This document discusses banking innovations through technology. It examines technological developments in the banking sector and how innovation factors impact banking sector performance. Some key points: - Banking sectors have adopted technologies like internet banking, mobile banking, ATMs, etc. which have positively impacted customers and provided benefits like increased convenience. - Technologies allow customized services at reduced costs but some products may not meet real customer demands. - Innovations are driven by factors like connectivity, customer relationships, and business growth which help achieve global competitiveness. - Emerging technologies impacting banking include mobile banking, AI, blockchain, cloud computing and biometric authentication.

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A STUDY ON BANKING INNOVATIONS THROUGH
TECHNOLOGY
TOMY THOMAS
Full time Research Scholar
Department of Commerce,
Vels Institute of Science Technology and Advanced Studies.
Pallavaram, Chennai – 600 117.
Dr. K. MAJINI JES BELLA
Assistant Professor & Research Supervisor
Department of Commerce,
Vels Institute of Science Technology and Advanced Studies.
Pallavaram, Chennai – 600 117.
Abstract
The aim of this paper is to identify the importance of
innovative technologies using in the banking sector and analyze
the features of product orientation related to the technology. The
banking sector is a rapidly changing industry. The aim of
digitalization of banks is providing broad benefits to their
customers. Technology based innovations will be the important
determinant in offering customized and diversified banking
services to their varied customers, at a reduced cost. This study
will be indicated that some of the banking products are based on
the advanced solutions that may surpass the real market demands.
This study examine the technological development in the banking
sector, also it analyse the impact of innovation factors on the
performance of banking sector. Banking sector is one of the
fastest growing sector in India. There is a number of changes in
the Indian banking sector. The innovation factors such as internet

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banking, mobile banking, ATM (automated teller machine),
NEFT, and RTGS. The internet banking facilities of the banking
sector has positive impact with the public.
Key Words: Banking, Innovations, Technology, Development,
Mobile Banking, Internet Banking, ATMs, Profitability,
efficiency and security.
Introduction
Technology is the application of new solutions that will
meet the new and existing requirement. This will accomplish
through new effective products, services, processes, technologies,
ideas that are readily available to markets, society and
governments. Currently, the technological innovation is
considered as one of the most important tools that can affect the
banking sector and the economic sector. The technological
development will destroy the models used in delivering and
developing services in banks and it will replace with new and
original ones. Therefore, banks should develop and adopt the new
technological innovation to perform in this highly competitive
environment. For the past few years, the banking sector in India
has a lot of changes. Information technology is helpful to the
banking and financial industries for new innovations in the
product designing and their delivery. Paramasivan C &
Ravichandiran G (2022), Technology is one of the major parts of
banking sector which decide the quality and effectiveness of
banking services. Inclusive banking services to un banked people
will be possible only with the help of innovative business
practices. With this view, this study will provide an output to
understand the impact of innovative business practices of banking
with respect to socio-economic development. The latest
technologies offers a chance for the banks to build a new systems
that address a wide range of customer needs. The financial
innovations are associated with the technological change and it is

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totally changed the banking philosophy and further it tuned by the
competition in the banking industry. Most of the banks started to
take an innovative approach towards their services with the
objective of creating more value for their customers. Now, we
have the electronic payment system as well as currency notes.
The competition is compelling everyone to move forward and
faster. The banking sector plays an important role in the
development of the country’s economy. Banking innovation,
driven by technological advancements, has brought several
benefits to both banks and their customers. Here are some of the
benefits of banking innovation
Benefits Of Banking Innovation
a. Increased Convenience:
The use of technology has made banking more convenient
for customers. They can access their accounts, transfer money,
and pay bills from their smartphones, tablets, or computers.
b. Improved Efficiency:
Automation and digitization have improved the efficiency
of banking operations, reducing the time required to process
transactions and improving the accuracy of data processing.
c. Cost Reduction:
Technology has enabled banks to reduce their operational
costs, such as branch operations, staff costs, and paper-based
processes, leading to cost savings for both banks and their
customers.
d. Enhanced Security:
The use of biometric authentication and encryption
technologies has improved the security of banking transactions,
reducing the risk of fraud and unauthorized access.
e. Increased Competition:

