Role Of Information Technology In Banking Sector – The banking industry in India is gearing up to face the transformation space with the implementation of advanced technologies such as the implementation of Artificial Intelligence (AI), Machine Learning (ML), BlockChain, and Robotics.

Robotic Process Automation improves user experience by allowing bots to handle repetitive tasks without human intervention

Role Of Information Technology In Banking Sector

Distinctive technology solutions and the ability to adapt quickly give the company a competitive advantage. They are now developing and using new technologies to move aggressively and strategically to disrupt, not be disrupted. Greater emphasis is being placed on leveraging advanced technology to increase productivity and reach.

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Embracing futuristic technology has also gained significant momentum in the banking and finance sector. Simplifying services for customers as well as system improvements in terms of technology implementation are quickly gaining acceptance. The banking industry in India is gearing up to face the transformation space with the implementation of advanced technologies such as the implementation of Artificial Intelligence (AI), Machine Learning (ML), BlockChain, and Robotics.

With the introduction of new technologies, the banking industry has changed a lot over the years. Now, the banking process is much faster and more reliable, thereby improving customer relationships with the bank. For example,  Mastercard Advisors, the data analytics and insights arm of Mastercard, distills experience and knowledge from thousands of real-world engagements with financial institutions to produce valuable strategies in the areas of Consumer, Commercial, Debit, Credit, Marketing, Takeovers, Risk and Fraud.

Mastercard’s anonymized and aggregated transaction insights and world-class analytical capabilities complement our industry-proven problem-solving skills to offer actionable recommendations to drive financial results. The customer base is also increasing thanks to benefits like online banking, m-banking and contactless payments. The industry will have a better understanding of its needs, by aligning the latest technologies such as Big Data both internally within their operations and with customers.

Join our exclusive community of business leaders & creators to get in-depth tech stories and intelligence on India’s tech economy that you won’t find anywhere else. “Banking technology” refers to the use of advanced information and communications technology together with computer science to enable banks to offer better services to their customers safely and reliably, and gain a competitive advantage over other banks.

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The aspects of BANK BUSINESS that are currently the focus of Commercial Banking are: LOANS & OTHERS. Core Banking (CBS) SERVICES MIS & ATM Intranet INCREASE DEPOSIT POS Terminals and Cash Machines Electronic Banking Corporate Network Card Management Document Management Banking Any Branch CRM BUSINESS BANK Risk Management Resource Management

6 Remote Banking Remote banking refers to the provision of banking services without face-to-face contact between bank employees and their customers.

Customer banking kiosks use multi-purpose ATMs installed by banks which can also be used as an interactive link between customers and the bank. Telephone banking Telephones are used as messengers to enable automated person-to-person or voice-activated communications between the bank and the customer.

8 Online banking The Internet is used as a messenger where the computer uses a PC and modem to connect to the bank using the online site or software provided by the bank.

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Spectacular growth in the use of online banking facilities for managing money, not just for accounting reporting – in both retail & corporate sectors. New legally binding digital signatures in many countries are leading to entirely new patterns of consumer activity. Huge growth in wireless banking & payment services using mobile phones.

Payment system payments are made in two ways – paper-based and electronic-based systems. In paper-based there are various types of instruments such as checks, money orders, payment orders and interest/dividend orders. Interbank clearing, G-sec clearing and Forex clearing are electronic-based payment systems.

Merchant reluctance to accept cards as a payment method Consideration of merchant fees. namely installation & transaction costs Consideration of consumer costs. Insufficient customer information.

Technology is an important strategic tool for banks to maintain long-term competitiveness, cost efficiency and profitability. Cost Aspect The use of technology in the banking sector reduces costs per transaction Revenue Aspect Offering new services and attracting more customers, meeting customer demand.

