems
payment is made by two ways - paper based and electronic bases system In the paper based there are various types of instruments like cheques, drafts, payment orders and interest/dividend warrants. Inter bank clearing, G-sec clearing and Forex clearing are the system of electronic bases payment.
10
Diffusion of Electronic Money
Types of e-money
1. 2. Card based money Network based money
11
Reason for adopting the e-money slowly
1. Reluctance of merchants to accept the card as the mode of payment
2. Cost consideration of the merchant. i.e., the installation & transaction costs 3. Cost consideration of the consumer. 4. Insufficient customer information.
12
Technology and Bank’s strategies
Technology is an important strategic tool for banks to safeguard long-term competitiveness , cost efficiency and profitability.
o Cost Aspects The use of technology in banking sector reduce per transaction cost o Revenue Aspects Offering new services and attracting more number of customers , reach customers demand.
13
o Banking sector
The technology resources are used in a number of ways by the banks.
o Number of customers
Number of customers to be serviced through both remote banking and conventional banking. o Bank branches Because of the remote channel would not become complete substitutes, physical presence of the bank is still available. o Mergers and strategic alliances Cost efficiency can be achieved by the use of more efficient technologies in merged banks. Strategic alliances have been forced between various banks to increase co-operation and knowhow and share IT Costs. 14
Effect of Technology on Risks in Banking
? Strategic Risks
• • • Increased competition Excessive investment in technology Long time lag for break even
? Legal Risks
? Operational Risks
? Credit Risks
15
Delivery Channels & Channel Migration
Changing business needs paved the way for new technology & channel migration. The key areas of application of technology can be classified into two as mentioned as follow:
1. Transaction Processing 2. Cost Cutting
16
Delivery Channels & Channel Migration (contd.)
1. Transaction processing
• Makes the routine but necessary work
? Easier
?
? ?
Faster
Accurate Cheaper
• Focused factory concept for processes like account opening & cheque clearing
17
Delivery Channels & Channel Migration (contd.)
•
• •
Economies of scale
Control & consistency in processes Reduced loan on branches
•
•
Improved turnaround times
Automated check processing
18
Delivery Channels & Channel Migration (contd.)
2. Cost Cutting
• • Normal transaction re-routing Automating integral administrative task
•
Centralized operation
19
Types of Channels
1. Internet banking services
2. Automatic teller machine 3. Mobile banking 4. Call center
20
Functions of Channels
• Sales
1. Pre sales - Accounting opening 2. Post sales - Cross sales
- Relationship deepening
21
• Transaction
1. Cash payment / withdrawal
2. Request for demand draft / Pay order 3. Account opening / closure / transfer 4. Investment consultancy 5. Balance Enquiry / Last few transactions
6. Statement of account 7. Cheque book request 8. Cheque status enquiry 9. Demat queries 10. Stop payment 11. Fund transfer 12. Balance/Interest certificates
22
Institute for Development and Research in Banking Technology (IDRBT)
23
About IDRBT,
? Establishment
“Established by RBI in 1996 for promoting use of technology in Banking Sector.”
? Mission
Explore and Exploit technology for common good
24
Agencies involved in IT Development In Banking sector
IDRBT – Institute for Development and Research in Banking Technology
Role: Technical Standards / Frameworks Development, Interoperability and security.
NPCI – National Payment Corporations of INDIA.
Role: Build and operate switch for Inter-Bank transactions and settlement.
25
CONT….
UIDAI—Unique Identification Authority of INDIA.
Role: Build and operate bio metric database for the entire population. Helps in authentication and Identity Management.
IBA– Indian Banks Association.
Role: Propagate Standards / Frameworks.
26
CONT….
I.I.T. – Indian Institute of Technologies
--Chennai and Kanpur Role: Help Develop frameworks and conduct lab tests.
R.B.I – Reserve Bank of INDIA.
Role: Regulatory Framework to ensure safety and security.
27
Conclusion
In summary, it is quite clear that banking technology has emerged as a separate discipline in its own right. As regards future directions, the proliferating research in all fields of Technology and computer science can make steady inroads into banking technology because any new research idea in these disciplines can potentially have a great impact on banking technology.
28
doc_481572227.pptx