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Fintech startups have disrupted the traditional banking
model, creating new competition in the industry. This has led to
increased innovation and better services for customers.
f. Personalization:
Technology has enabled banks to personalize their
services to meet the specific needs of their customers, leading to a
better customer experience and increased customer loyalty.
The banking innovation has brought several benefits to
banks and their customers, including increased convenience,
improved efficiency, cost reduction, enhanced security, increased
competition, and personalized services. The banking industry is a
sector that provides financial services to individuals, businesses,
and governments. These services typically include accepting
deposits, lending money, providing credit cards and other
payment services, and managing investments. The banking
industry is a critical component of the global economy and plays
a significant role in facilitating trade and commerce.
The banking industry can be divided into different types
of banks based on their operations, ownership, and activities.
These include commercial banks, investment banks, retail banks,
private banks, and central banks. Commercial banks are the most
common type of bank and offer a range of services to customers,
including checking and savings accounts, loans, and credit cards.
Investment banks, on the other hand, primarily focus on
underwriting and selling securities and providing advice on
mergers and acquisitions.
The banking industry has undergone significant changes
in recent years, driven by technological advancements and
changing customer preferences. The rise of digital banking and
the growth of fintech startups have disrupted traditional banking
models, forcing banks to adapt to new technologies and customer
expectations. Additionally, banking regulations have increased in

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response to the 2008 financial crisis, resulting in stricter
requirements for capital reserves and risk management. Despite
these challenges, the banking industry remains a critical part of
the global economy and is likely to continue evolving to meet
changing customer needs and regulatory requirements.
In recent years, the banking industry has seen a significant
shift towards adopting new technologies to improve their services
and offerings. Here are some examples of how technology has
driven banking innovation.
Technologies In Banking Sector
g. Mobile Banking:
The rise of mobile banking has enabled customers to
access their accounts, transfer money, and pay bills from their
smartphones. This has made banking more convenient and
accessible for customers and reduced the need for physical branch
visits.
h. Artificial Intelligence (AI):
AI technology has enabled banks to improve their
customer service by providing personalized recommendations,
detecting fraud, and automating customer interactions through
chatbots.
i. Blockchain Technology:
Blockchain technology has the potential to transform the
way banks operate by providing secure and transparent
transactions that can be processed faster and more efficiently. It
also eliminates the need for intermediaries in transactions,
reducing costs for banks
j. Cloud Computing:
Cloud computing has allowed banks to store and process
vast amounts of data securely and efficiently, leading to faster and
more accurate decision-making.
k. Biometric Authentication:

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Biometric authentication, such as facial recognition and
fingerprint scanning, has improved security in banking and
reduced the risk of fraud.
l. Open Banking:
Open banking allows third-party providers to access
customer data with their consent. This has created opportunities
for banks to collaborate with fintech companies and develop
innovative services and products.
The technology has enabled banks to improve their
services and offerings, making banking more accessible,
convenient, and secure for customers.
Factors Of Innovation
Chart: 1
Research model
Review Of Literature
Ferreira, (2003), Ramos et al., (2011) examined that the
new technologies are most important for every banking industry
for their development. The new technologies have both
advantages and disadvantages. So the banking sectors give proper
Integration of
value chain
Business growth Global
competitiveness
Connectivity
Customer
relationship
Innovation

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training to their employees for updating with new innovative
technology. The important in clarifying that the new electronic
distribution channels are carry both advantages and
disadvantages.
Serna, (2005) ascertained that an analysis devoted to the
main effects of latest technological innovation on banking sector
at the bank branch level looks to be of great relevance. The bank
branches are the primary place in which the consumers have
access to the products for either building assets or obtaining the
credit.
Beltratti and Stulz (2011), stated that the technological
innovation, banking sector and the financial sectors are essential
in achieving the competitive advantage. The technological
innovation not only allows for the lower costs, but it also opens
up a set of new opportunities that will allow the businesses to
perform better in separated ways.
Pinto and Ferreira (2010) found that there is a general
consensus that the technological innovation and financial services
that are essential in achieving the competitive advantage. It is
clear that technological innovation motivate the customers to
engage with the particular branch and it opens up a set of new
opportunities that allows the businesses to perform better in
different ways.
Paramasivan C & Ravichandiran G (2022), Technology
is one of the major parts of banking sector which decide the quality and
effectiveness of banking services. Inclusive banking services to un
banked people will be possible only with the help of innovative business
practices. With this view, this study will provide an output to understand
the impact of innovative business practices of banking with respect to
socio-economic development.
Statement Of the Problem
This research is used to study the various innovations that
are encountered the impact of innovation in banking sector. This

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study will provide necessary method that could be used in solving
the technology related problems. Due to the Competition the
problems will increase. This study will analyze the various
advantages, disadvantages and the problems of banking sector
while they adopt the new technology.
Objectives
1. To study the technological innovation available in banking
sector.
2. To highlight the new financial innovations in the banking
sector.
3. To examine the challenges faced by the banks in the
changing scenario.
Hypothesis
There is an association between innovation and global
competitiveness.
There is an association between innovation and business
growth.
Research Methodology
This research is done to make an estimation of the
advantages, disadvantages, challenges faced by the banking sector
and their current position. This article is based on primary and
secondary data.
This study was especially concentrated on electronic
distribution channels and the retail banking in Indian banking
sector. Recently, the financial institutions have undergone the
important changes, most of them are directly related to the
technological innovation. In India, the banking sector is one of the
major investors in the technological innovation. Further than the
interest is associated with gaining of competitive advantage, this
investment is linked with the technological evolution of the
society itself, it will motivates an intense demand for the products
and services. The distribution channels also evolved.