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14 Banking sector Technological resources are used in various ways by banks. Number of customers Number of customers who will be served either through long distance banking or conventional banking. Bank branches Since remote channels will not be a complete replacement, the physical presence of banks is still available. Mergers and strategic alliances Cost efficiency can be achieved by using more efficient technology in merging banks. Strategic alliances have been forced between various banks to increase cooperation and knowledge and share IT Costs.

Strategic Risk Increased competition Excessive investment in technology Long lag time to break even Legal Risk Operational Risk Credit Risk

Changing business needs are paving the way for new technologies and channel migration. The main areas of application of technology can be classified into two as follows: Cutting Transaction Processing Costs

1. Transaction processing Makes routine but necessary work Easier Faster Accurate Cheaper Focused factory concept for processes such as account opening & check clearing

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Economies of scale Control & consistency in processes Reduced borrowing at branches Increased turnaround time Automated check processing

Transactions 1. Payment/cash withdrawal 2. Request for money order/payment order 3. Account opening/closing/transfer 4. Investment consultation 5. Check balance / last few transactions 6. Account report 7. Checkbook request 8. Check status inquiry 9. Demat questions 10. Stop payment 11. Transfer funds 12. Balance/Interest Certificate

Establishment “Established by RBI in 1996 to promote the use of technology in the Banking Sector.” Mission Explore and utilize technology for the common good

IDRBT – Institute for Banking Technology Development and Research Role: Standard/Technical Framework Development, Interoperability and Security. NPCI – National Payments Corporation of INDIA. Role: Build and operate switches for interbank transactions and settlements.

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Role: Build and operate a biometric database for the entire population. Helps in authentication and Identity Management. IBA– Indian Banks Association. Role: Deploy Standards/Frameworks.

Role: Help Develop framework and perform laboratory tests. RBI – Reserve Bank of INDIA. Role: Regulatory Framework to ensure safety and security.

28 Conclusion In summary, it is quite clear that banking technology has emerged as a scientific discipline in its own right. Regarding future directions, the development of research in all areas of Technology and computer science can provide a solid breakthrough in banking technology because every new research idea in these disciplines has the potential to have a major impact on banking technology.

To make this website work, we record user data and share it with processors. To use this website, you must agree to our Privacy Policy, including our cookie policy. Be it through mobile banking or through digital payment modes, digital technology has played a vital role in transforming the Banking and Financial Services Industry (BFSI) in India and across the world. In this article, we will take a look at the next generation technologies that are gradually changing the BFSI sector.

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A market report concluded that the overall value of digital payments is expected to grow at a CAGR of 12.7% during 2016-19 and a report from Mckinsey suggests that adoption of technology in this sector is expected to reduce operational costs by 30-40%. across domains.

Since the last few years, the Indian banking industry has started using technologies such as Artificial Intelligence, Machine Learning and Blockchain with the aim of leveraging existing data, expanding products and services and revolutionizing customer experience.

Regarding India, the government does not hesitate to take initiatives to encourage large-scale technology adoption. With a number of initiatives, the adoption of technology in this sector has received a boost. Although the banking sector is still yet to realize the true potential of technology, it has started implementing technology that can change the face of the BFSI sector.

According to Accenture’s report on banking technology, a large number of bankers from India believe that Artificial Intelligence technology can also work together with human agents. AI-driven chatbots can communicate like humans and can also respond to customer queries quite intelligently. Even banking customers prefer to talk to a chatbot before talking to a customer service agent. Chatbots have caught the attention of companies across a variety of industries and are seen as a means to create differentiation in a crowded landscape.

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AI and Machine Learning have great potential in detecting financial fraud. It can identify fraudulent data patterns in new transactions. AI-based algorithms offer a high level of accuracy in validating credit risk models that determine bank profitability.

AI technology has been around for some time, but blockchain has emerged as an exciting digital technology in recent years and is poised to change the way banking is done. With Blockchain-based banking, banks can process payments more quickly and more importantly accurately. The use of blockchain can reduce transaction costs and lead to the development of new banking products and services that can generate new revenues.

As the volume of customer data increases, banks are very interested in increasing it

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