Commercial Banking: Technology in Indian Banking

Commercial Banking
Technology in Indian Banking
ATMs
Electronic Banking Branch Banking
Branch 3 Branch 2 Branch 1 Head Office Branch 4
Branch n Branch 6
Branch 5
Glossary in E-Banking
ALPM Advanced Ledger Posting Machine Micro processor based electronic device used for maintenance of primary ledgers, working out products and interests at periodical intervals, preparation of account statements and listing of standing instructions to be executed in the accounts.
Glossary-2
BANKNET A communication software to provide message and file transfer between branches of banks and across banks CRM Customer Relationship Manage-ment is an information technology industry term for methodologies, strategies, software, and other web-based capabilities that help an enterprise organise and manage customer relationships.
Glossary-3
DBMS Database Management System A set of computer programs that controls the creation, maintenance, and utilisation of the databases of an organisation E-Commerce is conducting business communications and transactions viz computers over networks. It is the buying and selling of goods and services through digital communication
Glossary-4
SWADHAN Indias first Shared Payment Network Service (SPNS) offering countrywide access to banking operations at more than 1,000 ATMs in and around 64 cities. It has 55 member banks in the network which includes public, private and foreign banks. Touch Screen recognises human touch. Users can point to the select something on the screen
E-BANKING DEVELOPMENTS
ALPMs and Back Office Computerisation NEED TO IMPROVE CUSTOMER SERVICE RECONCILIATION / UNION PROBLEMS COMPETITION AND REFORMS INTRODUCTION OF COMPUTERISATION CLEARING HOUSES, ATMs, ELECTRONIC FUND TRANSFERS, BANKNET, SWIFT, ELECTRONIC MAIL, CREDIT CARDS, ONLINE BANKING, TELE-BANKING, ETC
WHY TECHNOLOGY IN BANKS ?

TO TRANSFORM FINANCIAL SERVICES INDUSTRY IN THE NET-WORKED WORLD BANKS TO BE CUSTOMER CENTRIC PROVIDE SERVICES / PRODUCTS ACROSS A RANGE OF CHANNELS TO BE FUTURISTIC AND HAVE TIME VALUE IN ALL ITS DEALINGS WITH CUSTOMERS
Many Benefits of Technology

Increased operational efficiency, profitability & productivity Superior Customer Service Multi-channel, real-time transaction processing Better Cross-Selling ability Improved management / accountability Efficient NPA and Risk Management Minimal transaction costs Improved financial analyses capabilities
Benefits to Customer
More convenience & flexi timings
Better awareness of products & services Up-to-date information on accounts Low cost of accessing the accounts
BANKS IT STRATEGY
INVESTMENT IN HARDWARE ACQUIRING / DEVELOPING SOFTWARE TRAINING OF STAFF AT DIFFERENT LEVELS NETWORKING OF OFFICES R-S-U-M? SECURITY FOR TRANSACTIONS & INFO GLOBAL REACH ONLINE BANKING, OUTSOURCING
Internet Banking
Issues of Confidentiality ? Hacking and Fraud prone ?? Scope for failure of Technology ??? Resultant denial of Services ????
INST. FOR DEV & RESEARCH IN BANKING TECHNOLOGY

TO PROVIDE TECH & OPERATING SUPPORT TO Bks / Financial Institutions SET UP BY RBI AT HYDERABAD - 1996 FUNDED BY RESERVE BANK OF INDIA AN AUTONOMOUS CENTRE FOR DEV AND RESEARCH IN BANKING TECHNOLOGY THINK-TANK FOR PROMOTION OF TECH RESEARCH & CONSULTANCY www.idrbt.ac.in
Automated Teller Machines

ATMs or 24 hour Tellers Electronic Terminals allow to bank at any time... On-site (near branch) and Off-site ATM ATMs facilitate withdrawal/deposit.... Customer provided with a PIN / Card Introduced in India by Foreign Banks SWADHAN / SPNS wef Feb 1, 1997 Introduced in Mumbai by IBA initiative www.iba.org.in
BANKNET
Set up in 1991 by RBI Meant to facilitate transfer of inter-bank/ interbranch messages within India by Public Sector banks who are members of this network Wide connectivity - Major Centres like Mumbai, Delhi, Calcutta, Madras, Nagpur, Bangalore, Hyderabad, Pune, Ahmedabad, Kanpur, Lucknow, Chandigarh, Kochi, Jaipur, Bhopal, Patna, Bhubaneshwar, Thiruvanantha-puram, Guwahati, Panaji, Jammu, etc
INFINET
Indian Financial Network Set up by RBI in June 1999 Satellite based WAN using VSAT (Very Small Aperture Terminal) technology The hub and Network Management System of INFINET are located in the Institute for Development and Research in Banking Technology, Hyd Major applications: E-mail, Electronic Clearing Service - Credit and Debit, Electronic Funds Transfer
SERVICES
Bill Payment through Electronic Banking Electronic Shopping Mall Effecting Personal Investments through Electronic Banking Trading in shares Investing in Mutual Funds Trade In Derivatives IPOs Online
Cheque Truncation System

IN USE IN MANY COUNTRIES ... NI Act was amended appropriately Settlement based on e-images/MICR RBI Wg Gr submitted report in 2003 Images to be preserved for 8 years Pilot project in New Delhi in 2006 Reduces delays in collections... Fraught with risks, legal issues...
Customer Relationship Management (CRM)

Not a product / service, but a strategy Increasing competition among banks Customer expectations and demands Product development / Service Quality Know Your Customer (KYC) guidelines Knowledge Management in Banks Call Centres, DSAs, Franchisees in Banks Core Banking Solutions & CRM Packages for Best Customer Service
Customer Relationship Management

Customer Analytics Statistical Credit Score Card Demographic details Transaction details Historical loan default data Targeted Marketing Campaign Carpet bombing avoided Hit rate increases
Smart Cards The Future
Multi-application Smart Card Channel of the future Pilot project started Pilot Project funded by Govt. of India Project is in progress in partnership with IDRBT, IIT Mumbai and Banks Visit www.scafi.in The Smart Card Forum of India is a non-profit, multi-industry organization promoting the wide spread acceptance of multiple application smart card technology.
References:
www.rbi.org.in; www.idrbt.ac.in; www.google.co.in; www.swift.com; www.iba.org.in; www.antiphishing.com;

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Commercial Banking

Technology in Indian Banking

WHY TECHNOLOGY IN BANKS ?

Many Benefits of Technology

INST. FOR DEV & RESEARCH IN BANKING TECHNOLOGY

Automated Teller Machines

Cheque Truncation System

Customer Relationship Management (CRM)

Customer Relationship Management

Smart Cards The Future

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