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Analysis And Results
One sample statistics
The application of the T. Test on the five variables of
innovation is computed and presented in the table below.
Table: 1
One-Sample Statistics
N Mean Std.
Deviation
Std. Error
Mean
Customer relationship 107 3.11 1.276 .123
Connectivity 107 3.05 1.520 .147
Global
competitiveness
107 3.29 1.374 .133
Business growth 107 4.15 .888 .086
Integration of value
chain
107 3.85 1.097 .106
It was found from the above table mean values of the
above five variables ranges from 3.05 to 4.15, standard deviation
range from .888 to 1.520 and standard error mean is estimated
within the limit 0.086 to 0.147. The below one sample test table
shows the‘t’ test value.
Table: 2 Innovation - One sample test
One-Sample Test
Test Value = 0
t df Sig.
(2-
tailed)
Mean
Difference
95%
Confidence
Interval of the
Difference
Lower Upper
customer
relationship
25.224 106 .000 3.112 2.87 3.36
Connectivity 20.740 106 .000 3.047 2.76 3.34

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Global
competitiveness
24.772 106 .000 3.290 3.03 3.55
Business
growth
48.331 106 .000 4.150 3.98 4.32
Integration of
value chain
36.301 106 .000 3.850 3.64 4.06
The range of T values 20.740 to 48.331. The T values are
statically significant and presented with two-tailed significance.
From the above table, it can be ascertained that the customers
strongly agreed that innovations are most important to achieve the
organizational goal.
Findings
This study found that in this current scenario the people go
with the innovation and latest technologies to get their work done
much faster and smarter. Today, the technological innovation has
been completely changed the way of banking sector. The result of
innovation is search for profits and organizational growth. The
growth of technologies and the internet has made electronic
payments of the bills is cost-effective method over the paper
checks or money.
Suggestions
1. The banking industry need to encourage digital self-
service.
2. The banking sector need to focus on to create the
specialized offerings also focus on build trust and brand
loyalty towards their customers.
3. Make the customers to practice the value-based decision
making when define the digital journey.
4. Need to introduce the different types of payments system
to increase the transactions mainly for the strong growth
in transfers.

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Conclusion
In this modern scenario, people go with the innovation and
latest technologies to get their work done much faster and
smarter. The innovations are sustainable and manageable will be
able to generate more revenue and increase the industry value
while significantly decreasing the cost and resource requirements
thereby enrich the environment. The banking sectors need to
address the issues of the customers in access and use the financial
services. The satisfied customers can continue with the same
branch. The banks to integrate their products and services with
the third-party applications to provide variety of products or
services to their customers through the banking ecosystem. The
innovative solutions, are enabling them to provide the one-stop
shop for their customers and the banks strengthen their security
systems and Cloud Services.
References
1. Berger A. (2003) e Economic Effects of Technological
Progress: Evidence from the Banking Industry. Journal of
Money, Credit, and Banking, Volume: 35(2), PP: 141–
176. https://doi.org/10.1353/mcb.2003.0009.
2. Bueno E., Longo M., Salmador M., and Morcillo P.
(2017) La Innovación del Modelo de Negocio Bancario:
El Reto de la Banca Digital. AECA: Revista de la
Asociación Española de Contabilidad y Administración de
Empresas, Volume: 120(3–6), PP: 1–28.
3. Kowalski, T. and Shachmurove, Y. (2011). The financial
crisis: What is there to learn? Global Finance Journal,
Volume: 22 (3), PP: 238-247.
4. Paramasivan C & Ravichandiran G (2022), A Study on
Technology Driven Innovation Practices in Banking
Sector in Tiruchirappalli District, International Journal of

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Early Childhood Special Education . 2022, Vol. 14 Issue
5, p3949-3959. 11p
5. Paramasivan C & Ravichandiran G (2022), A Study on
Technology Driven Innovation Practices in Banking
Sector in Tiruchirappalli District, International Journal of
Early Childhood Special Education . 2022, Vol. 14 Issue
5, p3949-3959. 11p
6. Pinto, S. and Ferreira, F. (2010), Technological
dissemination in the Portuguese payments system: An
empirical analysis to the region of Santarém, International
Journal of Human Capital and Information Technology
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Banking services in Portugal: A preliminary analysis to
the perception and expectations of front office employees,
International Journal of Management and Enterprise
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8. Serna, R. (2005), Where are the bank branches in my
community? An analysis of branch distribution in low-
income neighborhoods, California Reinvestment Coalition
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