Impact of ICT in Banking Sector, Bangladesh

1. Impactof ICT
in
BankingSector
of
Bangladesh

2. Introduction
The rapid advancement in information and communication technology
has significantly affected the banking industry & improved their
services as financial intermediary through adopting various Information
Technologies. Technology has become a tool that facilitates banks'
organizational structures, business strategies, customer services and
related functions.

3. Different BankingServices

4. CoreBanking
Core banking is a general term used to describe the services provided by
a group of networked bank branches. Bank customers may access their
funds and other simple transactions from any of the member branch
offices.

5. MOBILEBANKING
Mobile banking involves the access to, and provision of, banking
and financial services through mobile devices.

6. InternetBanking
The Internet Banking provides a secure medium for transferring funds
electronically between bank accounts and also for making banking
transaction over the Internet.

7. Smsbanking
Short Message Service (SMS) is the formal name for text
messaging. SMS banking allows customers to make simple
transactions to their bank accounts by sending and receiving text
messages.

8. eft
Electronic Funds Transfer (EFT) is a system of transferring
money from one bank account to another without any direct paper
money transaction.

9. Any branchbanking
Any branch banking is the service where an account is accessible
from any branch of a particular bank. In Bangladesh the term is
widely popularized as online banking.

10. Automatedteller
machine
ATM means computerized machine that permits bank customers
to gain access to their accounts and permit them to conduct some
limited scale banking transactions with a magnetically encoded
plastic card and a code number.

11. pos
Point of Sale (POS) service is an innovative
electronic money transferring system that
allows the customers of banks to pay for
their purchases through their ATM and
credit card at any POS enabled retailer.

12. Debitcard
Debit cards are linked directly to the bank account of its holder.
The holder of debit card can use it to buy goods or withdraw cash
and the amount is taken from the bank account right away.

13. CreditCard
A credit card is a form of borrowing. Credit cards allow its holder
to 'buy goods now and pay later' - called 'buying on credit'. They
aren't linked to the bank account of the customers.

14. Kioskbanking
KIOSK Banking offers customers the flexibility to conduct their
banking transactions via the KIOSK machine. The customer must
have a Debit Card and a PIN. When one inserts the debit Card into
the Kiosk, he/she will be prompted to enter the PIN. He/she can
then begin using KIOSK Banking.

15. swift
The Society for Worldwide Interbank Financial
Telecommunication ("SWIFT") operates a worldwide financial
messaging network which exchanges messages between banks
and other financial institutions.

16. micr
MICR (Magnetic Ink Character Recognition) is a character
recognition technology adopted mainly by the banking industry to
facilitate the processing of cheque.

17. Openonlineletterof credit
It means that for opening letter of credit the customers need not to
go to the bank physically. They can open the letter of credit with
the help of online banking.

18. Technology Driven Banking in Bangladesh:
Present Status, Future Prospects and Challenges
Farhana Zaman ,Priyabrata Chowdhury

26. Efficiency(productivity)
• Traditional Banking: 170 crore times transactions
5,000 transactions per employee
41 crore tk (1999)
• After ICT: 200 crore times transactions
10,000 transactions per employee
160 crore tk (2015)

27. Efficiency(investment)
• Traditional Sectors: 58 tk return against 1 tk investment
• ICT Sectors: 136 tk return against 1 tk investment
• ICT People: 25 tk return against 1 tk investment

28. challenges
• Inefficient and inadequate knowledge of the bank management about the
technology driven banking.
• Lack of proper strategic plan to gain and retain market share of the indigenous
banks.
• Lack of international standard communication channel.
• High cost of establishing technology driven banking system.
• Inadequate back and front office management.
• Lack of integrated plan among the banks and the Central Bank authority.

29. Conclusion
Now-a-days technology driven banking services are not 'nice to have'
but an 'impossible to survive without' for all banks. A well functioned
tech based banking system is dependent on the availability of a
backbone network connecting the whole country; ICT infrastructure &
penetration in the banking sector; skilled operational personnel; and
legal and regulatory framework. Both individual and joint efforts are
needed to overcome the constraints in promoting the technology driven
banking in the country.